Home News Phoenix experts bash Goldman Sachs prediction of a 2008-level housing crash

Phoenix experts bash Goldman Sachs prediction of a 2008-level housing crash

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Data: Redfin; Charts: Axios Visuals

Ah New York Post article Reports that Goldman Sachs predicted a 2008-level housing crash in Phoenix sent ripples through the Valley’s real estate industry last week.

  • Yes, but: Local experts called the report “exaggerated”, “misleading” and “disadvantageous” when Axios Phoenix reached out for comment.

What they say: Butch Lieber, president of Phoenix Realtors, said: “This is not the reality of what is happening now, nor is it what we expect to happen this year.

Important reasons: is more than 100,000 Arizona housing was foreclosed on in 2008 and it took about a decade for the market to fully recover.

  • Naturally, we get a little uneasy when people talk about housing collapse.

what’s happening: The global investment firm is Phoenix, Austin, Texas. San Diego; San Jose, Calif. could see home prices fall 25% this year, according to an article in the New York Post.

Flashback: National home prices fell about 27% in 2008, according to the S&P CoreLogic Case-Shiller index. But in the Phoenix metropolitan area, homes have lost 56% of their value. NPR.

State of play: The median home price in Phoenix last month was $410,000, down significantly from the May peak of $470,000. redfinPrices started to fall after the Federal Reserve started interest rate hike March 2022.

environment: Home prices skyrocketed during the pandemic housing inventory could not meet the growing demand. This means people in more expensive places like Los Angeles are taking advantage of the work-from-home option and moved here.

  • Median housing prices Phoenix grew nearly 60% from $300,000 in March 2020 to a peak in May 2022.

Be smart: “The rate of appreciation has slowed, but the value hasn’t fallen,” said Mark Stapp, master executive director of ASU’s property development program.

  • Growth in 2021 and early 2022 was extraordinary and unsustainable, says Stapp. The interest rate hike has forced the market back to a healthier and more balanced place.

Line spacing: Several complicating factors led to the 2008 market crash. Most of them are not working in today’s Valley housing market.

  • Malicious Lending: Provider bank Expensive mortgages for high-risk borrowersa practice reformed since the Great Recession.
  • Overbuild: The Valley had more inventory than demand, driving prices down. Metro Phoenix is ​​currently experiencing a housing shortage and people continue to move here. Slowdown in housing construction We continue to see shortages due to recession concerns.

What we see: According to Leiber, the third week of January saw 1,800 new escrow transactions in the Valley, its best week since June 2022.

  • He expects that number to continue to grow as people agree to higher interest rates and start buying again.

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