Home values continued to surge in May, but a dramatic slowing of home price growth still is expected, according to property analytics firm CoreLogic.
Home prices nationwide shot up 20.2% year over year in May, CoreLogic says. However, the forecast is for price growth to slow to 5% between May 2022 and May 2023.
In a handful of markets, prices may actually drop over that time frame. Following are the five in the greatest danger of slipping in the next 12 months.
Bremerton-Silverdale, Washington
Market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
The combination of a booming economy and a lack of housing has pushed home prices higher and higher here.
But as mortgage rates jump and housing everywhere begins to cool, markets that formerly were the hottest places in the country are most at risk of falling into a deep freeze.
Bellingham, Washington
Market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
Bellingham is another city in Washington state where home prices have soared and now are in danger of reversing course.
Not every housing market in America is in danger of a big fall, however. For more, check out “10 Housing Markets That Are Most Likely to Keep Their Value.”
Boise City, Idaho
Market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
As we have pointed out several times, Boise has been a magnet for drawing new residents, particularly in 2021.
But prices have soared so high here that many experts think it is just a matter of time before they sink back down to earth. In fact, this city finished No. 1 on the list of “15 Housing Markets Overvalued by More Than 50%.”
Tacoma-Lakewood, Washington
Market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
Are sellers in Tacoma already starting to get a bit nervous? Could be. After all, the city finished No. 2 on the list of “10 Housing Markets With the Most Sellers Dropping Prices.”
Recently, nearly half of homes for sale in this market recorded at least one price drop.
Olympia-Tumwater, Washington
Market’s likelihood of a price decline over the next 12 months: Very high (more than 70% probability)
In May, the Northwest Multiple Listing Service indicated that sales in this region of Washington were flat year over year, and inventory levels were growing.
Trends such as those may account for why the Olympia-Tumwater market is the fourth in Washington to be in major danger of a price correction, as predicted by CoreLogic.
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