A small city in Louisiana and two tourism hubs are most at risk of falling home prices in the coming year, according to a forecast released Tuesday by real estate data firm CoreLogic. Lake Charles, Las Vegas and Miami all could endure declining home prices, CoreLogic says.
The coronavirus has sparked a housing boom in much of the country. On the supply side of the housing equation, many homeowners decided not to sell this spring or summer, a trend that squeezed the number of homes for sale. As for demand, many white-collar workers kept their jobs — and realized that a house full of people working and schooling remotely was getting a bit cramped.
5 markets most at risk for falling home prices
While home prices have been rising in spite of high unemployment, CoreLogic says these five areas have a “very high” risk of declining home values in the coming 12 months.
- Lake Charles, Louisiana: Many homeowners in Louisiana already were struggling before the pandemic, and the recession has tightened the squeeze. Louisiana’s mortgage delinquency rate was 10.71 percent in August, second-highest in the nation, according to mortgage data firm Black Knight. Lake Charles was hit by Hurricane Laura in August.
- Las Vegas: Sin City’s economy is all about casinos, conventions and concerts — all of which have been curtailed by the coronavirus. As casinos reopened, Nevada’s jobless rate fell sharply. After topping 28 percent in April, Nevada unemployment had fallen to 13.2 percent in August. Home prices could fall 6.5 percent in Las Vegas by August 2021, CoreLogic says.
- Miami: Another tourism-dependent economy, Miami has welcomed far fewer visitors since March. What’s more, Miami-Dade County ranks No. 2 on Bankrate’s list of metro areas where home prices have outpaced wage growth by the widest margin over the past decade.
- Springfield, Massachusetts: Massachusetts has one of the nation’s highest unemployment rates, and Springfield is well outside the high-wage, high-tech economy of Boston.
- Modesto, California: This is another market where home prices have grown much faster than wages.