National Economic Outlook
By Ingo Winzer
The big question in 2023 is how far and how fast home prices will fall. We won’t know first quarter home prices until late May, but I’m certain that prices will be lower in many markets. The surge in 2021 was so sudden and swift that the deflation of prices will similarly be rapid and steep. In high-flying markets like Salt Lake City, Spokane, Boise and Bend, I expect prices to fall ten percent in the next 12 months. Markets in Florida and Texas will hold up better, but even there deflation will be delayed, not avoided. We’re looking at a multi-year readjustment process.
The total number of jobs in March was up 2.7 percent from last year, continuing a steady slide towards slower growth. This slide means that a lot of “new” jobs are still covid-recovery jobs, not actually new ones at all; consider that the largest number of “new” jobs in the past year were at restaurants – normally a low-growth sector (and a low-paying one).
Most worrying is that jobs in business services were up just 2.3 percent, lower and lower in recent months. Growth in business services is usually well above total job growth – so the current basic growth of jobs may actually be well below 2 percent.
Jobs were up 2.5 percent in construction, 2.1 percent in manufacture, 1.1 percent in finance, 3.8 percent in healthcare, 5.8 percent at restaurants, 2.2 percent in government, and flat in retail.
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