Home prices in “Zoom towns,” cities that boomed during the pandemic, are poised to plummet the most as the residential real estate market loses steam, industry experts said.
Topping the list is Boise, Idaho, where residential housing has “reversed completely” this year, according to Rick Palacios, director of research at John Burns Real Estate Consulting.
“It is the single market that we anticipate actually getting to price declines in 2022,” Palacios told MoneyWise.
Palacios pointed to four other cities that became hot spots during the pandemic because of their lower cost of living and quality of life which will get slammed as mortgage interest rates climb and companies clamp down on remote work.
They are Austin, Texas; Nashville; Phoenix; and Sacramento, Calif.
Home values in Phoenix shot up 25% over the past year. Getty Images
Home prices in Nashville are up 56% since February 2020. Getty Images
In the first quarter of this year, the number of home purchases by investors was down 21% in Sacramento. Getty Images/iStockphoto“These are some of the markets where we were anticipating the steepest price declines in 2023,” Palacios, whose firm tracks data for developers, realtors and investors, told MoneyWise.
Boise became one of the least affordable cities in which to purchase a home during the pandemic with prices soaring 72% above what a middle-income family can afford, according to the report.
In July, nearly 70% of sellers in Boise had to cut their prices, according to the report, which cited data from real estate brokerage firm, Redfin.
Home values in Phoenix shot up 25% over the past year, according to Zillow’s value index, while prices in Austin and Nashville are up 75% and 56%, respectively, since February 2020.
But this year, the trend is downwards, real estate experts say.
In the first quarter of this year, the number of home purchases by investors in Nashville was down 17% and down 21% in Sacramento, according to the report.
The number of homes for sale in Austin – which became a magnet for tech workers from Silicon Valley, Seattle and Los Angeles – rose by 27% in June, compared with last year.
The share of homes for sale nationwide that reduced their asking price jumped 19.4% in August, according to a monthly report last week by Realtor.com, as The Post reported. That number was up from 11% in the same month one year earlier.
