home marketinvestmentmiami real estateUS marketwall street April 11, 2023

Miami named 1 of 2 U.S. markets appreciating in 2023


Miami skyline

Yahoo published an article based on the Goldman Sachs paper, “Getting worse before getting better.”

Miami named 1 of 2 U.S. markets appreciating in 2023

Here are the takeaways:

  1. The Fed’s inflation fight has caused the second biggest home price correction of the post-WWII era, resulting in a 2.4% drop in U.S. home prices between June and October 2022.
  2. The ongoing home price correction may continue through 2023. 
  3. Goldman Sachs forecasts a national home price correction of 10% from June 2022 to the end of 2023.
  4. Some regional markets will experience a decline of over 25%.
  5. A 10% peak-to-through decline in U.S. home prices shouldn’t do too much financial damage nationally.
  6. Overheated housing markets in the Southwest and Pacific coast may grapple with higher delinquencies for mortgages originated in 2022 or late 2021.
  7. Expect significant markets like Austin (-15.6), San Francisco (-13.7%), San Diego (-13.4%), Phoenix (-12.9%), Denver (-11.4%), Seattle (-11.2%), Tampa (-11.2%) and Las Vegas (-11.1%)  to experience double-digit home price declines in 2023
  8. Expect home prices to rise in Baltimore (+0.5%) and Miami (+0.8%) in 2023. 
  9. Expect the most significant blow to overheated markets like San Diego and Austin, which became too detached from fundamentals during the Pandemic Housing Boom.
  10. Goldman Sachs’ forecast, northeastern, Southeastern, and Midwestern markets could see milder or no corrections.
  11. Expect interest rates to remain elevated longer than currently priced in, with 10-year Treasury yields peaking in 2023 Q3 and the 30-year fixed mortgage rate rising to 6.5% by year-end 2023.
  12. Expect U.S. home prices to fall 6.1% in 2023 but not a prolonged downturn like the previous bust.
  13. The forecast for 2024 is a 1% rise in home prices.
  14. Mortgage rates remain the biggest wildcard for any home price forecast model; firms like Goldman Sachs may have to upgrade their home price outlooks if they continue to fall.