With the U.S. economy having now recorded two straight quarters of negative growth, a recession is all but officially here.
Whether this downturn persists remains to be seen. But if it lingers or even deepens, some housing markets in the U.S. may be especially vulnerable to price declines, according to a new analysis by Redfin.
Redfin says places that soared in popularity during the pandemic are most vulnerable to a correction. In a press release, Redfin says:
“Homeowners in those areas who are considering selling may want to list their homes soon to avoid potential price declines.”
Following are the housing markets most likely to tumble if the U.S. economy goes into a tailspin.
10. Tucson, Arizona
Metro area’s overall downturn risk score: 70.1 out of 100
But with the nation’s economy now sagging, it is possible that housing prices in the city are heading for a fall.
9. Tampa, Florida
Metro area’s overall downturn risk score: 70.7 out of 100
Things have really cooled off down south in warm and sunny Tampa.
A housing market that was among the nation’s hottest is now No. 1 on the list of the “7 Housing Markets Where Bidding Wars Are Disappearing.”
Metro area’s overall downturn risk score: 72 out of 100
Like much of Arizona, Phoenix was a popular destination for folks who moved during the pandemic.
But recently, things have changed dramatically, and the city is now one of the “10 Markets With the Most Home Sales Getting Canceled.”
7. Bakersfield, California
Metro area’s overall downturn risk score: 72.2 out of 100
In 2021, Bakersfield was among the “15 Cities Where Homes Are Selling Fastest.”
But as Redfin notes, the markets that were hottest during the pandemic will be most vulnerable to price declines if the economy stalls.
6. Sacramento, California
Metro area’s overall downturn risk score: 73.1 out of 100
Frustrated home shoppers in Sacramento, rejoice! You soon should have more homes to choose from, possibly at more affordable prices.
That’s because California’s capital is among the “10 Housing Markets With the Most Sellers Dropping Prices.”
5. Las Vegas
Metro area’s overall downturn risk score: 74.2 out of 100
In recent years, a lack of inventory has been a major factor in driving housing prices higher in Las Vegas and many other places.
But now, Vegas makes the list of “10 Cities Where It’s Now Easier to Find a House for Sale.”
4. North Port, Florida
Metro area’s overall downturn risk score: 75 out of 100
Hordes of people headed to Florida during the pandemic, causing both home prices and rental costs here to surge. North Port itself has been among the “10 Smaller Housing Markets That Are Now Red-Hot.”
But the sunny skies surrounding housing could darken fast if the nation’s economy lingers in recession.
3. Cape Coral, Florida
Metro area’s overall downturn risk score: 76.7 out of 100
Another city close to North Port on Florida’s Gulf Coast — Cape Coral — also is in deep danger of seeing house-price declines after years of rapid growth.
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2. Boise, Idaho
Metro area’s overall downturn risk score: 76.9 out of 100
No state attracted more new residents in 2021 than Idaho. That caused housing prices to soar in places like Boise.
But values could be on the way down soon unless the economy perks up.
1. Riverside, California
Metro area’s overall downturn risk score: 84 out of 100
No market is more vulnerable to a recession-driven price correction than Riverside.
As we reported in the spring, this California community was among the “12 Cities Where Home Values Have Jumped Over 40% Since the Pandemic Started.” But housing has cooled off here, and it could get worse if the economy doesn’t pick up.