According to Goldman Sachs, the housing market in Phoenix could crash to 2008 levels.
Phoenix housing market: In a note obtained by the New York Post, Goldman Sachs predicted it PhoenixSan Jose, San Diego and Austin, Texas will experience more than 25% declines.
Goldman Sachs predicts Phoenix home prices will fall to record lows, matching the 2008 crash.
For nearly a decade, Phoenix has been at the forefront of a booming housing market. But nothing lasts forever, and the rapid growth may be slowing down.
Goldman Sachs predicted a drop of more than 25% PhoenixSan Diego, San Jose, California and Austin, Texas in a note to customers obtained by the New York Post earlier this month.
According to the Post, a 25% drop in home prices would be comparable to the 2008 recession. However, Elliott D. Pollack & Company senior economist Danny Court tells 12News that the two eras are not comparable.
You may also like to read the biography of Goldman Sachs
There is no excess housing supply, investors are not buying empty homes, and the market is not flooded with risky mortgages and foreclosures, all of which contributed to the 2008 housing crash.
“We’re at an all-time low for foreclosure activity going back 20 years,” Court said.
Court generally agrees with Goldman Sachs’ prediction of a 25% decline in home prices, although he believes the decline began last May at the peak of home values and will continue to fall 10%-15% this year.
“We could see a 25% drop from top to bottom,” Court said. “We’ve had such a high price increase for the last three to five years that we wouldn’t be back to 2021 prices until 2021. This is not a housing crash and it’s not comparable to 2008-2009.”
According to the Court, a strong labor market is another strong economic indicator.
“When people have a job, they can pay their mortgage,” he explained.
According to Redfin, the average sales price in Arizona in 2022 was $411,000.
Many buyers have been looking for alternatives to these prices, especially as the number of rental properties in some neighborhoods has increased by nearly 90%.
Phoenix was at the forefront of a skyrocketing housing market, but if Goldman Sachs‘ predictions come true, it may be ahead of autumn.