Boise/Phoenix Housing Tops Blown Off

Fortune/Yahoo headline:
These bubbly housing markets—including Boise and Phoenix—already got their home price ‘top’ blown off

Lance Lambert
Mon, July 18, 2022 at 6:21 AM·4 min read…

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These bubbly housing markets—including Boise and Phoenix—already got their home price ‘top’ blown off
Lance Lambert
Mon, July 18, 2022 at 6:21 AM·4 min read

Before governors relaxed stay-at-home orders two years ago, white-collar professionals were already fleeing their exorbitantly priced apartments in cities like San Francisco and Seattle. The biggest beneficiary of that WFH homebuying wave was undoubtedly Boise—where home prices skyrocketed 53%. You could even call it the poster child of the Pandemic Housing Boom.

But that Boise honeymoon is over. While spiking mortgage rates have pushed the overall U.S. housing market into a slowdown, it has delivered a particularly hard blow to the Boise housing market. That has seen both Boise home sales plummet—down 28% on a year-over-year basis—and inventory levels surge—up 161% this year. It’s also chipping away at home values. According to Zillow, the median Boise home sales price fell 3.5% in June.

The downward slide in Boise has only just begun. That’s according to Rick Palacios Jr., head of research at John Burns Real Estate Consulting. By December, the real estate research firm projects that home prices will be negative in Boise on a year-over-year basis. In order for that to happen, Boise would not only have to lose all of its 2022 gains—which is already starting to happen—but also fall under its December 2021 price. Boise isn’t the only market that has seen its home price “top” blow off. Markets like Phoenix and Austin have also, Palacios says, entered into a downward slide.

Further down in this article is the “optimistic” paragraph:

Where are we headed next? According to Moody’s Analytics, U.S. home prices are set to flatline by this time next year. Meanwhile, significantly “overvalued” housing markets like Boise and Austin are headed for a 5% to 10% trimming over the coming year. That assumes no recession. If a recession hits, Moody’s Analytics projects a 5% U.S. home price decline and 15% to 20% declines in significantly “overvalued” housing markets.

My note: I’ve seen many million dollar homes here in the Keys sell 10% or more below recent asks.
This may have something to do with mainlanders finally realizing that home insurances for homes in the Hurricane Zone are going to accrete yearly, anywhere from 8-25% per annum.

Worse still: A recent article in the Miami Herald talked about our insurer of last resort, Citizens, a GSE (government sponsored entity) is now unable to insure thousands of homes above the $700,000 level as rebuild costs are exceeding the actual appraisal replacement costs of the home. Again, insurance rates - if you can still get insurance - are more than some mortgages on these homes built right on the ocean or bay.

What is about to happen here in Florida can shoot a 155mm howitzer shell right through DeSantis’s run for the Presidency. All the climate change denialists in Florida are going to have their Day of Reckoning in a way they will understand: Reinsurers and Insurers giving up on Florida’s build til you drop mentality.


One more paragraph from the Ursa Major in this article and their view on what is about to befall in U.S. housing:…

John Burns Real Estate Consulting is even more bearish. Not only does the firm project that U.S. home prices will fall in 2023, it also projects that U.S. home prices will fall in 2024. It forecasts the biggest 2023 home price drops will occur in Boise; Phoenix; Nashville; West Palm Beach, Fla.; Las Vegas, Port St. Lucie, Fla.; Riverside, Calif.; Fort Myers, Fla.; Austin; and Visalia, Calif. (John Burns Real Estate Consulting only provides the numerical forecast figure to its paid clients).

Q: How will we know that it is too late to do anything about climate change?

A: It sinks a Presidential candidate’s chances.

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Answer should read.
Denying it sinks a Presidential candidate’s chances.

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