Home sales are falling at a steady pace across the U.S. as inventory levels continue to rise in a housing slowdown that has some experts sounding the alarms of an imminent recession. As the Fed continues to put upward pressure on mortgage rates to slow runaway inflation, home price growth is decelerating after years of consistent gains, but some popular markets are contracting significantly faster than other parts of the country, Fortune reports.
In its most recent July 2022 housing market analysis, CoreLogic found that 98 markets have a greater than 50% chance of seeing local home prices decline over the next 12 months, including Boise, Philadelphia, and San Francisco. Though CoreLogic’s assessment may seem promising for priced-out buyers, U.S. home prices are expected to rise another 5% nationally between May 2022 and May 2023.
In some of these at-risk markets, including San Francisco, that home price "top" might have already been blown-off. Prices are already falling in the Bay Area on a month-over-month basis. It remains to be seen if those price drops will last long enough for the market to actually get a year-over-year negative reading in 2023.
"We've definitely seen a drop in sale prices over the last two months due to the double whammy of the Nasdaq correction and rise in interest rates," Kevin Chiao, a broker in the Bay Area, tells Fortune. "I initially thought the Bay Area market wouldn't see much price decline due to lack of inventory, but it seems I may have been wrong."