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Some Housing Markets Have Started To Fall

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Corelogic’s real estate data are among the most carefully watched by experts. Each month, it looks at the national, state, and local markets. In its most recent report, it forecast prices from May 2022 to May 2023. The local market universe it covers includes 392 major metros.

The Corelogic report shows that several housing markets are already in trouble. These are measured by a 70% probability of decline with a confidence score of 50% to 70%. Four of the are in Washington state. They include Bremerton, Bellingham, Tacoma, and Olympia. The fifth market is Boise, ID.

The markets share another metric. Home prices in these cities have soared. Boise is often mentioned as the market where home prices have risen the most in the last two years.

If the 2008-2009 recession is any indication, city home price decreases spread from market to market. The Great Recession was marked by a collapse of subprime mortgages. That will not happen again. Most mortgages taken out over the last decades are much less risky.

The question is which markets carry the most risk of housing prices drops. Usually, these are the ones where prices rose the fastest and the most recently. The S&P Case Shiller home price index indicated home prices in most recent months were up over 20% year over year. Among the 20 largest markets it analyzes, home prices in Phoenix, Tampa, and Miami have risen much faster.

The storm coming to the housing market is not just a surge of price decreases. It involves a surge in mortgage rates as well. A year ago, the rate on many 30-year fixed home loans was under 3%. That figure has risen to above 5%.

The foundation of home prices has already started to crumble. And, there are probably ways to forecast which cities face the greatest risk. 

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