The value of houses on the market in the United States are now at record highs, however, a new report published by the Daily Mail says that could be about to change. A housing price crash is a risk across more than 50 counties in the country, say researches from Attom, a property data firm. For those who are looking to purchase their first homes, this is excellent news as homes will be super affordable. However, if you’re the one selling properties, it’s a blow to the bank account.
California, New Jersey, and Illinois are three states that stand out as those at highest risk for a crash. These states have the most counties where prices could take a massive tumble down the proverbial abyss, based on a number of key indicators.
These include high numbers of underwater mortgages and foreclosures plus higher unemployment. Attom looked at 600 counties across the US that had enough data to analyze. ‘The housing market boom continues to gain momentum. However, some markets show signs of potential instability,’ Attom chief executive Rob Barber said. ‘With the housing market still facing challenges, it’s crucial to closely monitor regions where key indicators suggest a higher likelihood of issues,’ he said of the report.
The New York City metropolitan area also had a big cluster of markets at risk. The metropolitan areas around New York and Chicago, as well as broad stretches of California, had 24 of the 51 counties considered most vulnerable. The most at-risk counties included three in New York City (Kings County, which covers Brooklyn, Richmond County, which covers Staten Island, and Bronx County) and four in the New York City suburbs (Essex, Passaic, Sussex and Union counties, all in New Jersey). There are four counties in Illinois – Cook, Kendall, McHenry and Will – and Lake County in Indiana.
Another 12 were in California: Butte County (Chico), Humboldt County (Eureka), Solano County (outside Sacramento) and Shasta County (Redding) in the northern part of the state. Plus in central California there is Kern County (Bakersfield), Kings County (outside Fresno), Madera County (outside Fresno), Merced County, San Joaquin County (Stockton) and Stanislaus County (Modesto) in central California.
A couple of other counties in the state, Riverside and San Bernardino, are located in the southern part of the state.
Several housing markets located in what is known as the Sun Belt that boomed during the COVID pandemic have already begun to face price corrections. A major increase in the number of homes put on the market in places such as Fort Worth, Texas and Tampa, Florida has taken place over the course of recent months. The biggest decrease in home prices has been seen in Austin, Texas and Cape Coral, Florida compared to the cost of buying a home a year ago, the American Enterprise Institute’s Housing Center said.
“Other Florida hotspots – such as Lakeland, Tampa and Crestview – are also experiencing a real estate downturn as residents attempt to sell-off their condos. Condo owners are slashing prices by up to 40 percent as they strive to dodge massive incoming repair costs.
Some units have had almost half a million wiped off their asking price as safety fears trigger a wave of sell-offs in what realtors have described as the worst real estate crisis in decades,” the Daily Mail reported.
Those who are in the market for a house might want to take a gander at what’s going on in Illinois where things are predicted to soften in the near future. New data has revealed that the current average down payment that Americans are paying is a shocking $67,500. Yikes. I guess these folks want you to sell your soul or at least a kidney in order to afford this kind of down payment. Good grief.
High mortgage rates translates into homeowners will have more incentive to slap down a bigger down payment up front to help ease the pain and suffering of a massive monthly mortgage.
“This, alongside rising house prices, means down payments over $400,000 are now the norm in some American cities. Down payments have also increased in percentage terms, the analysis from Redfin found. The typical homebuyer put down 18.6 percent of the purchase price of a home in June, which is the highest level in over a decade and up from 15 percent last year,” The Daily Mail concluded.
"*" indicates required fields