Home prices in the US may be riding high, but the party could be over sooner than you think.
A new report reveals more than 50 counties across the country are at risk of a housing market meltdown.
It’s a dream come true for first-time buyers hoping for a bargain, but a nightmare for current homeowners basking in sky-high property values.
According to research from property-data firm Attom, states like California, New Jersey and Illinois have the most counties likely to see prices take a nosedive.
What’s driving this? The usual suspects — soaring foreclosures, underwater mortgages and rising unemployment rates.
“The housing market boom continues to gain momentum. However, some markets show signs of potential instability,” said Attom CEO Rob Barber.
Attom analyzed data from 600 US counties, flagging key hotspots like the New York City and Chicago metro areas, as well as large chunks of California.
Of the 51 most vulnerable counties, 24 were in these regions, including Brooklyn, Staten Island and The Bronx in New York — and four nearby New Jersey counties like Essex and Union. Midwestern counties like Cook in Illinois and Lake in Indiana also landed on the danger list, along with a dozen counties scattered across California from Butte in the north to Riverside in the south.
Meanwhile, pandemic housing hotspots in the Sun Belt, like Fort Worth and Tampa, are already feeling the burn, with home values sliding as more properties hit the market.
Austin, Texas, and Cape Coral, Florida, took the biggest blows, while real estate in Florida’s Lakeland and Crestview is also on the decline.
In Florida, the condo market is in full-blown crisis mode. Owners, looking to offload their properties, are slashing prices — sometimes by nearly 40% — to avoid getting stuck with massive repair bills. These skyrocketing costs come after state legislation forced condo owners to address long-neglected maintenance issues following the 2021 collapse of the Champlain Towers in Surfside, which killed 98 people.
Some owners are watching nearly half a million dollars disappear from their asking prices, creating what some realtors are calling the worst real estate disaster in decades.
For buyers, there’s some relief in these softer markets, but don’t get too comfortable.
The average down payment is now a whopping $67,500, and in some US cities it’s even higher, crossing the $400,000 mark.
“With the housing market still facing challenges, it’s crucial to closely monitor regions where key indicators suggest a higher likelihood of issues,” Barber warned.
Down payments have also jumped in percentage terms, with the typical buyer forking over 18.6% of the purchase price as of June, up from 15% last year.
Elevated mortgage rates are pushing buyers to throw more money down upfront, trying to ease the financial hit. The housing market may be booming for now, but storm clouds are gathering on the horizon.