These are difficult times for all homebuyers across the country. Still, some are even worse than others.
Mortgage rates have recently risen and home prices have reached record highs in recent months, but first-time homebuyers have been locked out of the market. House prices are 34% higher than they were two years ago and continue to rise in April month-on-month. According to data released by the Federal Housing Finance Agency (FHFA) on Tuesday.
However, while the housing market is bad for buyers across the country, housing prices are rising disproportionately in certain regions, and some have expressed concern about the potential collapse of the housing market.
According to Mark Zandi, Chief Economist at Moody’s Analytics, “the most overvalued markets are in the South and Southwest” in areas where home prices were “pushed up by remote work” during the COVID pandemic. “.
According to Moody’s Analytics, these are the cities with the most overrated homes in the country.
- Boise, Idaho
- Colorado Springs, CO
- Las Vegas, Nevada
- Phoenix, Arizona
- Coder Lane, Idaho
- Tampa, Florida
- Atlanta, Georgia
- Fort Collins, Colorado
- Sherman, Texas
- Jacksonville, Florida
- Idaho Falls, ID
- Lakeland, Florida
- Greeley, Colorado
- Washington Longview
- Charleston, South Carolina
- Albany, Oregon
- Denver, Colorado
- Clarksville, Tennessee
- Greensboro, North Carolina
- Charlotte, North Carolina
“To Carolina, Atlanta, Florida, parts of Texas, and even the Mountain West. You can draw a line from Boise to Phoenix to Tucson. All major metropolitan areas on either side of that line are meaningful overkills. It has been evaluated. “Zandy says Newsweek..
Moody’s Analytics senior economist Thomas Lasalvia said things got worse in “many places in Sunbelt that have been migrating in the last few years, and in fact where they have been migrating for decades.” I am confirming that.
“Many moved northeast and south to Texas, and many left California and Seattle to Mountain West and Texas, which caused prices to skyrocket,” Zandy said. increase.
“Phoenix, Las Vegas, Reno, Boise and other locations have passed through the Southwest and Mountain West, and prices have actually risen at record levels,” says La Salvia. Newsweek..
“We are talking 20, 30, 40 percent [increase] For some of these metro homes. And, of course, much of it was due to demand pressure from out-of-state people. Whether it’s a second home or a move, “Lasalvia explains.
According to LaSalvia, many out-of-state people who migrated to these cities are “large and common due to selling homes in expensive areas and earning a lot of work in remote areas” in areas with significantly smaller local populations. I had a “deposit account”. income. With this money, they kicked local buyers out of the market in a bidding war to buy a home.
Over time, this dynamics also attracted “flippers,” Zandy says.
“But if it was like a temporary shock, future demand would have to come from those locals,” Lasalvia said, causing the housing market to overheat in these cities. The situation will last for a long time, explaining that it is unlikely, and prices will eventually cool.
“We’re already seeing a lot in the type of market where the market share of listed homes is declining. I think that’s going to happen. Now I don’t think there’s a 30% drop. Still, 5 ~ 10 percent is very important. “
La Salvia and Zandi do not believe the market is heading for collapse. On the other hand, I expect the market to cool down.
“I don’t think there will be crashes for a variety of reasons. One is that the physical market is very tight. Vacancy rates are fairly close to record lows and record lows in the sales market. I did, “says Zandy.
“Lending has been very good since the financial crisis. Underwriting is strong. Fixed-rate mortgages for 30 or 15 years are not exotic and complicated. There are many defaults and many defaults to lower prices. We need bad debt, and finally, we have a lot of investors, institutional investors in the market, and a lot of capital that we have a lot of opportunities to intervene to buy, “explains Zandy. ..
“We see some very significant fixes in the housing market, especially in the most fluid markets and the South and West, but we don’t see any crashes,” he adds. “I think it’s very unlikely. It will probably only happen if you enter some sort of stagflation environment with very high interest rates and very high unemployment. But that seems to be the case. do not have”
Zandy said he expects Colorado Springs to become a market with “significant price declines” in the near future.
“But that said, prices in these markets have risen by 30% over the past year and need to be explained accordingly,” says Zandi.
“It has risen 60,75% over the last few years, so in a sense, these markets are returning only a small portion of the profits they have experienced in recent years.”