Housing Market Forecast Archives

Goldman Sachs Housing Market Forecast: Will it Crash?

April 24, 2023 by Marco Santarelli

The housing market in the United States has been a rollercoaster ride in recent years, with unpredictable shifts that have left homeowners and buyers alike uncertain about what to expect. The latest forecast from Goldman Sachs is no exception, predicting a significant decline in home prices in some of the biggest cities in the country.

According to a recent note to clients, Goldman Sachs analysts predict that by the end of 2024, home prices will plunge by 19% in Austin, 16% in Phoenix, 15% in San Francisco, and 12% in Seattle. The reason for this sharp decline in home prices is due to an oversupply of housing in these metropolitan areas, which has overwhelmed demand.

“While overall levels of housing inventory remain tighter than pre-pandemic levels, some vulnerable metropolitan areas have seen supply increase rapidly. Unsurprisingly, our home price appreciation forecasts have been most negative for geographies where supply is starting to overwhelm demand,” wrote Lotfi Karoui, Vinay Viswanathan, and Ronnie Walker, the authors of the note.

The report has sparked concern among homeowners in these areas, who are understandably worried about what the future holds for their investments. However, the analysts at Goldman Sachs emphasize that the anticipated decline in housing prices in these metropolitan areas is not reflective of a broader trend in the housing market.

In particular, the analysts note that San Francisco and Austin are home to major tech firms, including Amazon, Apple, Google, and Facebook, that has been at the forefront of industry-wide layoffs. The oversupply of housing in these areas is primarily due to local challenges, including poor levels of affordability, pandemic-related distortions, and a high concentration of employment in the technology industry.

The report from Goldman Sachs is not the first to predict a decline in the housing market. In an earlier note, the bank suggested that home prices nationwide could fall around 6% from their peak before bottoming out sometime in the next six months as a result of higher mortgage rates.

“The sharpest declines for the U.S. housing market are now behind us,” the strategists, led by Goldman chief economist Jan Hatzius, said in the January note.

The housing market has been sensitive to changes in interest rates, and the Federal Reserve's aggressive campaign to tighten policy and slow the economy has had a significant impact. Policymakers have already lifted the benchmark federal funds rate eight consecutive times and have signaled their intention to continue raising rates higher this year as they try to crush inflation that is still running abnormally high.

Mortgage rates have fallen from their peak of 7.08% in November but have recently reversed that trend and started to march higher amid interest rate-hike fears. The average rate for a 30-year fixed mortgage climbed to 6.65% this week, according to data from mortgage lender Freddie Mac.

That remains significantly higher than just one year ago when rates hovered around 3.76%. This rise in mortgage rates has contributed to the decline in the housing market, as it makes buying a home less affordable for many Americans.

Despite the concerns raised by the report from Goldman Sachs, other economists have predicted even steeper declines in the housing market. Ian Shepherdson, the chief economist at Pantheon Macroeconomics, warned that home prices could tumble as much as 20% from their peak.

It's clear that the housing market is in a state of flux, with many different factors contributing to the uncertainty. However, there are also some positive signs on the horizon that may help to stabilize the market in the coming years.

For example, the Biden administration has proposed a $15,000 tax credit for first-time homebuyers, which could make it easier for many Americans to afford a home. This proposal is part of a broader plan to tackle the affordable housing crisis in the United States, which has become a major issue in recent years.

In addition to the proposed tax credit, the administration has also unveiled plans to invest $318 billion in affordable housing over the next ten years. This investment will help to create new affordable housing units, rehabilitate existing units, and provide rental assistance to families in need.

These initiatives could help to boost demand for housing in some of the metropolitan areas that are currently oversupplied. However, it's important to note that the impact of these policies will take time to be felt in the housing market. In the short term, the market is likely to remain volatile, with unpredictable shifts in supply and demand.

Another factor that could impact the housing market in the coming years is the ongoing COVID-19 pandemic. The pandemic has had a major impact on the economy, with millions of Americans losing their jobs and struggling to make ends meet. Many homeowners have been forced to sell their homes or face foreclosure as a result.

However, the rollout of vaccines and the easing of restrictions in many parts of the country could help to boost the economy and stabilize the housing market. If the pandemic is brought under control and the economy begins to recover, we could see an increase in demand for housing in many parts of the country.

Ultimately, the housing market is a complex and constantly evolving ecosystem that is influenced by a wide range of factors. While the latest forecast from Goldman Sachs may be concerning for homeowners in some metropolitan areas, it's important to remember that this is just one prediction among many.

Other economists have predicted different outcomes for the housing market, and it's impossible to know for sure what the future holds. However, by staying informed about the latest trends and developments in the market, homeowners and buyers can make informed decisions about their investments and take steps to protect themselves against potential risks.

In conclusion, the housing market in the United States is currently in a state of flux, with unpredictable shifts in supply and demand. The latest forecast from Goldman Sachs predicts a significant decline in home prices in some of the biggest cities in the country, due to an oversupply of housing that has overwhelmed demand.

However, this is just one prediction among many, and it's important to consider a wide range of factors when assessing the state of the housing market. Initiatives like the proposed tax credit for first-time homebuyers and the investment in affordable housing could help to boost demand in some areas, while the ongoing COVID-19 pandemic could continue to impact the market in unpredictable ways.

By staying informed about the latest trends and developments in the market, homeowners and buyers can make informed decisions about their investments and take steps to protect themselves against potential risks.

More Insight on the Global & US Housing Market Forecast

According to Goldman Sachs Research, higher mortgage rates are causing housing markets around the world to slow down. After a surge in housing activity during the pandemic, home sales have pulled back sharply in the second half of 2022 due to the spike in mortgage rates enacted by central banks in most developed market economies. This contraction in housing starts, sales, and prices has persisted in 2023 and is expected to continue throughout the year.

The report suggests that the impact of higher borrowing costs for homebuyers has yet to be fully felt and that the global housing market may not have reached its bottom. The GS Research team estimates that each 100-basis-point rise in mortgage rates leads to a 6% decline in residential fixed investment after three or four quarters and a 2.5% drop in house prices after 10 quarters.

The timing of the impact varies across countries due to differences in mortgage markets. Countries with higher shares of fixed-rate mortgages tend to experience delayed rate impacts. Since mortgage rates have only recently peaked in most countries and could be headed higher still, the global housing market may not have found its bottom yet.

The report predicts significant peak-to-trough home price declines in developed markets where housing affordability plunged following the pandemic, including New Zealand (-19%), Canada (-19%), Sweden (-17%), and Australia (-15%). Developed markets that will likely see flat or moderate declines include Italy (-2% peak to trough), France (-4%), and Switzerland (-6%), reflecting a slower increase in mortgage rates and “less stretched” affordability.

The US housing market is expected to see “relatively tame” home price declines of around 5%, owing mainly to its extremely low vacancy rate.

Overall, the authors of the report believe that the housing declines around the globe are going “according to plan.” The strong housing market response to rate hikes has helped slow overall growth below trend without causing a recession or triggering a rise in delinquencies in most major economies. They anticipate that this pattern will continue.

Country	Peak-to-Trough Home Price Decline
United States	-5%
New Zealand	-19%
Canada	-19%
Sweden	-17%
Australia	-15%
Switzerland	-6%
France	-4%
Italy	-2%

References/Sources:

https://www.goldmansachs.com/insights/pages/why-the-global-housing-market-has-further-to-slide.html
https://www.foxbusiness.com/economy/home-prices-could-face-double-digit-drop-cities-goldman-sachs-warns
https://news.yahoo.com/these-four-cities-could-see-double-digit-home-price-drops-goldman-sachs-204112309.html

South Florida Housing Market: Price, Trends, Forecast 2023

April 20, 2023 by Marco Santarelli

South Florida continues to see a surge in domestic and international wealth migration, as homebuyers from high-tax, high-density states relocate and purchase prime properties of $1 million and up. The region's real estate market is unique due to the significant number of cash transactions and the high rate of migration.

Pending sales rose 16.9% month-over-month, from 2,288 in January 2023 to 2,674 in February 2023, while showing appointments in the Southeast Florida MLS, which is owned by MIAMI REALTORS®, increased 1.6% month over month to 237,395 showings in February. Miami February 2023 condo sales increased versus February 2019, but are down in comparison to last year.

Miami existing condo sales decreased 46.6% year-over-year, from 1,807 in February 2022 to 965 in February 2023, due to a lack of inventory and rising mortgage rates. In comparison to February 2019, however, in February 2023 sales increased by 3.3%, from 934 to 965. Miami-Dade County single-family home median prices increased 3.5% year-over-year in February 2023, while existing condo median prices increased 2.6% year-over-year.

Miami single-family median prices have risen for 135 consecutive months (11.25 years), the longest-running streak on record. South Florida's real estate market continues to outpace national trends, and the region remains a bargain for prime property compared to other global cities. The Miami-Dade luxury ($1-million-and-up) transactions rose 111.5% in comparison to pre-pandemic, from 122 in February 2019 to 258 in February 2023. About 67.1% of Miami-Dade luxury buyers pay all cash.

Homebuyers from high-tax, high-density states continue to relocate and purchase in South Florida. Florida ranked No. 1 in the U.S. in the largest net gain of adjusted gross income (AGI) due to domestic migration, gaining $23.7 billion, according to the most recent IRS-SOI migration data.

South Florida's housing market trend for 2023 continues to be on the rise, albeit at a more modest rate. However, the region's real estate market is unique due to the significant number of cash transactions and the high rate of migration. As the economic and lending conditions continue to favor regions with strong real estate market fundamentals like South Florida, the region's housing market will continue to see a surge in domestic and international wealth migration, and prices will continue to rise.

How Did the South Florida Market Perform Last Year?

Last year, statewide closed sales of single-family homes in the Florida housing market were 287,352, a decrease of 18% year over year, while existing condo-townhouse sales were 125,494, a decrease of 21.7% year over year. The statewide median sale price for single-family homes in Florida was $402,500, up 15.7% year on year. It was $306,500 for condo-townhouse units, up 21.6% year on year, according to the latest housing data from Florida Realtors®.

The supply of for-sale homes continues to increase gradually, alleviating inventory constraints in many markets across the state. Last year, statewide inventory increased by 116.8% for existing single-family homes and 65.0% for condo-townhouse units. In 2022, the supply of existing single-family homes increased to 2.7 months, while the supply of existing condo-townhouse properties increased to 2.8 months.

Data from the University of Florida's Shimberg Center for Housing Studies show that prices in Miami-Dade County, home to Miami, Miami Beach, and other municipalities popular with new arrivals to the state, have returned to levels not seen since the mid-2000s housing boom, a period of intense real estate speculation in the region that forced millions into foreclosures in the aftermath of the Great Recession.

While recent inflation, supply chain bottlenecks, and revived interest in the South Florida real estate market have added gasoline to the fire, home affordability has long been a problem for South Floridians. Although the steep increase in rents is a recent trend, the fundamental disparity between incomes and housing prices is not.

South Florida Housing Market Forecast for 2023

The South Florida housing market is forecasted to remain strong in 2023, according to the MIAMI Association of Realtors and the Multiple Listing Service. Although total sales decreased by 29.9% year-over-year in February 2023, this is in comparison to a historic February 2022, and the current market has lower inventory in specific price points and higher rates.

Palm Beach County condo new listings have increased by 1.4% year-to-date, and total pending sales have risen by 10.8% month-over-month. Palm Beach single-family and condo markets remain in a seller’s market with just 3.3 and 3.7 months of supply, respectively. Palm Beach County single-family home median prices have increased 2.7% year-over-year while existing condo median prices have increased 9.1% year-over-year.

South Florida ranks in the top 10 in the US in median homebuyer growth, with Miami and West Palm Beach showing a substantial growth in median homebuyer income. The supply and demand for housing determine home prices. Lower supply and higher demand create higher prices, and inventory for Palm Beach single-family homes and condos is low.

South Florida is one of only two US markets forecasted to see price appreciation in 2023, according to the Goldman Sachs forecast. Wealth migration, cash buyers, and global companies continue to relocate to South Florida, which is expected to contribute to the strong housing market.

If mortgage rates continue to rise this year, affordability will deteriorate. While we believe the South Florida market will remain strong in 2023 and do not anticipate a meltdown, waiting until there is even more inventory and loan rates are much higher would merely prolong the sales process. And we believe that by the end of the year, the days on market will have increased significantly.

It will take far longer to sell a property than people have become accustomed to in the previous two years. This is an excellent opportunity to be both a buyer and a seller. If you've been sitting on the sidelines, now is the moment to act. The demand for real estate in South Florida is being driven by new residents and corporate relocations from high-tax metropolitan regions such as New York.

While rising home prices may be terrible news for many homeowners, it's good news for rental property investors, helping to explain why rental growth and demand in South Florida are so high. South Florida has around 100 cities and villages, including Miami, Fort Lauderdale, West Palm Beach, Boca Raton, Boynton Beach, and North Miami.

South Florida, sometimes known as the Greater Miami Area, is the seventh-largest metropolitan area in the United States and the second-largest in the southeastern United States, trailing only the Washington-Arlington-Alexandria MSA. More than 6.7 million people live in the region, which encompasses more than 6,000 square miles and three counties: Miami-Dade, Broward, and Palm Beach.

Will the South Florida Housing Market Crash?

The housing market in South Florida is still strong and unlikely to crash in 2023. There are several factors that drive housing demand in South Florida:

Climate: South Florida has a warm, tropical climate that attracts many retirees and snowbirds, who are looking for a place to escape the cold weather during the winter months. This demand for seasonal housing helps to drive up housing prices in the region.

Tourism: South Florida is home to many popular tourist destinations such as Miami, Fort Lauderdale, and West Palm Beach. The steady flow of tourists in the area helps to boost the economy and creates a demand for both short-term and long-term rental properties.

Job Market: South Florida has a diverse economy, anchored by industries such as finance, healthcare, and real estate. The strong job market in the region helps to attract new residents and supports the demand for housing.

International Buyers: South Florida is a popular destination for international buyers, particularly those from Latin America and Europe. The strong demand from these buyers helps to drive up housing prices in the region.

Demographics: South Florida's population is growing and is expected to continue to grow in the future, which is a driver for housing demand. Additionally, the increasing population of retirees in the area is also driving demand for housing.

Bottom line: We're not seeing any major home price decline or crash in the South Florida housing market just yet. The current supply of homes in South Florida still favors sellers. In the long run, it is hoped that higher interest rates would result in more days on the market (which gives buyers more choices). The price rise will ultimately slow as a result of higher interest rates. With the deceleration of price rise, total inventory might expand in the future. Historically, inventory grows six months after interest rates rise, but today’s market is unlike any other.

Sources:

https://www.floridarealtors.org/tools-research/reports/florida-market-reports
https://www.miamirealtors.com/category/news-releases/
https://www.miamirealtors.com/news/south-florida-market-stats/

South Carolina Housing Market: Prices, Trends, Forecast 2023

April 10, 2023 by Marco Santarelli

Welcome to the dynamic South Carolina housing market, where trends are constantly evolving and opportunities abound. As we head into 2023, experts predict continued growth in the state's real estate sector. From historic Charleston to vibrant Greenville, we'll explore the latest prices and trends, as well as what the forecast holds for the future. Whether you're a first-time homebuyer, a seasoned investor, or simply curious about the market, this is the guide for you. Let's dive in!

South Carolina's housing market is currently characterized by a significant demand-supply mismatch, causing challenges for many low-income households in the state. According to a recent study conducted by the University of South Carolina's business school and SC Housing, the increase in demand for housing has not been matched by a corresponding increase in housing supply. The study also highlighted rising mortgage interest rates as another challenge facing the state's housing market.

The study conducted by USC and SC Housing found that over 30% of households making between $35,000 and $75,000 annually are housing cost-burdened, with over one-third of their income spent on housing. The study also showed that low-income households, making less than $35,000 annually, face the biggest challenge in finding affordable housing.

This situation has been further exacerbated by rising mortgage interest rates resulting from the Federal Reserve's efforts to control inflation. The supply and demand mismatch has made it difficult for many prospective homebuyers to find homes within their budget, with some opting to stay put in their current homes.

South Carolina Housing Market Forecast

The average home value in South Carolina is $267,835, up 10.8% from the previous year, according to data released by Zillow. The time it takes for a home to go from listing to pending is around 24 days, indicating a strong demand for housing in the state. Zillow's MSA level forecast provides a projection of home price changes for various metropolitan areas in South Carolina over the next few years. The forecast estimates the percentage change in home values from the base date (in this case, February 28, 2023) to three different future dates: March 31, 2023, May 31, 2023, and February 29, 2024.

For example, for the Greenville metropolitan area, the forecast estimates a 0.4% increase in home values from February 28, 2023 to March 31, 2023, a 0.7% increase from February 28, 2023 to May 31, 2023, and a 2% increase from February 28, 2023 to February 29, 2024. Similarly, for the Columbia metropolitan area, the forecast estimates a 0.5% increase in home values from February 28, 2023 to March 31, 2023, a 0.8% increase from February 28, 2023 to May 31, 2023, and a 2% increase from February 28, 2023 to February 29, 2024.

It's worth noting that the forecast is just an estimation, and actual home price changes may differ from what is projected. However, the MSA level forecast can be a helpful tool for buyers and sellers to get a sense of how the market may behave in the coming months and years.

So what does this mean for buyers and sellers in South Carolina? For sellers, the current market presents an opportunity to sell their homes at a good price, thanks to the high demand and relatively low supply of homes. On the other hand, buyers may find it more difficult to find affordable homes, as prices continue to rise. It is important for buyers to do their due diligence and not make decisions that could strain their finances. Experts advise potential buyers to weigh their options carefully and only purchase homes that they can afford.

In conclusion, South Carolina's housing market is currently facing challenges due to a significant demand-supply mismatch, which has been exacerbated by rising mortgage interest rates. While the market presents an opportunity for sellers to sell their homes at a good price, buyers may find it challenging to find affordable homes. It is important for buyers to make informed decisions and only purchase homes that they can comfortably afford.

Read About: Charleston SC Housing Market Trends

Looking to the future, South Carolina's housing market is expected to continue growing, with different cities projected to experience varying degrees of growth. As the Federal Reserve continues to raise interest rates to control inflation, it is likely that mortgage interest rates will continue to rise. This increase in the cost of obtaining a mortgage could lead to a decrease in demand for real estate, which in turn could lead to a reduction in home prices. However, this remains to be seen, and we will continue to monitor the state's housing market trends in the coming months.

Will The South Carolina Housing Market Crash?

We continue to hear rumors of a market crash, but local data does not corroborate this at this time. According to recent reports, the South Carolina housing market has been experiencing a surge in demand and rising prices. This is partly due to an influx of people moving to the state from other parts of the country, attracted by the state's relatively low cost of living, pleasant climate, and the growing job market.

South Carolina is a fantastic place to live or retire due to its pleasant temperature and low total cost of living. According to a Retirement Living poll, South Carolina is the fourth best state in which to retire. South Carolina boasts a reduced cost of living and several lovely beaches that are warm almost all year.

However, some experts have expressed concern that this rapid growth in demand and prices could eventually lead to a housing bubble and subsequent crashes. If interest rates were to rise significantly, for example, it could make it more difficult for buyers to afford homes, which could lead to a decline in demand and a subsequent drop in prices.

That being said, it's important to note that the South Carolina housing market has weathered economic downturns in the past and has generally shown resilience. Additionally, there are many factors that could impact the housing market in the future, including changes in government policies, demographic shifts, and natural disasters.

Ultimately, it's difficult to say with certainty whether the South Carolina housing market will crash. However, it's always a good idea to do your own research and consult with experts in the field before making any significant financial decisions.

South Carolina Housing Supply Graph

Data Sources:

https://www.zillow.com/research/data/
https://www.zillow.com/sc/home-values/
https://www.zillow.com/rental-manager/market-trends/sc/
https://fred.stlouisfed.org/series/ACTLISCOUSC#
https://www.redfin.com/state/South-Carolina/housing-market
https://www.rent.com/research/average-rent-price-report/
https://celadonliving.com/pros-cons-living-in-south-carolina/
https://www.wltx.com/article/money/economy/south-carolina-housing-supply-home-life/101-f724d2f9-e864-448a-b268-2515a0c68848

North Carolina Housing Market: Prices, Trends, Forecast 2023

April 10, 2023 by Marco Santarelli

North Carolina's real estate market has been growing in recent years due to its beautiful shorelines and mountains, making it a desirable place to live for many people. According to the reports from Redfin and Zillow, the state has seen a significant uptick in home prices. However, there are also signs of slowing, suggesting that the red-hot housing market brought on by COVID is now stabilizing. In this blog post, we will delve into the current state of North Carolina's housing market, what it means for buyers and sellers, and the housing market forecast for 2023.

North Carolina Housing Market Overview

The North Carolina housing market is experiencing what the rest of the country has seen housing-wise, with the red-hot market of the past couple of years experiencing some course-correcting adjustments. According to Redfin, the number of homes sold is down by 15.4 percent year-over-year, and about 23 percent of North Carolina homes sold above asking price in February, a significant decline of 24.6 points compared to this time last year.

Some cities in North Carolina are more competitive than others, though. For example, homes in Wilmington are selling in 29 days on average, while in Asheville, that number jumps to 58 days. Both cities made Bankrate's top five lists of Best Places to Live in North Carolina. According to Zillow, the average North Carolina home value is $300,640, up 10.5% over the past year, and the typical home goes to pending in around 19 days.

As of February, the median sale price for a home in North Carolina was $340,300, up 3.1 percent from the previous year. Despite this increase, it is still below the national median price of $363,000. The sale-to-list ratio is 98.1 percent, indicating that homes typically sell for around 2 percent less than their list price. In February, homes took an average of 52 days to sell, about 9 days longer than in February 2022. Additionally, according to data from ClosingCorp, the average closing costs are 1.1 percent of the home's sale price.

Inventory is another significant factor to consider in the North Carolina housing market. As of February, there was a 2-month supply of inventory, with 35,581 homes for sale. A balanced market typically requires a 5- to a 6-month supply of inventory, indicating that it is currently a seller's market.

North Carolina Housing Market Forecast for 2023

According to Zillow, the North Carolina housing market forecast for 2023 looks promising, but it may not be as favorable as the previous year. Based on the data provided, it appears that most of the regions in North Carolina are expected to experience moderate to strong growth in terms of housing prices from 2023 to 2024.

Some of the regions that are expected to experience the most significant growth in housing prices include Shelby, Henderson, and Rockingham, with projected growth rates ranging from 3.1% to 4.2% between March 2023 and February 2024. Other regions, such as Lumberton and Roanoke Rapids, are also expected to see strong growth during this time frame, with projected growth rates of 1.7% to 2.9% per month.

However, it is important to note that some regions may experience slower growth in housing prices during this period. For instance, Mount Airy is projected to see a slight decline in housing prices, with a growth rate of -0.2% per month, while Charlotte and Durham are expected to see only marginal growth during this time frame, with growth rates ranging from -0.1% to 0.2% per month.

Therefore, North Carolina's housing market is stabilizing after the red-hot housing market brought on by COVID. Although the housing frenzy is slowing down, some cities are still more competitive than others. Home values are predicted to increase in 2023, albeit at a slower pace than in previous years.

Overall, it appears that the North Carolina housing market is expected to remain robust in 2023 and 2024, with most regions experiencing moderate to strong growth in housing prices. However, there may be some regional variations in terms of growth rates. It is still a seller's market due to the low inventory, but the market is expected to remain steady. If you are a seller, it is a good time to sell, and if you are a buyer, it is essential to act quickly to secure your dream home.

Will The North Carolina Housing Market Crash?

We continue to hear rumors of a market crash, but local data does not corroborate this at this time. Even if minor, the monthly figures indicate that the market has begun to cool.

Based on the data provided, it doesn't appear that the North Carolina housing market is in danger of crashing in the near future. While some areas may experience slight declines in home values from 2023 to 2024, many areas are projected to see modest gains. The overall trend for the state is positive, with an average projected increase of 1.4% in home values over the next year.

North Carolina is home to Charlotte, the second-largest financial industry city in the United States after New York. Charlotte is showing no signs of slowing in its quest to be an even more influential financial hub. Charlotte has had substantial growth since the year 2000, despite reasonable delays in the expansion of financial services owing to the 2008 financial crisis. Since 2000, there has been a 47.7% rise in the number of financial industry positions in Charlotte, compared to just an 11.7% increase in the United States as a whole.

In 2023, North Carolina is predicted to remain a top-ranked state and relocation destination. The flood of new inhabitants will increase competition and limit housing availability, making North Carolina real estate even tighter. According to YouGov, the state is the fifth-best place to live. The state ranks second in terms of business climate, seventh in terms of education, and seventh in terms of fiscal stability.

It's important to note that the housing market can be affected by a variety of factors, including economic conditions, job growth, and interest rates. These factors can be difficult to predict, and unexpected events like natural disasters or pandemics can also have an impact. However, based on the current data, there doesn't appear to be any major cause for concern about a housing market crash in North Carolina.

<<Read About Charlotte Housing Market Trends>>>

<<Read About Raleigh Housing Market Trends>>>

North Carolina Housing Supply Graph

North Carolina housing market — Source: FRED

Data Sources:

https://www.zillow.com/research/data/
https://www.zillow.com/nc/home-values/
https://www.zillow.com/rental-manager/market-trends/nc/
https://fred.stlouisfed.org/series/ACTLISCOUNC#
https://www.redfin.com/state/North-Carolina/housing-market
https://www.rent.com/research/average-rent-price-report/
https://www.bankrate.com/real-estate/housing-market/north-carolina/
https://www.propeterra.com/resource-center/charlotte-north-carolina-banking
https://today.yougov.com/topics/travel/articles-reports/2021/04/13/us-states-ranked-best-worst-according-americans

Where Are Housing Prices Falling 2022?

November 11, 2022 by Marco Santarelli

Fortune reached out Moody's Analytics to get access to its latest proprietary housing analysis. The financial intelligence business predicted home price changes in 414 markets between 2022 and 2024. Moody's Analytics expects that 210 of the nation's 414 major housing markets will see home prices falling in the next two years and 204 will see home prices rise. 183 of the 413 biggest U.S. home markets are “overvalued” by more than 25%. Boise, Idaho, is 71.7% overvalued, and Flagstaff, Arizona, is 60.6%.

Redfin revealed its “risk score” on Friday, which identifies the home markets that are most vulnerable to a “housing slump.” The greater a market's “risk score,” the more likely it is that house prices will fall year over year. Redfin examined 98 regional housing markets and evaluated indicators such as home-price volatility, average debt-to-income ratio, and home-price growth. Among the 98 markets measured by Redfin, Riverside had the highest likelihood of seeing a “housing downturn.”

It was followed by Boise, Cape Coral, North Port, Las Vegas, Sacramento, Bakersfield, Phoenix, Tampa, and Tucson. Popular migration destinations where home prices soared during the pandemic, such as Boise, Phoenix, and Tampa, are most likely to see the effects of a housing downturn amplified and year-over-year home prices decline if the economy enters a recession, a scenario that some economists believe is likely as inflation persists and stock markets stumble.

<<<Also Read: Will the Housing Market Crash? >>>

Homeowners in those markets who are considering selling should market their properties as soon as possible to avoid price drops. Rust Belt cities like Cleveland and Buffalo, which are still inexpensive, are the most resilient to a housing market crash. The U.S. housing market slowed significantly in the spring due to rising mortgage rates. Redfin studied which metros are most vulnerable to home-price reductions if the country enters a recession and which are most immune to an economic slump.

Recession-proof northern metros, including Cleveland and Buffalo, NY, are relatively inexpensive. Prospective homebuyers in these places can proceed with confidence. Redfin's examination of 98 U.S. metros with relevant data utilizes home-price volatility, average debt-to-income ratio, and home-price growth. Each metro is given an overall risk score relative to the others. 100 indicates the highest possibility of a housing market slump, including home-price decreases, while 0 indicates the lowest.

“Recession fears are escalating, mostly because the Fed has signaled it will continue to raise interest rates to tame inflation and cool consumer demand. Higher interest rates led to surging mortgage rates, which have already cooled down the housing market,” said Redfin Senior Economist Sheharyar Bokhari. “If the U.S. does enter a recession, we’re unlikely to see a housing-market crash like in the Great Recession because the factors affecting the economy are different: Most homeowners have a fair amount of home equity and not much debt and unemployment is low.”

Housing Markets at Risk of Falling Home Prices

If the U.S. enters a recession, Riverside's home market will chill the most. It has the highest danger score of any major U.S. city, 84. It's more likely than other metros to see prices drop year over year during a recession or economic slowdown, according to housing and economic statistics. Riverside, which includes San Bernardino, Ontario, and Palm Springs, has variable house values and was a favorite location during the epidemic for both permanent movers and second-home buyers.

Riverside is followed by Boise (76.9), Cape Coral, FL (76.7), North Port, FL (75), and Las Vegas (74.2).

Sacramento, CA (73.1), Bakersfield, CA (72.2), Phoenix (72), Tampa, FL (70.7), and Tucson, AZ (70.1) round out the top 10.

Many of these housing markets, like Riverside, are popular migration destinations or have quickly growing property prices, both of which increase their likelihood of a housing slump. Boise, Cape Coral, North Port, Las Vegas, Sacramento, and Phoenix were among the 20 fastest-cooling areas in May when mortgage rates reached 5.5%. As the economy continues to decline, prices may fall in many of these metros. Six of the 10 areas most at risk of downturns are among the most popular destinations for Redfin.com users moving from one metro to another.

Maricopa County (Phoenix) and Riverside County gained more residents from other parts of the U.S. than anywhere else in 2021, according to the U.S. Census. The most vulnerable metros have likewise seen an outsized price rise. North Port has the nation's fastest-growing house values, up 30.5 percent year over year in May, followed by Tampa (28.1 percent) and Las Vegas (26.8 percent ). Overall, nine of the ten most vulnerable locations had faster-growing house values than the national median (the exception is Sacramento, however, home prices there rose more than 40% throughout the pandemic, reaching $610,000 in May 2022).

Several of those metros went from inexpensive to unaffordable during the epidemic, owing in part to the migration of individuals from other locations. Among them is Boise, where the typical home price increased from $330,000 to $550,000 between May 2020 and May 2022, and Phoenix, where it increased from $300,000 to $485,000.

“Boise’s market is already turning around, as a lot of the people who moved to Idaho during the pandemic are either moving back to their hometowns or cashing in and moving to more affordable places. The housing market was hot during the pandemic, largely because of out-of-town buyers,” said Boise Redfin agent Shauna Pendleton.

Three at-risk metros are in California and three in Florida. San Jose, Oakland, and San Francisco experienced relatively moderate price increases throughout the epidemic, its people tend to have high salaries and considerable home equity, and their housing markets started falling fast in the first half of 2022, mainly owing to collapsing tech stocks. Not all homes in these metros will lose value. Large single-family houses in spread-out areas are recession-proof.

Housing Markets in Which Prices Are Unlikely to Fall

Relatively affordable Rust Belt metros are most resilient in the face of a recession. In case of a recession, Akron, Ohio has the lowest risk of experiencing a housing decline. It has the lowest total risk score of any major US city at 29.6. Low home-price volatility, a low debt-to-income ratio, a small number of second houses, and the fact that properties in Akron are unlikely to be flipped are some of the characteristics that make the city relatively stable.

With an overall risk score of 30.4, Akron is followed by Philadelphia, Montgomery County, PA (31.4), El Paso, TX (32.2), and Cleveland (32.4). The top ten include Cincinnati (32.6), Boston (32.6), Buffalo, NY (33.1), Kansas City, MO (33.4), and Rochester, NY (34.4). Almost all of those metros are inexpensive and have relatively slow-increasing prices, both of which would benefit their housing markets in the event of a recession.

Almost all of the most resilient metros are located in the northern United States, either in the Rust Belt or on the East Coast. Three of them are in Ohio, two in New York, and two in Pennsylvania. In nine of the ten most resilient metros, prices climbed at a slower rate than the national average (El Paso is the exception).

Seven of the 10 metros least in danger of a housing downturn had a median sale price below $300,000 in May, and nine of them were below the $431,000 national median. Affordability benefits property markets in a recession because more people can buy houses, and such locations may attract out-of-town buyers. Boston is pricey, although property prices climbed modestly throughout the epidemic. It's busy and lost residents as remote work became prevalent.

U.S. Metros Most and Least Susceptible to a Housing Downturn in the Next Recession

Ranked by highest to the lowest chance of a housing downturn. The ranking combines 10 indicators to come up with an overall risk score for each metro, relative to the other metros in this analysis. The highest possible score is 100 and the lowest possible score is 0. The indicators are as follows: home price volatility, average debt-to-income ratio, average home-loan-to-value ratio, labor market shock, percent of homes flipped, how much the housing market is “cooling” compared with other metros, the year-over-year change in domestic migration, the share of homes in the metro that are second homes, year-over-year price growth and elasticity of supply. Each factor is weighted equally.

U.S. Metro Area	Overall Score	Average Home-Loan-to-Value Ratio, 2021	Percent of Homes Flipped in 2021	Rank: How Quickly Housing Market Cooled in First Half of 2022	Net Domestic Migration in 2021, YoY	Share of Second Homes, 2021	Price Growth in 2021, YoY
Riverside, CA	84	83%	4.50%	15	19,204	7.70%	21.00%
Boise, ID	76.9			6	6,782	6.00%	30.90%
Cape Coral, FL	76.7	81%	2.90%	11	7,345	23.40%	23.60%
North Port, FL	75	79%	4.40%	18	8,283	20.20%	23.30%
Las Vegas, NV	74.2	84%	8.30%	12	-15,143	7.60%	18.60%
Sacramento, CA	73.1	81%	5.40%	2	4,157	4.30%	19.30%
Bakersfield, CA	72.2	87%	3.80%	21	6,111	2.50%	17.30%
Phoenix, AZ	72	82%	10.30%	17	-15,530	7.20%	25.40%
Tampa, FL	70.7	85%	7.40%	22	524	8.10%	19.60%
Tucson, AZ	70.1	84%	7.70%	54	-2,677	7.10%	21.50%
San Diego, CA	69.8	81%	5.30%	8	-8,189	3.70%	17.50%
Jacksonville, FL	69.3	85%	7.20%	36	4,136	6.20%	16.60%
Stockton, CA	68.2	84%	4.70%	5	3,578	1.00%	19.30%
Knoxville, TN	67	86%	4.60%	13	4,527	5.20%	18.30%
Orlando, FL	63.8	85%	6.40%	31	-6,536	8.70%	16.70%
Charleston, SC	63.4	85%	3.80%	67	-2,921	7.60%	15.40%
West Palm Beach, FL	63.3	80%	3.10%	30	972	12.00%	17.40%
Fresno, CA	60.6	85%	4.70%	37	2,719	2.90%	17.90%
Raleigh, NC	60.4	83%	8.90%	42	3,430	2.60%	17.50%
Oxnard, CA	59.8	79%	2.50%	28	323	3.30%	16.70%
Salt Lake City, UT	57.7				-3,020	2.00%	22.80%
Columbia, SC	56.9	90%	4.40%		2,296	3.20%
Providence, RI	56.6	85%	2.70%	44	3,664	3.90%	15.40%
Atlanta, GA	56.4	86%	9.90%	47	-4,229	2.20%	19.20%
Miami, FL	56.3	82%	2.90%	53	-5,120	5.90%	18.60%
Charlotte, NC	56.1	85%	10.10%		-6,444	2.70%	16.50%
Virginia Beach, VA	55.8	92%	3.20%	80	864	3.40%	8.30%
Tacoma, WA	55.5			9	-3,571	1.70%	19.80%
Detroit, MI	54.8	87%	5.20%	70	-2,062	1.00%	15.40%
Los Angeles, CA	54.8	79%	4.10%	46	-69,329	1.90%	17.30%
Austin, TX	54.6			16	-8,609	3.90%	31.60%
Portland, OR	54.3	82%	3.70%	14	-17,716	2.30%	15.40%
Anaheim, CA	53.9	76%	4.50%	20	-6,644	3.80%	16.00%
Denver, CO	53.8	82%	6.90%	7	-18,063	2.40%	16.70%
Colorado Springs, CO	53.7	87%	5.00%		693	2.50%
Baton Rouge, LA	52.4	89%	3.00%		2,287	2.40%	9.80%
Greenville, SC	52.1	85%	3.50%	32	1,771	4.70%	14.00%
Winston-Salem, NC	51.9	87%	5.10%			2.70%	13.70%
Grand Rapids, MI	51.7	86%	3.60%	29	1,028	2.40%	15.20%
Greensboro, NC	51.7	87%	6.70%	38	-181	2.10%	11.80%
Warren, MI	50.5	86%	2.90%	35	6,180	1.60%	11.40%
Tulsa, OK	50.1	88%	3.40%	45	2,325	2.10%	12.50%
Fort Lauderdale, FL	49.9	82%	3.00%	72	-5,121	7.50%	13.30%
Fort Worth, TX	49.6			50	1,978	1.70%	18.30%
Nashville, TN	49.3	84%	8.30%	48	-6,093	3.40%	17.00%
Allentown, PA	48.6	87%	2.20%	62	3,722	3.40%	14.20%
Camden, NJ	47.9	88%	3.00%	75	4,300	0.50%	17.90%
Houston, TX	47.7			24	-334	2.90%	15.50%
Seattle, WA	47.6	79%	1.90%	4	-37,365	1.80%	17.20%
Nassau County, NY	47.4	80%	3.60%	58	12,296	4.70%	15.20%
Albuquerque, NM	46.8				-1,714	2.80%
New Orleans, LA	46.6	88%	2.90%	23	-3,930	3.40%	10.70%
San Antonio, TX	46.6			40	-138	2.90%	15.10%
San Jose, CA	46.4	74%	2.50%	1	-22,661	0.80%	13.60%
San Francisco, CA	46.3	72%	1.90%	10	-55,918	2.40%	4.80%
Oakland, CA	45.8	78%	2.60%	3	-23,280	1.00%	16.30%
Dallas, TX	45.4			40	-5,685	1.70%	17.90%
Richmond, VA	45.4	87%	3.70%	59	1,995	1.40%	12.30%
Oklahoma City, OK	45.3	88%	5.10%	52	476	1.70%	10.60%
Washington, D.C.	44.2	87%	2.50%	28	-35,800	1.50%	10.10%
New Haven, CT	44.1	87%	2.00%	82	4,492	1.90%	15.80%
Birmingham, AL	43.4	88%	5.90%	68	95	1.40%	8.40%
Little Rock, AR	43.1	89%	4.90%	43	472	1.80%	10.70%
Frederick, MD	42.9	84%	2.00%	25	-58	0.90%	11.70%
Memphis, TN	42.7	87%	7.50%	33	-535	1.20%	13.30%
Honolulu, HI	42.6	79%	0.50%	19		6.20%	7.80%
St. Louis, MO	42.2	86%	3.40%		-2,214	1.30%	10.10%
Baltimore, MD	41.9	86%	2.60%	74	6,085	1.40%	8.50%
Bridgeport, CT	41.7	81%	1.10%	88	8,871	2.00%	11.60%
Worcester, MA	40.8	86%	1.80%	57	3,354	1.20%	16.10%
Indianapolis, IN	39.9			41	902	1.40%	13.50%
Newark, NJ	39.3	84%	1.90%	73	7,348	2.80%	13.20%
Wichita, KS	39.3				-1,813	1.10%	12.50%
Lake County, IL	38.6	85%	1.80%	87	2,746	1.70%	14.40%
Louisville, KY	38.6	87%	4.80%	34	-378	1.20%	9.70%
Wilmington, DE	37.8	88%	2.80%	64	738	1.80%	11.30%
Hartford, CT	36.8	86%	1.70%	80	7,182	1.80%	12.00%
Minneapolis, MN	36.8	85%	3.70%	50	-10,673	1.30%	11.10%
Gary, IN	36.7				939	1.20%	9.70%
Pittsburgh, PA	36.4	87%	1.60%	76	-337	1.50%	12.70%
Elgin, IL	35.8	84%	1.10%	60	3,590	0.60%	11.50%
New York, NY	35.4	78%	1.70%	48	-2,01,570	2.80%	12.30%
Syracuse, NY	35.2	86%	2.20%		1,510	3.30%	11.00%
Milwaukee, WI	35.1	86%	3.30%	79	-2,993	1.40%	7.20%
Omaha, NE	35.1	87%	4.90%	56	-237	1.30%	9.70%
Albany, NY	34.5	87%	2.00%	90	3,521	2.80%	13.70%
Chicago, IL	34.4	86%	1.80%	70	-32,998	1.30%	11.70%
Columbus, OH	34.2	85%	3.40%	61	2,507	1.40%	13.50%
Rochester, NY	34	85%	2.00%	86	1,330	3.20%	12.60%
Kansas City, MO	33.4				-1,491	1.30%	10.90%
Buffalo, NY	33.1	86%	2.60%	78	1,877	1.40%	17.00%
Boston, MA	32.6	79%	1.20%	63	-23,964	2.80%	12.20%
Cincinnati, OH	32.6	87%	3.90%	84	-360	1.30%	13.90%
Cleveland, OH	32.4	86%	2.50%	71	225	1.20%	9.50%
El Paso, TX	32.2			89	-24	1.80%	13.90%
Montgomery County, PA	31.4	83%	1.80%	66	6,685	0.80%	11.00%
Philadelphia, PA	30.4	86%	2.00%	64	-15,721	1.40%	10.10%
Akron, OH	29.6	87%	2.70%	83	2,029	1.20%	7.90%

Source: https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/