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10 markets where house prices could fall by 20%

10 markets where house prices could fall by 20%

Lou Oates / Shutterstock.com If you are a homeowner, that quiet rumble you hear may be the house that sits a bit. Or it may be the first hint of an

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Home selling price reduced
Lou Oates / Shutterstock.com

If you are a homeowner, that quiet rumble you hear may be the house that sits a bit. Or it may be the first hint of an earthquake that will cause your home’s value to tumble to the ground.

Recently, Moody’s Analytics updated its own analysis of US regional housing markets and shared the findings exclusively with Fortune.

The picture is not pretty. After years of skyrocketing house prices, Moody’s now finds that home values ​​nationwide are overvalued by 24.7%.

Mark Zandi, chief economist at Moody’s Analytics, tells Fortune that several of the most overheated markets can easily see price declines of 5% to 10%.

However, the situation worsens as the nation falls into a recession. In that case, home values ​​nationwide could drop by about 5%, and the most overvalued markets could drop by as much as 15% to 20%.

The following are the markets most at risk for a major downturn in difficult economic times, according to Moody’s.

10. Jacksonville, Florida

Few states have seen house prices rise more than Florida over the past few years. It is among three states to have two markets on this list.

While housing values ​​in Jacksonville may be particularly overheated, most of the country has seen prices rise above what would normally be expected. According to Fortune’s summary of Moody’s findings:

Among the 413 regional housing markets measured by Moody’s Analytics, the firm believes 96% are ‘overvalued’. Simply put: Almost the entire country has house prices that are higher than the underlying fundamentals would historically support. ”

9. Sherman-Denison, Texas

House prices in this area – located about an hour north of Dallas – could rise due to the rising cost of construction.

Local real estate agent Tommi Homuth told KTEN television station:

“… (N) new construction costs more. I spoke to an architect today, and he said it was $ 205 per foot to $ 215. He said he did not price houses until he finished because of the cost of goods. “

8. Fort Collins, Colorado

The first of two Colorado cities on this list, Fort Collins recently ranked no. 8 placed under the “10 smaller housing markets that are now red-hot.”

7. Atlanta-Sandy Springs-Alpharetta, Georgia

Atlanta always attracts people looking for economic opportunities, but the city’s attractiveness can also push up prices. The city is among “15 housing markets overvalued by more than 50%.”

6. Tampa-St. Petersburg-Clearwater, Florida

Not only have housing values ​​exploded in this Gulf Coast city, but rents are also soaring, as we noted in “15 U.S. cities where rents have risen the most.” Northern residents moving south have pushed up housing costs in recent years.

5. Coeur D’Alene, Idaho

As we reported, in 2021, Idaho attracted more new residents than any other state. All those new faces need homes, which pushes prices up higher.

4. Phoenix-Mesa-Chandler, Arizona

Phoenix is ​​no. 3 on the list of “The 10 Most Popular American Cities to Move to.” And, as in Idaho, as the number of new residents increases, so does the cost of housing.

3. Las Vegas-Henderson-Paradise, Nevada

Las Vegas has been a fast-growing city for many years, and it helps support housing values. But the city has seen prices explode during the housing bubble more than a decade ago, and it is possible that history may repeat itself.

2. Colorado Springs, Colorado

Colorado Springs was recently one of the “15 cities where homebuyers are most likely to face bidding wars.”

In fact, things have gotten so out of hand that buyers here are insisting on escalation clauses, which say how many thousands of dollars they are willing to exceed the highest bid.

1. Boise, Idaho

Boise is the poster kid for red-hot house prices. According to at least one estimate, prices here are overvalued by an astonishing 70%.

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