With the U.S. housing market cooling down this year following mortgage rate hikes and record home appreciation, economists at Goldman Sachs expect significant price falls in 39% of metropolitan areas in the United States in 2023.
As stated by analysts in the Goldman Sachs’ Global Investment Research report this week, a correction to house prices nationwide is unlikely in 2023, however, this doesn’t mean that certain metropolitan areas will not experience significant drops.
Some of the markets where Goldman Sachs expects a significant price decline include the Western cities of Denver, Phoenix, and Los Angeles. “In recent months, 9% of active listings have cut prices per Zillow; these price cuts have been most common in metros that saw a sharp run-up through 2020 and 2021, and may be a sign of further weakness to come,” Goldman said.
In contrast, homes in east coast cities are expected to continue to appreciate going into next year, while south and southeast metros are also expected to see an upward trend due to their rising demand and relative affordability.