As housing prices cool significantly in many U.S. markets, experts have mostly had reassuring words for nervous homeowners.
These real estate professionals have insisted that although a price correction is indeed underway, it should be modest — in most places.
However, a handful of markets might not be so lucky.
A recent Goldman Sachs report suggests that four particularly “overheated housing markets” could see deeper trouble. In fact, they “will likely grapple with peak-to-trough declines of over 25%,” according to Goldman Sachs.
If true, the swoon in those cities would rival the price meltdown seen in many markets during the bursting of the housing bubble tied to the Great Recession more than a decade ago.
Following are the four markets where home sweet home could soon turn bitterly sour for homeowners.
Austin, Texas, metro area
During the COVID-19 pandemic, Austin, Texas, was one of the hottest housing markets in the country. Droves of people relocated to the famously “weird” city.
But things changed fast in the second half of 2022. By year’s end, Austin had taken its place among the “9 Markets Where Home Values Have Fallen as Much as 10.6%.”
Phoenix metro area
Arizona was one of the states hit hardest when the last housing bubble burst. Is history now repeating itself?
In December, Phoenix made the list of “10 Housing Markets Where Bidding Wars Are Disappearing.” Time will tell if this now-cooling market once again plunges into a deep freeze.
San Diego metro area
The recent housing downturn has hit California particularly hard. Four Golden State cities appeared on the recent list of “10 Pandemic Boomtowns Where Housing Now Is Cooling.”
At the time, San Diego wasn’t among them. But Goldman Sachs says grim times likely lie ahead for homeowners in America’s Finest City.
San Jose, California, metro area
Many places in America are undergoing upheaval right now, but perhaps no place is struggling as much as the San Francisco Bay Area.
Large numbers of people are abandoning San Francisco in what has become the largest exodus from any city in the U.S. And in nearby San Jose, home prices are tumbling. By December, prices were down 10.6% — the worst showing of any U.S. market.
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