As interest rates rise, home sales are predicted to plummet.
Goldman Sachs highlights four cities they predict are in for a massive housing crash in 2023, which they believe will be like the nationwide crash in 2008. Those cities are San Jose, CA, San Diego, CA, Phoenix, AZ and Austin, TX. Experts say the state capital of Texas has an overheated housing market that is likely to cool off this year. Home prices could fall as much as 25%.
“Several Tech companies have relocated to Austin over the last couple of years, but there’s been announcements of layoffs across the board,” Hank Lewis, economist with Lone Star College, said. “So, some of those folks are going to start to become delinquent on their mortgages unless they get good severance packages.”
Lewis believes a nationwide recession is possible, but he doesn't think it will be on the same scale as “The Great Recession”, as more restrictions were put in place on mortgage loans after the 2008 housing collapse.