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Housing market: These western cities are ‘significantly overvalued’

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As a result of high interest rates, US housing slump deepenshousing experts and economists across the country have noted that home prices are falling across the country.

Estimates vary on how deep and wide-ranging the house price decline will be after 2023, but at least one economist predicts a fall in domestic house prices of up to 5%. But what if the country’s economy enters a recession? That projection jumps to a domestic price decline of 5% to 10%.

Moody’s Analytics Chief Economist Mark Zandy said: luckreported Moody’s quarterly analysis on Tuesday.

According to Moody’s analysis, 210 housing markets nationwide are currently “significantly overvalued” or overvalued by more than 25%. In these markets, Moody’s expects house prices to fall by 5% to 10%. What if there is a recession? Home prices in these areas could fall by 15% to 20%.

“Simply put, more than half of the nation’s largest rural housing market is vulnerable to a 15% to 20% decline in home prices. It dropped 27% from peak to trough,” reports Fortune.

With mortgage rates currently over 5%, and sometimes over 6%, in the Federal Reserve’s fight against inflation, people who want to buy a home are forced to lower their mortgage rates or They are pulling out of the housing market by cutting prices.

For Rick Palacios Jr., head of research at John Burns Real Estate Consulting, double-digit price declines “The Affordable Medicine You Need” For many housing markets in turmoil over the past two years.

Low mortgage rates, especially below 3% in 2020, masked the impact of dramatic price increases. Now that that mask has been lifted and prices are stuck high, that means a difference of hundreds of dollars a month in a homebuyer’s mortgage payment.

West’s ‘overvalued’ housing market

Of the 210 “significantly overvalued” housing markets (out of about 400 regional markets) identified in Moody’s analysis, the familiar subway is at the top. Wild and skyrocketing home prices make headlines in the West In the midst of a pandemic housing craze that has since hungover: Boise.

last month, Boise leads the country with the largest share of sellers who have lowered prices, nearly 70% of homes for sale see price drops in July. Denver was next with 58%. Salt Lake City ranked him third with 56.4%.

Idaho

  • Boise, Idaho According to Fortune/Moody’s analysis, home prices are estimated to be 76.9% overvalued, with up to 20% risk of home price declines.
  • Coeur d’AleneAnother Idaho city that exploded as a housing hotspot for the pandemic is also a bright red on Fortune’s map, being overvalued by an estimated 62.6%.
  • Idaho Falls, Pocatello, Twin Falls Regions in Idaho are also shaded red and are estimated to be overvalued by more than 57%, 59%, and 52%, respectively.

Arizona

  • phoenix — called “Poster Child” According to Moody’s, it was one of the first regions to see home prices fall as the pandemic’s housing boom hits and the housing market adjusts, overvalued by more than 57%.
  • Flagstaff Another red-washed metro is estimated to be overrated by more than 65%.
  • The Lake Havasu City – Kingman It is estimated that metropolitan areas are overestimated by more than 60%.
  • Prescott Valley It is estimated to be overrated by over 51%.
  • Tucson It is estimated to be overrated by over 34%.

Utah

  • Ogden Clearfield According to Moody’s, Utah’s metropolitan areas are the most “overvalued” markets in the state, with the region estimated to be over 50% overvalued.
  • Logan Coming next is estimated to be almost 44% overrated.
  • salt lake city It is estimated to be overrated by over 28%.
  • St GeorgeUtah’s southernmost city is estimated to be overvalued by more than 27%.
  • Provoorem Metropolitan areas are estimated to be the least overrated, at 17% or more.

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