All eyes are glued to the unfolding future as predictions for 2023 continue to show a large economic decline in major cities. With this news, the country should begin preparing for the worst. In 2022, housing prices weren’t ideal. Will that trend continue to get worse in this new year or have we left the worst of it in 2022? Let’s find out.
Goldman Sachs recently issued a warning that the current economic conditions may greatly affect home values in four major markets across the U.S.: San Jose, San Diego, Austin, and Phoenix. These predictions are said to be some of the worst in modern history and could rise to levels of recession similar to what was felt during the crash of 2008. This news should be of concern to homeowners in these areas, who fear significant losses if their homes fall short of Goldman’s forecasted value. While we cannot be sure exactly how much these homes will devalue or if that might actual come true, it is important for residents in these cities to stay informed in this ever-changing market as they make decisions concerning their investments.
Daily wire reports, despite worsening economic conditions, Goldman Sachs recently informed its clients that home values will plummet in four major markets across the country.
According to the investment bank, San Jose, California; San Diego, California; Austin, Texas; and Phoenix, Arizona, may experience a crash comparable to 2008.
Fox 10 Phoenix reported the news and spoke to a housing market expert in Phoenix who had a different perspective.
According to Fox News, those cities could experience market crashes of more than 25 percent.
Goldman Sachs said in a report, “Our 2023 revised forecast primarily reflects our view that interest rates will remain at elevated levels longer than currently priced in, with 10-year Treasury yields peaking in 2023 Quarter 3. As a result, we are raising our forecast for the 30-year fixed mortgage rate to 6.5% for year-end 2023.”
Similarly, Goldman Sachs predicts that home prices in New York City and Chicago will fall a bit. Small gains were expected in Baltimore and Miami.
A report adds, “Assuming the economy remains on the path to a soft landing, avoiding a recession, and the 30-year fixed mortgage rate falls back to 6.15% by year-end 2024, home price growth will likely shift from depreciation to below-trend appreciation in 2024.”
With economic predictions for 2023 looking a bit grim, Goldman Sachs remains skeptical of the housing market. This means that home owners must remain vigilant and hope that Goldman Sachs’ pessimism will be proven wrong. After two years of having one political party dictate the overall economy, individuals everywhere are crossing their fingers that 2023 will begin to show signs of progress with a conservative set of eyes in congress. Although it’s important to be realistic, two words come to mind: cautiously optimistic. At least so people can be mentally prepared for the worst and best case scenario instead listening to experts give their opinions.
Let’s continue this conversation, in the comments below.
