In America, home prices have seen double-digit increases in response to buyer demand and limited inventory, but many international cities are at greater risk for intense declines in home prices. According to the UBS Global Real Estate Bubble Index, there are seven cities facing the greatest risk for price declines of nearly 10%, says Barrons. The index did include some American cities, and though they are at a much lesser risk for price drops, the index still considers them “overvalued.” Munich, Frankfurt, and Toronto are at the greatest risk while Los Angeles, San Francisco, and New York are listed as the US cities most overvalued.
While the U.S. cities named in the report avoided the bubble risk category, the study’s authors note that their price changes trail the U.S. average, even in the wake of high housing demand supported by historically low mortgage rates.
“Inner-city demand growth has slowed down as people have moved away to cheaper and more tax-, business-, and regulatory- friendly states,” the authors wrote. “The pandemic has even further accelerated this trend, and affordability issues are also spurring the migration to the suburbs.”
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