Goldman Sachs housing market crash 4 cities: Interest rates are skyrocketing, while overall affordability in the Valley is at an all-time low. Now that the property market is cooling, a big investment group is taking a dim view of Phoenix’s home market.
The New York Post got the Goldman Sachs letter first, which stated that four U.S. cities, including Phoenix, may see a “seismic” fall similar to the 2008 Great Recession in the coming year.
San Jose, CA, San Diego, CA, and Austin, TX are the other three cities mentioned. While most experts, including Goldman Sachs, think that the housing market is beginning to stabilize following pandemic-driven demand, there is still considerable uncertainty.
Arizona’s Family obtained the analysis, which predicted that house prices will decrease the highest in the West between 2023 and 2024 when many mortgage payments consume half or more of a monthly salary.
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Instead, cities such as Chicago and Philadelphia should have rises, albeit they are projected to be minor when compared to income. According to the November Consumer Price Index, prices grew 12.1% year on year.
Fortunately, the news isn’t all awful. The study includes a demand for a “gradual return of affordability” from Goldman Sachs.
According to firm experts, higher salaries for families should overcome any negative consequences of high mortgage rates on the housing market. “While rising mortgage rates weigh on affordability, we anticipate significant nominal income growth,” according to the research.
Metro Phoenix is now experiencing the greatest rate of inflation of any industrialized area.
Arizona Family met with the Arizona Association of Realtors earlier this month, who stated that sellers are presently assisting buyers in lowering those high-interest rates.
Another thing to remember is that mortgage interest is tax deductible for primary residences. Another negotiating chip is the fact that properties are remaining on the market for far longer than they did before the outbreak.
From December 2021 to December 2022, home sales in the Phoenix metro region fell by 45%.
Valley house builders are likewise seeing declines as long as they avoid premium markets. “There are really good discounts to be found with builders,” stated Tina Tamboer of Cromford Report.
“However, certain locations, such as Phoenix, Chandler, and Glendale, are in balanced markets, which are still extremely beneficial for buyers.
Then there’s the northeast, which includes Scottsdale, Fountain Hills, and Cave Creek, which are still seller’s markets. As a result, the luxury markets continue to thrive.”