The financial institution Goldman Sachs reportedly sent a note to clients in early January about four cities that it believes are likely to experience a 2008-size crash in the housing market.
The note, obtained by the New York Post, reportedly states that Phoenix and San Diego, as well as Austin, Texas and San Jose, California, will likely see a boom-and-bust crash in home prices of more than 25%. Interest rates have skyrocketed and home prices continue to drop nationally.
“This [national] decline should be small enough as to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” Goldman Sachs wrote, according to the New York Post. “That said, overheated housing markets in the Southwest and Pacific coast, such as San Jose MSA, Austin MSA, Phoenix MSA, and San Diego MSA will likely grapple with peak-to-trough declines of over 25%, presenting localized risk of higher delinquencies for mortgages originated in 2022 or late 2021.”
Morgan Stanley Strategist Warns Stocks Face Sharper Decline Than Expected | @DailyCaller
OmFg nOoOoO wAy rLy?! It’s not like non-institutional bankers haven’t been saying this for months. Keep up, idiots. https://t.co/4TzMqEL4TR
— KAY SMYTHE (@KaySmythe) January 9, 2023
The housing markets in the Northeast, Southeast and Midwest are also expected to see corrections, but are anticipated to be milder than the four major cities noted by Goldman Sachs. (RELATED: ‘I Saw That Coming’: Daily Caller Reporter Slams Biden Admin For Acting Like Inflation Came Out Of Nowhere)
Financial experts — like Michael Burry, Nouriel Roubini, Stanley Druckenmiller and others — have warned of the impending crash for several months. The COVID-19 pandemic and the subsequent lockdowns created a bubble, a financial trend that has been transpiring since the start of the 2020s, along with the current inflation crisis.