This is a result of the current economic climate, as well as several local conditions that could cause home prices to dip or stagnate.
In many U.S. cities, home prices ended up 2020 relatively high, defying forecasts of a housing slump due to the pandemic. However, this has given way to concerns that home prices will begin to decline in certain markets over the coming months.
For instance, cities such as Las Vegas, Phoenix, and Tampa may be the most vulnerable in terms of real estate prices. These cities have all had rapid price increases in recent years, but are now poised for moderate to significant declines.
In Las Vegas, unemployment levels remain high and there is very little job growth, which could lead to declining home prices. That said, the city does have a low cost of living which could keep buyers interested.
Meanwhile, in Phoenix, the hot real estate market could be cooling off due to increased job losses in the area. Additionally, new regulations in Arizona limit the ability of investors to purchase homes, which could lead to a decrease in demand.
Finally, Tampa’s market could suffer due to the fact that it is heavily reliant on tourism. With travel significantly down, this could put a damper on local real estate activity.
Overall, despite some cities having to check their growing home prices, analysts note that the U.S. real estate market as a whole should remain strong over the next few months. This is due to the fact that there is still strong demand for housing across most of the country, combined with historically low mortgage rates.
Although a few cities may experience a dip in home prices, the broader housing market should remain healthy over the coming months. Thus, potential buyers should be aware of any local conditions that could impact the real estate market and should exercise caution when purchasing a home in areas that may be more susceptible to price drops.
This article was contributed on Aug 20, 2023