Have Housing prices hit their peak?

Discussion in 'Economics & Trade' started by Lil Mike, Jun 13, 2022.

  1. Lil Mike

    Lil Mike Well-Known Member

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    Signs may point to yes.

    These 40 ‘overvalued’ housing markets could see 15% to 20% home price declines if a recession hits
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    Last week, Moody's Analytics gave Fortune exclusive access to its updated proprietary analysis of U.S. housing markets. The firm aimed to find out whether fundamentals, including local income levels, could support local home prices. The finding? Through the first quarter of 2022, national house prices are "overvalued" by 24.7%. That's up from the fourth quarter of last year, when Moody’s Analytics determined national house prices were "overvalued" by 20.9%.

    Let’s be clear: That doesn't mean Moody’s Analytics thinks U.S. home prices are about to drop by 24%. Instead, what it means is that home prices are, historically speaking, priced very high relative to household incomes. Now that we've reached this level, Zandi says, it will make it harder for home price growth to push upwards. Indeed, Zandi is predicting the year-over-year rate of home price growth will flatline to 0% by this time next year.

    Mark Zandi, for a professional economist, is notoriously wrong. However I hope he's right that housing prices are cooling off.
     
  2. kazenatsu

    kazenatsu Well-Known Member Past Donor

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    From the map, it seems like those are mostly "second tier" city areas. Not the prime destination cities where people most want to live or the places that are actually most expensive.

    They might be overvalued because so many people have been moving out of other overcrowded areas and moving to those areas, driving construction and over-inflating the local economies.

    It is interesting the Miami area seems to be overvalued right now. That area might be more vulnerable to recession since many people who stay there temporarily are from other areas.
     
    Last edited: Jun 13, 2022
  3. Lil Mike

    Lil Mike Well-Known Member

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    Since I predicted this, I'm starting to feel good about my prediction.

    Home prices have begun falling in these 10 cities, according to Realtor.com

    While low housing inventory continues to pose a problem for homebuyers, rising mortgage interest rates appear to be dampening demand and leveling out home prices in select regional markets, according to a new report from Realtor.com.

    "Many would-be buyers are being priced out of homeownership as higher mortgage rates mean more expensive monthly housing payments," the report reads. "But when there are fewer buyers competing for homes and bidding them up, prices typically go down."
     
  4. Get A Job

    Get A Job Newly Registered

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    it's all about location, always will be.
     

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