Moody’s: Home prices to fall
Fortune published a report created by Moody’s Analytics division that suggests housing prices could fall by up to 10% in some U.S. cities. According to Mark Zandi, Moody’s chief economist, the dip will not represent a nationwide correction in home prices.
Zandi predicts that home prices will drop to zero over the next twelve months. He predicts that some of the most expensive housing markets will see a decline.
Zandi attributes the market’s cooling to rapidly rising mortgage rates in a market already overvalued. Fortune reported that Zandi doesn’t believe the current market prices are indicative of a housing bubble because speculation is not accompanied by overvaluation. Fortune reports that he does see some “speculation creeping into” markets such as Phoenix and Charlotte, where they are overvalued by 46%, and 33% respectively.
If a market for housing is considered overvalued, this means that home prices are higher than average and local incomes. Moody’s research found that 96% of 392 metro area markets were “overvalued,” with 149 being at least 25%.
Fortune also published an interactive chart that shows the overvalued markets. The values range from -6% to -6%. This means that home prices are less than expected when you factor in local incomes. Boise, Idaho is the most overvalued place in the country at 73%.
These are some of the most expensive regions and cities where home prices can be expected to fall by 5% to 10% in the next 12 month…
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Boise, ID — 73%.
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Sherman-Denizon, TX — 60%.
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Muskegon, MI — 59%.
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Morristown, TN — 57%.
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Homosassa Springs, FL — 57%.
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Lake Havasu City — Kingman, AZ — 56%.
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Kahului-Wailuku-Lahaina, HI — 55%.
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Dalton, GA — 55%.
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Flagstaff, AZ — 51%.
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Pocatello, ID — 49%.
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Bremerton-Silverdale-Port Orchard, WA — 48%.
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Albany-Lebanon, OR — 48%.
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Idaho Falls, ID — 48%.
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Nashville-Davidson-Murfreesboro-Franklin, TN — 48%.
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Palm Bay-Melbourne-Titusville, FL — 48%.
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Clarksville, TN / KY — 48%.
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Bellingham, WA — 47%.
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Myrtle Beach-Conway-North Myrtle Beach, SC / NC– 47%.
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Phoenix-Mesa-Chandler, AZ — 46%.
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Cleveland, TN — 46%.
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Asheville, NC — 46%.
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Flint, MI — 46%.
