{"id":3409,"date":"2022-08-24T03:39:19","date_gmt":"2022-08-24T03:39:19","guid":{"rendered":"https:\/\/frankbuysphilly.com\/austin-and-30-other-markets-are-at-risk-of-price-declines-did-your-market-make-the-list\/"},"modified":"2022-08-24T03:39:19","modified_gmt":"2022-08-24T03:39:19","slug":"austin-and-30-other-markets-are-at-risk-of-price-declines-did-your-market-make-the-list","status":"publish","type":"post","link":"https:\/\/frankbuysphilly.com\/austin-and-30-other-markets-are-at-risk-of-price-declines-did-your-market-make-the-list\/","title":{"rendered":"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List?"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">As rising interest rates and declining affordability have lowered housing market demand, a correction (a modest decline in housing prices) has been looming for months. On a national scale,\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.nar.realtor\/infographics\/existing-home-sales-housing-snapshot\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">housing prices are still up almost 11% year-over-year<\/span><\/a><span data-preserver-spaces=\"true\">, but other indicators point to a housing market that is starting to correct.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">In this article, I will dive into several methods for measuring housing market health, identify metrics to watch, and label specific markets that are at the highest risk of seeing price declines in the coming months.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">Market Data<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">When looking at the health of the housing market, we could examine many datasets and methodologies. For the purposes of this article, I am going to look at three datasets:\u00a0<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Year-over-year (YoY) data (what happened in July 2022 compared to July 2021)\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Month-over-month (MoM) data (what happened in July 2022 compared to June 2022)<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Inventory (how many properties are actively listed for sale at a given point in time).<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">These provide a good balance of long-term trends, short-term changes, and forward-looking data.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Year-Over-Year Data<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">In normal times, YoY data is the best way to measure growth in housing prices because one, housing data is seasonal, and two, it measures long-term trends. Housing prices follow a similar pattern every year\u2014they peak in the summer and decline over the winter\u2014meaning that comparing January\u2019s data to June\u2019s is not helpful.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144371 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 2\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM.webp 1236w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-300x194.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-1024x661.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-768x496.webp 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-300x194.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-1024x661.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-768x496.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM.png\" loading=\"lazy\" class=\"wp-image-144371 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 2\" alt=\"median home price 2014-2019\" height=\"798\" width=\"1236\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-300x194.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-1024x661.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.08.08-PM-768x496.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\"\/><\/source><\/source><\/picture><figcaption><em>Median Home Price (2014-2019)<\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">The chart above demonstrates this concept well. Clearly, housing prices were consistently trending upwards from 2014 to 2019, even though every year, housing prices fell from May to February. If we were to look at prices from May 2016 to January 2017, it would show falling prices, even though the market was trending upwards.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Again, this is why we look at YoY data, because what happened between July 2022 and July 2021 shows the long-term trends. And as mentioned above, YoY prices on a national level are still +11%. Of the top 250 markets in the United States, zero have seen YoY price declines. Not one!<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144372 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 3\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM.webp 1222w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-300x185.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-1024x630.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-768x473.webp 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM.png 1222w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-300x185.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-1024x630.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-768x473.png 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM.png\" loading=\"lazy\" class=\"wp-image-144372 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 3\" alt=\"median sales price growth\" height=\"752\" width=\"1222\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM.png 1222w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-300x185.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-1024x630.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.09.52-PM-768x473.png 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\"\/><\/source><\/source><\/picture><figcaption><em>Median Sales Price YoY Change (2012-2022) \u2013 <a href=\"https:\/\/www.redfin.com\/us-housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Having the median home price increase 11% YoY is a massive number in historical contexts but does represent a significant cooling from the absurd growth rates we saw in 2020 and 2021. For context, during the Great Recession, housing prices fell YoY for several years in a row, with prices falling more than 10% YoY in 2009.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">So, in today\u2019s market, the growth rate of housing prices in the U.S. is returning to normal, but as the chart above shows, it is still well above historical norms. And although prices are still up YoY, we can learn something from how YoY data is trending. In some of the country\u2019s hottest markets, YoY growth has fallen very fast, with Austin, Texas, leading the way.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144373 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 4\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM.webp 1222w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-300x185.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-1024x630.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-768x473.webp 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM.png 1222w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-300x185.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-1024x630.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-768x473.png 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM.png\" loading=\"lazy\" class=\"wp-image-144373 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 4\" alt=\"median sales price change austin\" height=\"752\" width=\"1222\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM.png 1222w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-300x185.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-1024x630.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.01-PM-768x473.png 768w\" sizes=\"(max-width: 1222px) 100vw, 1222px\"\/><\/source><\/source><\/picture><figcaption><em>Median Sales Price YoY Change (Austin, Texas, 2012-2022)<\/em> <em>\u2013 <a href=\"https:\/\/www.redfin.com\/city\/30818\/TX\/Austin\/housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Austin grew at about 45% YoY last summer and is now down to about 11%. It\u2019s still growing on a YoY basis, but to me, the rapid rate of deceleration represents risk to the Austin housing market. Austin is seeing its rate of growth fall faster than any other market.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Other markets that are seeing similar patterns are Seattle, Sacramento, Phoenix, San Jose, Boise, and San Diego, to name a few. Checking out the rate of change in YoY growth rates is a helpful thing you can do to better understand your market.\u00a0<\/span><\/p>\n<h3><span data-preserver-spaces=\"true\">Month-Over-Month Data<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">As I said above, during a stable housing market, I personally believe YoY data to be the most important and don\u2019t spend too much time on MoM data. But, during markets in transition, like the one we\u2019re in currently, looking at MoM data can be helpful.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">When examining the top 250 markets, the vast majority are still seeing increases, but 31 of them did see declines. San Jose, California, saw the steepest drop at -2.7%, but the average among the 31 markets in decline was modest at just -0.64% MoM. Here\u2019s a list of the 31 markets within the top 250 that saw declines:<\/span><\/p>\n<figure class=\"wp-block-table is-style-regular\">\n<table>\n<thead>\n<tr>\n<th>Market<\/th>\n<th>MoM % Change<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>San Jose, CA<\/td>\n<td>-2.70%<\/td>\n<\/tr>\n<tr>\n<td>Austin, TX<\/td>\n<td>-1.62%<\/td>\n<\/tr>\n<tr>\n<td>Reno, NV<\/td>\n<td>-1.26%<\/td>\n<\/tr>\n<tr>\n<td>San Diego, CA<\/td>\n<td>-1.23%<\/td>\n<\/tr>\n<tr>\n<td>Santa Cruz, CA<\/td>\n<td>-1.06%<\/td>\n<\/tr>\n<tr>\n<td>San Francisco, CA<\/td>\n<td>-0.93%<\/td>\n<\/tr>\n<tr>\n<td>Boulder, CO<\/td>\n<td>-0.91%<\/td>\n<\/tr>\n<tr>\n<td>Seattle, WA<\/td>\n<td>-0.90%<\/td>\n<\/tr>\n<tr>\n<td>Provo, UT<\/td>\n<td>-0.89%<\/td>\n<\/tr>\n<tr>\n<td>Salt Lake City, UT<\/td>\n<td>-0.83%<\/td>\n<\/tr>\n<tr>\n<td>Ogden, UT<\/td>\n<td>-0.81%<\/td>\n<\/tr>\n<tr>\n<td>Portland, OR<\/td>\n<td>-0.78%<\/td>\n<\/tr>\n<tr>\n<td>Denver, CO<\/td>\n<td>-0.65%<\/td>\n<\/tr>\n<tr>\n<td>Boise City, ID<\/td>\n<td>-0.61%<\/td>\n<\/tr>\n<tr>\n<td>Atlantic City, NJ<\/td>\n<td>-0.57%<\/td>\n<\/tr>\n<tr>\n<td>Ventura, CA<\/td>\n<td>-0.50%<\/td>\n<\/tr>\n<tr>\n<td>Vallejo, CA<\/td>\n<td>-0.50%<\/td>\n<\/tr>\n<tr>\n<td>Phoenix, AZ<\/td>\n<td>-0.42%<\/td>\n<\/tr>\n<tr>\n<td>Spokane, WA<\/td>\n<td>-0.35%<\/td>\n<\/tr>\n<tr>\n<td>Stockton, CA<\/td>\n<td>-0.34%<\/td>\n<\/tr>\n<tr>\n<td>Los Angeles-Long Beach-Anaheim, CA<\/td>\n<td>-0.33%<\/td>\n<\/tr>\n<tr>\n<td>Medford, OR<\/td>\n<td>-0.32%<\/td>\n<\/tr>\n<tr>\n<td>Pittsburgh, PA<\/td>\n<td>-0.30%<\/td>\n<\/tr>\n<tr>\n<td>Colorado Springs, CO<\/td>\n<td>-0.27%<\/td>\n<\/tr>\n<tr>\n<td>Visalia, CA<\/td>\n<td>-0.16%<\/td>\n<\/tr>\n<tr>\n<td>Santa Rosa, CA<\/td>\n<td>-0.13%<\/td>\n<\/tr>\n<tr>\n<td>Lincoln, NE<\/td>\n<td>-0.12%<\/td>\n<\/tr>\n<tr>\n<td>Greeley, CO<\/td>\n<td>-0.12%<\/td>\n<\/tr>\n<tr>\n<td>Sacramento, CA<\/td>\n<td>-0.09%<\/td>\n<\/tr>\n<tr>\n<td>Riverside, CA<\/td>\n<td>-0.08%<\/td>\n<\/tr>\n<tr>\n<td>Worcester, MA<\/td>\n<td>-0.06%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p><span data-preserver-spaces=\"true\">On the other hand, some markets have kept growing! For example, Miami grew 2.35% MoM. As I\u2019ve said for months, I believe the most likely scenario over the coming months is that some markets will keep growing, and some will decline. So far, that seems to be the case.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">When looking at MoM data, remember this is just a single month and thus, doesn\u2019t make it a trend. Prices do tend to peak in early summer and start to come down, and it\u2019s far too early to know if this means we\u2019ll see YoY declines in any of these markets (or more) in the coming months. This is one short-term data point that needs to be considered alongside other data.\u00a0<\/span><\/p>\n<p><em>Need an investor-friendly real estate agent for your next deal?<\/em> <em><a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" target=\"_blank\" rel=\"noreferrer noopener\">Match with an agent today<\/a>!<\/em><\/p>\n<h3><span data-preserver-spaces=\"true\">Inventory\u00a0<\/span><\/h3>\n<p><span data-preserver-spaces=\"true\">The two datasets we\u2019ve looked at so far, Year-over-Year, and Month-over-Month, are both backward-looking. Helpful, of course, but many of us want to know what might happen next. To that, we need to turn to a dataset that tends to predict the future performance of housing prices: inventory.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Inventory measures how many houses are for sale at a given time and is a good measure of the relationship between supply and demand. When inventory is low, it\u2019s a seller\u2019s market, and prices tend to rise. When inventory is high, it\u2019s a buyer\u2019s market, and prices tend to be flat or decline.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As you can see in the chart below, inventory is extremely low in a historical context. Normally, we\u2019d expect well over 1.5M listings, but we\u2019re still below 1M.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144374 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 5\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM.webp 1236w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-300x183.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-1024x623.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-768x467.webp 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM.png\" loading=\"lazy\" class=\"wp-image-144374 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 5\" alt=\"inventory national\" height=\"752\" width=\"1236\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.22-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\"\/><\/source><\/source><\/picture><figcaption><em>All Homes for Sale (2012-2022) \u2013 <a href=\"https:\/\/www.redfin.com\/us-housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">This is important because, as I\u2019ve written about extensively before, if housing prices are going to come down, inventory needs to at least approach historical levels. Clearly, from this chart, that is not happening on a national level yet. But the trend seems to be heading in that direction.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Check out this chart that shows inventory growth YoY. For most of the pandemic, inventory was falling consistently, but now we\u2019re seeing it rise rapidly on a year-over-year basis.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144375 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 6\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM.webp 1236w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-300x183.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-1024x623.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-768x467.webp 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM.png\" loading=\"lazy\" class=\"wp-image-144375 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 6\" alt=\"all homes for sale change\" height=\"752\" width=\"1236\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.30-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\"\/><\/source><\/source><\/picture><figcaption><em>All Homes for Sale YoY Change (2012-2022) \u2013 <a href=\"https:\/\/www.redfin.com\/us-housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">Again, we\u2019re still far from normal, but inventory is trending upward. This is a key metric to watch to understand the direction of the housing market in the coming months, on both a national and regional level.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Notably, some markets are seeing inventory levels recover to pre-pandemic levels. This indicates that those markets are at a high risk of seeing YoY price declines (which again, we haven\u2019t yet seen in any markets) in the coming months or years.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Recently, San Francisco became the first market to officially return to pre-pandemic levels. San Jose is right behind and just 1% below pre-pandemic levels, with Las Vegas, Phoenix, and Austin, heading that way as well. Below you can see an example of Phoenix, Arizona.\u00a0<\/span><\/p>\n<figure class=\"wp-block-image size-full\"><picture class=\"wp-image-144376 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 7\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM.webp 1236w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-300x183.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-1024x623.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-768x467.webp 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM.png\" loading=\"lazy\" class=\"wp-image-144376 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 7\" alt=\"all homes for sale phoenix\" height=\"752\" width=\"1236\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM.png 1236w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-300x183.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-1024x623.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Screen-Shot-2022-08-23-at-12.10.38-PM-768x467.png 768w\" sizes=\"(max-width: 1236px) 100vw, 1236px\"\/><\/source><\/source><\/picture><figcaption><em>All Homes for Sale (Phoenix, Arizona, 2012-2022) \u2013 <a href=\"https:\/\/www.redfin.com\/city\/14240\/AZ\/Phoenix\/housing-market\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n<p><span data-preserver-spaces=\"true\">To me, if you want to know what will happen in your housing market in the coming months, check out inventory and days on market. If they start approaching pre-pandemic levels, the risk of price declines on a YoY basis rises significantly.\u00a0<\/span><\/p>\n<h2><span data-preserver-spaces=\"true\">What This All Means<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Of course, we don\u2019t know which markets will decline, but hopefully the above data helps you understand what is happening. To provide more context, we can look at forecasts created by <a href=\"https:\/\/www.moodysanalytics.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Moody\u2019s Analytics<\/a>, which predict price growth between now and the end of 2023.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">According to Moody\u2019s, three cities in Florida are poised for the greatest declines: The Villages, Punta Gorda, and Cape Coral. Of those, Moody\u2019s predicts The Villages to decline by 13%. That\u2019s a big number! But remember, that\u2019s for the riskiest city. Remember, in the Great Recession, prices fell 20% nationally!<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Moody\u2019s also predicts relatively large drops in Reno (-8%), Austin (-7%), San Diego (-6.5%), and Boise (-6.2%).\u00a0\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">On the other hand, Moody\u2019s forecast suggests that some cities will grow. On top of that list is Albany, Georgia (+10%), Casper, Wyoming (+8%), New Bern, North Carolina (+7.6%), Augusta, Georgia (+7.2%), and Hartford, Connecticut (+7%).\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">When I look at all this data in aggregate, I believe the main takeaways to be:<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">I still believe the most likely scenario is that some markets decline in the coming year or so, while others continue to grow, just more modestly than over the last few years.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Even though some markets are showing weakness, I still don\u2019t believe a \u201ccrash\u201d is likely, and on a national level, price declines of over 10% are not looking likely.<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Markets that are at the greatest risk seem to be:<\/span>\n<ul>\n<li class=\"ql-indent-1\"><span data-preserver-spaces=\"true\">On the western half of the country<\/span><\/li>\n<li class=\"ql-indent-1\"><span data-preserver-spaces=\"true\">Saw massive appreciation over the last two years<\/span><\/li>\n<li class=\"ql-indent-1\"><span data-preserver-spaces=\"true\">Have increasing inventory and days on market\u00a0<\/span><\/li>\n<li class=\"ql-indent-1\"><span data-preserver-spaces=\"true\">Were big migration hot spots during the pandemic<\/span><\/li>\n<li class=\"ql-indent-1\"><span data-preserver-spaces=\"true\">Have the lowest affordability.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">The markets that continue to show up and, to me, carry the greatest risks, are:\u00a0<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Austin, Texas<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Boise, Idaho<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Phoenix, Arizona<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Las Vegas, Nevada<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Reno, Nevada<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Fort Myers, Florida<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Denver, Colorado<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Salt Lake City\/Provo, Utah<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Spokane and Seattle, Washington<\/span><\/li>\n<\/ul>\n<p><iframe title=\"Housing Markets at Risk of Price Declines (July 2022 Data)\" aria-label=\"Locator maps\" id=\"datawrapper-chart-S1iWl\" src=\"https:\/\/datawrapper.dwcdn.net\/S1iWl\/1\/\" scrolling=\"no\" frameborder=\"0\" style=\"width: 0; min-width: 100% !important; border: none;\" height=\"546\"><\/iframe><\/p>\n<p><span data-preserver-spaces=\"true\">On the other hand, cities that continue to show strength are:\u00a0<\/span><\/p>\n<ul>\n<li><span data-preserver-spaces=\"true\">Hartford, Connecticut<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Baton Rouge, Louisiana<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Virginia Beach, Virginia\u00a0\u00a0<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Chicago, Illinois<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Albany, New York<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Honolulu, Hawaii<\/span><\/li>\n<li><span data-preserver-spaces=\"true\">Philadelphia, Pennsylvania<\/span><\/li>\n<\/ul>\n<p><span data-preserver-spaces=\"true\">So, as you navigate the transitioning market, keep these things in mind. You\u2019re probably going to see a lot of sensationalist headlines in the coming months, but you should keep track of this data for yourself. You can do so on various websites like Redfin and Realtor.com, and of course, I\u2019ll keep publishing my research and articles like this on the BiggerPockets blog regularly.\u00a0<\/span><\/p>\n<div class=\"wp-container-1 wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\">\n<div class=\"wp-block-group__inner-container\">\n<h3 class=\"has-text-align-left mt-0\"><strong>On The Market is presented by Fundrise<\/strong><\/h3>\n<figure class=\"wp-block-image size-large is-resized\"><picture class=\"wp-image-142373 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 8\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.webp 1024w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.webp 300w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.webp 768w,https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.webp 1380w\" sizes=\"(max-width: 256px) 100vw, 256px\" type=\"image\/webp\"><source srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"(max-width: 256px) 100vw, 256px\" type=\"image\/png\"><img decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png\" loading=\"lazy\" class=\"wp-image-142373 sp-no-webp\" title=\"Austin and 30 Other Markets Are At Risk of Price Declines. Did Your Market Make the List? 8\" alt=\"Fundrise logo horizontal fullcolor black\" height=\"63\" width=\"256\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-1024x252.png 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-300x74.png 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black-768x189.png 768w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Fundrise-logo-horizontal-fullcolor-black.png 1380w\" sizes=\"(max-width: 256px) 100vw, 256px\"\/><\/source><\/source><\/picture><\/figure>\n<p class=\"mb-0\" style=\"font-size:16px\"><strong>Fundrise is revolutionizing how you invest in real estate.<\/strong><\/p>\n<p class=\"mt-0 has-slate-600-color has-text-color\" style=\"font-size:16px\">With direct-access to high-quality real estate investments, Fundrise allows you to build, manage, and grow a portfolio at the touch of a button. Combining innovation with expertise, Fundrise maximizes your long-term return potential and has quickly become America\u2019s largest direct-to-investor real estate investing platform.<\/p>\n<p><a href=\"https:\/\/t.sidekickopen84.com\/s3t\/c\/5\/f18dQhb0S7kF8cpngfW16gy-_59hl3kW7_k2841CX6NGN35Qwt3rN_mgW56Jw3w1HcgXpf197v5Y04?te=W3R5hFj26QkH2W4hJTY63T3pkxW3Fbt5S3Cdl5cf49M_4s04&amp;si=8000000019411002&amp;pi=6988e0ed-1aea-4af5-9769-8a0de4675eeb\" the=\"\" market=\"\" blog=\"\" sponsor=\"\" click=\"\" referrer:=\"\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn more about Fundrise<\/a>\n<\/div>\n<\/div>\n<p><em><span data-preserver-spaces=\"true\">A big thank you to\u00a0Pooja Jindal\u00a0for her help researching this article!\u00a0<\/span><\/em><\/p>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/markets-are-at-risk-of-price-declines\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article As rising interest rates and declining affordability have lowered housing market demand, a correction (a modest decline in housing prices) has been looming for months. On a national scale,\u00a0housing prices are still up almost 11% year-over-year, but other indicators point to a housing market that is starting to correct.\u00a0 In this article, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3410,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33,1],"tags":[],"_links":{"self":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/3409"}],"collection":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/comments?post=3409"}],"version-history":[{"count":0,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/posts\/3409\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media\/3410"}],"wp:attachment":[{"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/media?parent=3409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/categories?post=3409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/frankbuysphilly.com\/wp-json\/wp\/v2\/tags?post=3409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}