4 cities will suffer a 2008 crash in home values

Home prices in San Jose (California), Austin (Texas), Phoenix (Arizona) and San Diego (California) could register a 25% decline

As interest rates continue to skyrocket, home prices across the country have continued to plummet — and Goldman Sachs says the declines will only worsen and extend through 2023.

In a note to clients earlier this month, Goldman Sachs forecasted that four American cities in particular should gear up for a seismic decline compared to that of the 2008 housing crash. San Jose, California; Austin, Texas; Phoenix, Arizona; and San Diego, California will likely see boom and bust declines of more than 25%.

Such declines would rival those seen around 15 years ago during the Great Recession. Home prices across the United States fell around 27%, according to the S&P CoreLogic Case-Shiller index.


Housing Markets Certainly Face Further Drop of 10%

Why US home prices will fall another 10 percent, according to Harvard economist Kenneth Rogoff 

Pain across the US housing market that began last year is likely just getting started if interest rates remain high, star economist Ken Rogoff warned on Tuesday. Rogoff, a professor at Harvard University and former top economist at the International Monetary Fund, said home prices in both the US market aboard will fall “certainly another 10%” over the “couple of years.”

The economist cited the restrictive policy stances taken by the Federal Reserve and other central banks, which have caused a spike in mortgage rates and cooled demand among buyers.

“If, as I think, interest rates are going to stay high for some time to come, I think there’s still a lot of downward adjustments in the housing markets globally, not just in the United States,” Rogoff told Bloomberg Television during an appearance at the World Economic Forum in Davos, Switzerland.

The Federal Reserve is expected to implement more interest rate hikes early this year after a string of seven straight supercharged interests in 2022. Fed Chair Jerome Powell has signaled that rates will rise and then hover in restrictive territory until policymakers have clear evidence that inflation has cooled.


We’re in the second biggest home price correction of the post-WWII era

The U.S. housing market flip from inflation mode to deflation mode

For 124 consecutive months, spanning the bottom of the previous bust in February 2012 to the top of the Pandemic Housing Boom in June 2022, the seasonally adjusted Case-Shiller National Home Price Index reported positive home price growth. Now we’re in a new streak: Four consecutive months of U.S. home price declines.

On Tuesday, we learned that U.S. home prices as measured by the Case-Shiller National Home Price Index fell 0.3% in October. In total, U.S. home prices are down 2.4% since peaking in June. On one hand, a 2.4% decline in U.S. home prices sounds like a drop in the bucket. On the other hand, it’s already big enough to count as the the second-biggest home price correction of the post–World War II era. (It’s just above the 2.2% drop between May 1990 and April 1991, however, far below the 26% peak-to-trough decline that occurred between 2007 and 2012.)