What’s up everyone

There is only one bull that remains standing in the housing market forecast- and that is Zillow.

Zillow still thinks that U.S. prices will rise another 7.8% between July 2022 and June 2023.  

Mind you, This is the fourth consecutive month Zillow has issued a downward revision.

Last month, Zillow had forecasted 9.7% price appreciation for the upcoming 12 months.

Corelogic’s updated forecast just came out as well as other industry insiders and some of them have very different opinions.

We’ll look at an article posted this week on Business insider that may shock you.

So, lets take a deeper look into why Zillow is still so bullish and what the other industry insiders are saying. 

Lets just dive right in

First lets look at the latest from Corelogic posted August 2 with their forecast for June 2022-June 2023.  

For the June 2022 stats: Home prices nationwide, including distressed sales, increased year over year by 18.3% in June 2022 compared with June 2021. On a month-over-month basis, home prices increased by 0.6% in June 2022 compared with May 2022.

And the National forecast: The CoreLogic HPI Forecast indicates that home prices will increase on a month-over-month basis by 0.6% from June 2022 to July 2022 and on a year-over-year basis by 4.3% from June 2022 to June 2023.

So they have downgraded their forecast once again which we expected. Last month Corelogic reported that home prices will increase on a month-over-month basis by 1% from May 2022 to June 2022 and on a year-over-year basis by 5% from May 2022 to May 2023.

So they went from 5% to 4.3%. They still have houses appreciating over the next 12 months unlike some of the others.

Jose Torres the senior economist at Interactive Brokers, has a very different opinion.  

He recently told Business insider that within the next few years, housing prices could drop up to 25 percent, and that they will begin to decline in early 2023, which could see double-digit drops in prices.

“At this point, housing is unreachable when considering household incomes and individual incomes,” Torres told Insider. “The percentage of the average monthly payment to household incomes and individual incomes is at record highs — similar to levels that we saw during the 2008 financial crisis.”

Torres said he believes this has created “a perfect storm” in the real-estate market that will lead to a severe pullback in home prices.

“We’re going to see something very similar to what we saw during the Great Financial Crisis” in terms of price declines, he said.

So we have very different opinions on the immediate future of the housing market. Where do you land? Do you see a severe crash coming like 2008 or more of an ongoing correction until inflation is more under control?

Lets take a closer look and see How regional house prices are expected to shift over the coming year, according to Zillow and CoreLogic.

First lets look at Zillows regional forecast in conjunction with Fortune’s article by Lance Lambert. 

Take a look at this map provided by Lance Lambert of Fortune using Zillow as the source. 

How regional house prices are expected to shift over the coming year, according to Zillow

Expected shift between July 2022 and June 2023

Among the 911 regional housing markets that Zillow economists analyzed, 906 are predicted to see rising house prices between July 2022 and June 2023. 

Zillow only expects five markets to experience year-over-year declines. The biggest forecasted decline being 6.4% in Greenville, Miss.

Over the coming year, Zillow predicts that 741 markets will see house price growth of 5% or greater. 

While 136 markets are forecasted to see year-over-year house price growth of 10% or greater. 

That includes markets like Athens, Ga. (10.3% forecasted growth); Durango, Colo. (10.3%); Grenada, Miss. (10.3%); Fort Myers, Fla.(10.2%); and Morristown, Tenn. (10.2%).

It looks like they are predicting the DC area will have a 4% price increase over the coming year. 

What do you think? Is your area on the map?  Do you agree with Zillow. 

Side note: Some of this data may have a 30-60 day lag time if the sales were in June and July and will close in August and September. 

This is very different from Moody’s analytics forecast for the next 2 years that we spoke about in last weeks video. 

Just to refresh your memory or in case you missed it, Mark Zandi of Moodys Analytics believes price appreciation will head to zero nationally in the coming year. 

When lookin at the map provided by Lambert and Moody’s analytics on the regional level, Moody’s Analytics foresees around half the nation experiencing falling home prices.

Among the nation’s 414 largest housing markets, Moody’s Analytics predicts that 204 regional housing markets will see rising home prices over the next two years.

 Meanwhile, Moody’s Analytics expects 210 markets to see falling home prices. The steepest declines, Zandi says, will come in housing markets like Boise and Austin that are significantly “overvalued” relative to underlying economic fundamentals. 

If a recession comes, those markets could see prices fall by as much as 15% to 20%.

They have the DC area as -1.33% over the next 2 years. 

Switching over to Corelogics latest data.

They start with the present data showing nationally home prices increased by 18.3% year overhear in June. 

The states with the highest increases year over year were

And as far as cities, Phoenix tops the list of home appreciation with 26.1% year over year. You can see here the other cities with the most increases in values. 

Does that mean they will fall the most? Let’s look at Corelogics Top Markets at Risk of Home Price Decline.

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Bremerton-Silverdale, WA is at a very high risk (70%-plus probability) of a decline in home prices over the next 12 months. 

Bellingham, WA; Boise City, ID;Crestview-Fort Walton Beach-Destin, FL and Olympia-Tumwater, WA are also at very high risk for price declines. 

Are any of you located in any of these areas? If so, please let us know your opinion of all of this data. Do you feel they are right? 

So, to sum it up, we can all agree that no one agrees on the future of the housing market. 

As I always say, real estate is very localized so what is happening in my area isn’t gong to be the same in yours. That being said, we can’t deny the whole county is in the middle of a pretty dramatic correction considering where we were only a few months ago.

So Whatever side of the argument you’re on, there is something we can all agree on: The housing market is slowing down. That could mean a continuous correction until it stabilizes or a possible crash if Americans can’t afford their homes due to economic conditions.

Comment below and lets start a discussion. Please keep it civilized. We all have opinions and I think they are all important to a discussion but I won’t stand for crass insults or rude behavior. 

I hoe you get some value from these housing market updates. It’s a lot of work but I think its important to give you the most updated info from the industry insiders. 

If you are getting value and want to show our channel some support, like this video, comment below and subscribe to our channel. IT helps us with the YouTube algorithm and motivates us to make more videos. 

Until next time. Bye 

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