Back at the start of 2023, Redfin economists put out a forecast that got a lot of attention: home values would drop nationwide by roughly 4%, and a small percentage of pandemic-era buyers would end up owing more on their homes than those homes were worth. Redfin also predicted that a full-blown foreclosure crisis, the kind we saw during the Great Recession, was highly unlikely. I covered this prediction in detail when it came out, and I told my audience I agreed with it. Looking back now, it’s worth revisiting how that forecast actually held up, especially here in Montgomery County, Maryland, where I’ve spent my career helping people buy and sell homes.

What did Redfin actually predict for 2023?

Redfin’s core call was a nationwide home value decline of about 4% in 2023, with a worst-case scenario of an 8% drop. Using county sale records from January 2021 through September 2022, Redfin’s economists modeled what would happen to pandemic-era buyers under each scenario. At a 4% decline, only about 3 in 100 pandemic buyers would end up underwater on their mortgage. Even at the more severe 8% decline, that number only rose to 6.3%. And if the market simply stayed flat, fewer than 2% of pandemic buyers would be underwater. This was a measured, data-driven forecast, not a doom-and-gloom headline, and that’s exactly why I found it credible at the time.

Why did Redfin say a foreclosure crisis was unlikely?

Redfin’s reasoning came down to equity, not just price movement. Buyers who purchased during the pandemic boom locked in historically low fixed interest rates and, in most cases, had strong enough credit to clear tight lending standards. Many also made large down payments and rode the wave of rapidly appreciating home values. That combination meant most owners had a real equity cushion, even if prices softened. Redfin’s logic was simple: a homeowner with equity who runs into financial trouble can sell the house instead of losing it to foreclosure. That’s a fundamentally different situation than 2008, when many buyers had little to no equity and loose lending standards left them with no exit ramp.

Which markets were flagged as higher risk?

Redfin’s data pointed to popular pandemic relocation destinations and expensive West Coast metros as the areas most exposed to underwater risk. Sacramento topped the list, with just over 9% of homeowners projected to be underwater at a 4% price decline. Cities like San Francisco, San Jose, Oakland, and Seattle weren’t far behind, with underwater rates projected between 6.3% and 7.4%. On the other end of the spectrum, Florida metros like Miami, Fort Lauderdale, and West Palm Beach were flagged as nearly immune, with less than half a percent of homeowners expected to fall underwater. The takeaway then, and one that’s held true since, is that real estate risk is never a single nationwide number. It’s a patchwork of local markets each behaving differently.

How did this prediction apply to Montgomery County?

I told my viewers back in 2023 that while I’d never call Montgomery County or the greater DMV “recession-proof,” this area was better insulated than most of the country, and that’s exactly how it played out. The reasons haven’t changed: a dense concentration of large employers in tech, biotech, healthcare, hospitality, and the federal government keeps steady demand flowing into the region. Pair that with consistently strong school districts and you get a market that holds value even when national headlines turn negative. Inventory was also historically low heading into 2023, and it stayed low, because homeowners sitting on 3% mortgage rates had zero incentive to trade up into 6% or 7% rates. I noted a real shift at the time from “want to sellers,” people moving on a whim, to “have to sellers,” people moving because of a job relocation, a death, or a divorce. Even among that second group, most carried enough equity that foreclosure or short sale was never a realistic outcome. If you want to see how local inventory and pricing trends have actually moved since then, my <a href="market stats">Montgomery County market stats</a> page tracks it in real time.

Was the softening market actually good news for buyers?

Yes, and this is the part that’s easy to overlook when everyone is focused on doom headlines. A slower market with rising rates gave buyers something they hadn’t had in years: time. Time to actually think through an offer, negotiate on price or terms, and avoid the frantic, no-contingency bidding wars that defined 2021 and early 2022. I called this “buying a home the right way,” and it’s a theme that’s remained true well beyond 2023. A cooler market isn’t just risk for sellers, it’s opportunity for buyers who are patient enough to use it.

Looking back, how accurate was the call?

Redfin’s prediction turned out to be a solid, level-headed read on where the market was heading. There was no foreclosure wave, no repeat of 2008, and Montgomery County held up exactly as I expected given our employment base and school districts. That’s the value of going back to data-driven forecasts instead of reacting to whatever headline is scariest that week. If you want to dig into the original data yourself, Redfin still publishes their housing research and forecasts at <a href="source link target="_blank" rel="noopener">redfin.com/news</a>.

FAQ

Did home values actually decline 4% nationwide in 2023?

National price movement varied quite a bit by market and by month, but the broad “soft landing” outcome Redfin projected, rather than a sharp crash, is largely what unfolded, especially in stable metros like ours.

Did Montgomery County see a foreclosure wave?

No. Consistent with Redfin’s underwater analysis and my own read of local equity positions, Montgomery County did not see anything close to a foreclosure crisis.

Is now still a good time to buy given how this prediction played out?

Every buying decision depends on your personal timeline, financing, and goals. That’s exactly the kind of conversation I have with clients every week, feel free to <a href="contact Kevin">reach out</a> and we can talk through your specific situation.

Why does Montgomery County hold value better than other markets?

A strong mix of federal government, tech, biotech, and healthcare employers combined with top-tier school districts keeps steady buyer demand flowing into the area even during national slowdowns.

Where can I see current Montgomery County market data?

Check my <a href="market stats">local market stats page</a> for up-to-date numbers on inventory, pricing, and trends across Montgomery County.

If you found this breakdown helpful, I’d love to hear whether you agree or disagree with how this all played out. And if you’ve got questions about where the market stands today or what it means for your specific situation, don’t wait,<a href="Kevin's calendar target="_blank" rel="noopener">book a free 30-minute call with me right here</a>.

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Sources and next steps

Verified local sources:Maryland REALTORS housing statistics;GCAAR housing market reports;FRED 30-year mortgage rate series;Maryland SDAT real property search.

Related Kevin guides:market stats;relocation guide;book a call.

Watch the YouTube videoorbook a 30-minute strategy call with Kevin.

Expanded local research sources:GCAAR housing market reports;Maryland REALTORS housing statistics;Realtor.com Montgomery County market data;FRED 30-year mortgage rates;Maryland SDAT real property search;Zillow Montgomery County home values;Montgomery Planning development;Montgomery Planning development review;MCATLAS zoning map;Montgomery Planning data catalog;Montgomery County permits;Visit Montgomery travel guide;Visit Montgomery restaurant directory;Tripadvisor Montgomery County things to do.

Contextual links for this video

Kevin site links:home selling guide;home buying guide;market stats;DMV Housing Market 2026: Is a Crash Coming or Are the Numbers Telling a Different Story?;Zillow Just Banned Private Listings — Here’s What Home Buyers and Sellers Actually Need to Know.

Outside research links for this video:GCAAR housing market reports;Maryland REALTORS housing stats;Realtor.com Montgomery County market data;Reddit discussion search for this topic;Google context search for this video.

Kevin process link: why Kevin’s local process matters.