To Recap…
Millions are facing an affordability crisis
Mortgage rates are skyrocketing while home price keep breaking records.
The median home costs $425K, while the median American can only afford $373K.
This affordability gap of $52K is the highest on record.
Our detailed explanation is posted here.
So, which cities will crash first?
Most areas will see a deceleration in home prices - not a crash.
Inventory is really low and will take many years to improve.
Our Current Projection: National home prices will grow by 8%-12% in 2022. Then, 4%-6% annually for the next 2 years.
But some cities will crash
Cities that face corrections have, in increasing order of importance:
Slow & slowing housing markets
Low & decelerating demand
High & accelerating supply
1. Syracuse & Pittsburgh Have The Slowest Housing Markets
Home prices are already declining YoY in Pittsburgh, while homes in Syracuse take ages to find a buyer.
With mortgage rates continuing to rise, these markets might slow down even further.
2. Demand Is Tanking In LA, SF & NYC
LA, SF & NYC are among the least affordable markets in the country.
They are also losing residents. 361K people migrated out of NYC last year, while LA lost nearly 200K residents!
Unaffordable Homes + Population Loss = Disappearing Demand.
3. Developers Are Building Like Crazy In Boise & Lakeland
Lakeland in Florida has only 0.2% of the US population, but is building 1% of the total homes. Meanwhile, housing supply in Boise has doubled YoY!
Oversupplied cities crashed hardest in 2008. Will history repeat itself in 2023?
So, Where Will Home Prices Crash First?
Florida, Texas, Utah, Boise Are Riskiest
Of the top 10 riskiest cities, 4 are located in Florida, 3 in Texas, 2 in Utah, and 1 in Idaho.
They all have reducing demand & rapidly increasing supply.
The Northeast , California, & Washington Are Safe, For Now.
They all have slowing demand BUT rapidly slowing supply.
Which Cities Are Safest Over The Long Term?
Read more in our report with Fortune
Also follow Lance Lambert on Twitter, he’s similarly obsessed with the housing market.
Meanwhile…our investments are yielding 20% IRR
Despite deep corrections in stocks & crypto
Despite rising interest rates & sky-high inflation
Despite rising rumors of a hard landing
Send me a note if you’d like to invest with us!
More Insights On US Real Estate…
Note: All statements above are subject to revisions based on changing assumptions and market conditions. Figures could be rounded by +-10% for improving readability. Hoom Inc is neither a tax advisor nor a financial advisor and none of our statements should be interpreted as tax or financial advice.
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