Markets

These Oversupplied Metros Could See Major Price Drops by Late 2024

Once red-hot housing markets such as Austin, TX, are poised to see substantial home price reductions in the next two years as supply overwhelms demand
March 1, 2023

As elevated housing costs continue to chip away at homebuyer demand nationwide, a few oversupplied metros are at risk of major price reductions in the year ahead, Insider reports. Formerly red-hot housing markets such as Seattle, Phoenix, San Francisco, and Austin, Texas, have seen substantial increases in inventory, and as a result, each metro is expected to see a double-digit price correction by late 2024.

Housing affordability remains at historic lows due to higher interest rates, but nationwide, experts are anticipating just a 6.1% decline in home prices for 2023.

By late 2024, home prices will decline by 19% in Austin, 12% in Seattle, 16% in Phoenix and 15% in San Francisco compared to late-2022 levels, the bank said in a note on Thursday.

While the housing market overall remains tight, those four cities have seen big increases in inventory, and supply is overwhelming demand, analysts said.

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