Markets Where Home Prices May Fall

By Douglas A. McIntyre Published Nov 2, 10:30AM EDT

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Markets Where Home Prices May Fall — © picmax / iStock via Getty Images

As home prices nationwide rose 20% year over year in most months this year, it was unimaginable that there could be a downtrend. Yet, these price increases have slowed in many markets. This has raised concerns that home prices will start to fall in some parts of the nation. A new study forecasts which markets will have this trouble.
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The rise in home prices was driven primarily by low interest rates and a flight of people from large cities to smaller ones or the suburbs. People could work from home and wanted the quality of life they could get outside metros with millions of residents. Small city life also tended to be less expensive.
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Historically low mortgage rates also allowed people to buy new homes at prices they could only dream about. At one point, rates for 30-year fixed mortgages fell below 3%. Those rates have soared to nearly 7% in the past six months. Homes have become expensive, compared to early 2022. Americans have decided to stay where they are, undermining residential real estate demand.

Real estate research firm CoreLogic has released its U.S. Home Insights–September 2022 report. The researchers pointed out that home prices nationwide dropped 0.3% in July compared to June.
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The CoreLogic Market Risk Indicator (MRI) shows which markets the firm believes may have a decline in prices over the next year. It uses the yardstick of markets with a 70% chance of declining. It then adds a confidence score. The markets facing the worst problems have a 50% to 75% chance of a downward price reset.
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The markets with the largest risk of a decline were Bremerton, Wash.; Crestview, Fla.; Bellingham, Wash.; Reno, Nev.; and Boise, Idaho.

In at least one of these markets, Boise, home prices have risen by nearly 50% in many months since the start of 2021.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.