Goldman Sachs shares 4 charts that explain the state of the housing market right now — and show why 4 cities could soon see the biggest price declines
— is due to Goldman's outlook for housing supply levels. Supply remains tight despite new homes continuing to come onto the market. A worst-case scenario supply shock still wouldn't rival that seen during the mid-2000s housing crisis, the bank said in a note last week. But under the surface of the broader market, things are more complicated. In certain areas of the country, supply levels are rising faster than in others.
In four cities in particular, supply levels are above pre-pandemic levels, the bank said, which will result in greater price declines than the national average. They include: Phoenix, Arizona; San Francisco, California; Seattle, Washington; and Austin, Texas. "While overall levels of housing inventory remain tighter than pre-pandemic levels, some vulnerable metropolitan areas have seen supply increase rapidly," said strategists Lotfi Karoui, Vinay Viswanathan, and Ronnie Walker.
"We think the risk of a potential supply surplus is elevated in the multi-family space. Almost 40% of total housing starts over the past 6 months have been for multi-family units, the largest share in 39 years. While multi-family developments do take longer to execute, this could challenge the medium- to long-term outlook for rental properties."Subscribe to push notifications
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