Home Values May Drop Up To 25% in Johnson County, Kansas

This Pandemic Housing Bubble Could Turn To a Pandemic Housing Boom and Home Values Drop Up To 25%

According to Goldman Sachs, Moody's Analytics, and Fitch Ratings, home values could fall up to 15%, and in some overvalued markets home values could fall up to 25% 

Only three times since the Great Depression have seen home values seen significant drops. It happened in the 1980's and again in the 1990's. The last time home values dropped significantly was during the housing crash between 2006-1010.

Goldman Sachs Investment Banking Outlook - Home Values Expected to Drop

Last month, Goldman Sachs released a positive report for the 2023 real estate outlook. It has recently changed its outlook.

Goldman Sachs currently anticipates U.S. home costs to fall up to 10%. 
"We view the dangers to these evaluations as shifted to the drawback due to a sharp decay in our engaging home cost standpoint scores and proof areas of strength for of inversion in territorial information," compose Goldman Sachs scientists.

Moody's Analytics Outlook - Home Values May Drop Up To 25% in Johnson County, Kansas

Lending has changed since the 2006-2010 Housing Crash and those changes will help prevent another similar housing crash. But despite those changes, there will be a fall in home prices. Moody's Analytics predicts U.S. home prices may even drop up to 15% if the country slips into an economic downturn. 
Moody's Analytics analyzes the economy on a regional level and predicts overvalued real estate. If the market is overvalued, the housing market could see housing market crash by up to 25%. Unfortunately, Moody's Analytics has labeled Johnson County as an overvalued market, so look for Johnson County to drop nearly 25% in value in the next 12 months.

Johnson County Real Estate Market is Overvalued

Fitch Ratings - Home Prices Could Fall Up To 15%

Fitch Ratings has turned more bearish since the likelihood of a severe economic downturn has elevated.

“The likelihood of a severe downturn in U.S. housing has increased; however, our rating case scenario provides for a more moderate pullback that includes a mid-single-digit decline in housing activity in 2023, and further pressure in 2024,” wrote Fitch Ratings researchers on Tuesday. “Although we recently affirmed the ratings and Stable Outlooks for our U.S. homebuilder portfolio, ratings could face pressure under a more pronounced downturn scenario that would likely include housing activity falling roughly 30% or more over a multiyear period, and 10% to 15% declines in home prices.”

Conclusion:

The largest financial giants are predicting the Pandemic Housing Bubble to drop home values fall up to 10% within the next 12 months. If you own a $500,000 home, that could mean you will have $50,000 of your equity wiped away. Now if the Pandemic Housing Bubble becomes a Pandemic Housing Boom, you could lose nearly $125,000 of your equity on a $500,000 home. If you were thinking of downsizing, this might be the time to downsize.

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