Home prices set for double-digit plunge in major Western US cities: Goldman Sachs

Source: New York Post — 

Four US cities that experienced housing booms during the COVID-19 pandemic are set for major declines in home prices by the end of next year, according to Goldman Sachs analysts.

The pandemic boomtowns of Austin, Seattle, Phoenix and San Francisco will all experience double-digit price declines as an increase of available homes surpasses demand, the bank’s analysts said in a note to clients last Thursday obtained by Insider.

The largest decrease in home prices will occur in Austin, where values are projected to slump 19% by late 2024 compared to late 2022, according to the note. Prices are expected to sink in Phoenix by 16%, San Francisco by 15% and Seattle by 12%.

“Rather than being indicative of things to come across the country, we view the nascent oversupply in Pacific Coast and Southwest markets as reflecting local challenges, particularly very poor levels of affordability, pandemic-related distortions, and (in certain markets) a high concentration of employment in the technology industry,” the Goldman Sachs analysts said in the note, according to Insider.

As the analysts noted, Seattle and San Francisco are home to major tech firms — many of which, including giants such as Amazon, Google and Twitter, have conducted layoffs in response to worsening economic conditions.