Home inventories remain at record lows to start the year, while prices have remained well above pre-COVID-19 pandemic norms. And in some markets, affordability has plummeted for would-be homebuyers due to rising interest rates.
Experts warn that the rise in home values during the recovery period that followed the Great Recession was unsustainably underpinned by the low interest rates of the pandemic era and, therefore, the bubble must collapse. At least one bit’.
Initially, forecasts characterized the projected “correction” in the housing market as an overall drop of as much as 10% in the value of the average American home by the end of 2023. Real estate companies have continued to issue pessimistic forecasts, but the country is a long way from from being a consensus on how dramatic the fix will be.
Existing home sales have plummeted since early 2022, but the consistently tight supply of existing and new homes has kept prices more or less unchanged or simply growing more slowly than in 2021.
Pressures like these have led institutions like Goldman Sachs to lower their forecasts of how much prices could fall. The bank issued a memo in January 2023 saying it anticipated a 25% decline in four major metropolitan areas, including Phoenix, Austin, San Jose and San Diego. That would put the pain of this housing correction on par with the 2008 crash for some hot urban housing markets.
Nashville MLS used the Q3 2022 ATTOM rankings to find the 10 counties least at risk of a housing decline in 2023. ATTOM’s ranking criteria included percentage of homes at risk of foreclosure, percentage of local wages needed to cover average home ownership spending, unemployment rates, and if mortgage balances exceed estimates of property value, a situation known as “underwater.” In total, there were 581 US counties with data to consider for ranking.
Many of the lowest risk counties were in the south. Recent research from Florida Atlantic University reports that real estate markets in states including Utah, Idaho, North Carolina, Florida and Arizona have seen prices rise much faster than historical trends, suggesting they should and could be at risk of downward corrections. more marked than the prices.
Tennessee had three counties in the top 10 that are among the least vulnerable in this ranking, the most of any state. And four of the 52 least risky counties were within the Nashville metropolitan area. Unemployment rates in every county that made the least vulnerable list were also lower than the national average of 3.7 percent in August 2022.
Read on to see if your county is among those where homes are more likely to hold value than elsewhere in the country.
