Home News These bubbly housing markets—including Boise and Phoenix—already got their home price ‘top’ blown off

These bubbly housing markets—including Boise and Phoenix—already got their home price ‘top’ blown off

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Before the governor relaxed the stay-at-home order two years ago, white-collar professionals had already fled exorbitantly priced apartments in cities such as San Francisco and Seattle. The biggest beneficiary of the WFH home purchase wave was arguably Boise. House prices have skyrocketed 53%.You can even call it a poster child Pandemic housing boom..

But that Boise honeymoon is over.While mortgage rates are skyrocketing Driven the entire U.S. housing market to a slowdown, It has hit the Boise housing market particularly hard. It saw both Boise home sales plummet —28% down Year-over-year, and inventory levels soared, up 161% this year. It also strips away family values. According to ZillowThe median home selling price in Boise fell 3.5% in June.

Boise’s downward slide is just beginning. According to Rick Palacios Jr., Head of Research at John Burns RealEstate Consulting. By December, real estate research firms predict that Boise’s home prices will be negative year-on-year. For that to happen, Boise must not only lose all of the 2022 profits that are already happening, but also fall below the December 2021 price. Boise is not the only market where the “top” of home prices has plummeted. Markets like Phoenix and Austin are also on the decline, says Palacios.

“In many housing markets, we can make a strong claim that the last 10% of rising home prices are purely ambitious and irrational, and that it will be off the top very quickly,” says Palacios. increase. “That’s what we all see right now.”

what happened?Local housing market has become Farthest from the underlying economic fundamentals Now Fastest cooling..these are Cheerful marketI just saw house prices too high during the pandemic, including places like Denver and Nashville.one time Historically low mortgage rates Those who disappeared this spring and could become buyers began to feel the midst of record home price increases. Many home shoppers immediately stopped searching for homes.

View this interactive chart on Fortune.com

How did markets like Boise and Phoenix become so vibrant? Ali Wolf, Chief Economist at Zonda, has blamed supply constraints in these markets.Inflow of demand — this Federal Reserve identifies as the culprit in the pandemic housing boom— The boomtowns in the west simply overwhelmed supply. It saw a bidding war that took prices far beyond the fundamentals.

“Many western markets are landlocked for some reason. [by] Sea, mountain, national park, or growth boundary. As a result, buildings are more restricted in these markets compared to some countries that are less regulated and have more land to develop, “Wolf said. luck.. “Strong demand over the last two years has pushed home prices across the country, and given certain supply constraints, the West seems to have reached price caps faster than other markets.”

John Wake, an independent real estate analyst based in Phoenix, said: luck that Investors have also helped make these markets too expensive..The combination of record rises and historically low rates A deal too good for moms and pop landlords and institutional investors to let go as well..

Along the way, many investors can help. Conversely, investors can also help push down the market faster if it turns over.

“Investors sometimes move to herds. If Phoenix real estate is no longer a cool investment in 2022, it can have a big and quick impact on home sales. Many investors sell it. If you decide … yes. You don’t sell because you think you’re at the top of the market or because prices are falling, but investors will, and now they’re much more than they used to be. There are many investor-owned homes, “Wake said. luck..

View this interactive chart on Fortune.com

Where are you going next?according to Moody’s Analysis, US home prices have been set flat by this time of next year. Meanwhile, significantly “overrated” housing markets such as Boise and Austin are heading for a 5% to 10% trimming next year. It assumes that there is no recession. In the event of a recession, Moody’s Analytics predicts that US home prices will fall by 5%. Significantly “overrated” housing market down 15% to 20%..

John Barnes Real Estate Consulting is even more bearish. The company not only predicts that US home prices will fall in 2023, but also that US home prices will fall in 2024. Phoenix; Nashville; West Palm Beach, Florida; Las Vegas, Port St. Lucie, Florida; Riverside, CA; Fort Myers, Florida; Austin; Visalia, California (John Burns Real Estate Consulting predicts numbers only for paid clients Provides value).

Over the last two years, home prices in vibrant markets such as Austin and Phoenix have risen tremendously to 61% and 59%, respectively. But don’t be surprised if those markets lose some of it.

“If we don’t think we need to return some of it, I don’t know which planet you are on. That doesn’t make sense,” says Palacios.

I want to get the latest information Housing modifications??follow me twitter and @NewsLambert..

This story was originally Fortune.com

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