Miami among most at-risk cities for falling home prices during next recession: report

LA would also among the most at-risk, according to Redfin’s new ranking, while New York and Chicago are lower on the list

National /
Sep.September 10, 2019 12:15 PM
Miami will see a big dip in home prices during the next recession, according to reports (Credit: iStock)

Miami will see a big dip in home prices during the next recession, according to reports (Credit: iStock)

Home prices in Miami fell sharply after the financial crisis when buyers and investors took on loads of debt and could no longer meet payments. As another potential downturn approaches, Miami faces similar problems.

Nationwide, Miami has the third-highest risk of seeing a downturn in housing prices during the next recession, according to a new report by Redfin. It tracked the 50 largest U.S. cities’ risk of a housing downturn in the next recession.

The Magic City trails only Riverside, California, and Phoenix as the most likely to see a drop in home prices during a recession, according to the report.

Los Angeles was also among the most at-risk, coming in at No. 8, while New York City was near the middle of the pack at No. 23. Chicago, meanwhile, was one of the least, falling 45th on the list.

The metro area with the lowest risk of a real estate dip during a recession are two Upstate New York cities: Rochester then Buffalo. Number three on the list was Hartford, Connecticut. These areas have less investor activity and more reasonably priced homes, according to a Redfin.

The ranking shows that many of the most at-risk areas are the same ones that saw collapsing housing markets during the Great Recession. In addition to Miami and Phoenix, Las Vegas is also high on the list, at No. 7.

In these areas, buyers are more leveraged and a larger share of the market is dominated by home flippers, according to Redfin. In the past year, 7.5 percent of home sales in Miami were flips, compared to Hartford, Connecticut, which saw was 2.8 percent of all home sales as flips.

Home prices in these markets are also more likely to be artificially inflated since there is a significant amount of investor activity, which drives prices up, according to the report.


Related Articles

arrow_forward_ios
(Georgia MLS via Zillow)
Pole Vault: Stately Georgia home has strip-club-esque basement
Pole Vault: Stately Georgia home has strip-club-esque basement
(iStock)
Homebuilder sentiment ticks up in April
Homebuilder sentiment ticks up in April
(iStock)
Mortgage requests, refinancings continue to drop
Mortgage requests, refinancings continue to drop
Many of these investors are targeting lower-priced homes. (iStock)
Institutional investors, higher material costs lead to rising home prices
Institutional investors, higher material costs lead to rising home prices
Canada’s Public Sector Pension Investment Board CEO Neil Cunningham (left) and Allianz SE CEO Oliver Bäte (PSP Investments, Allianz, iStock)
Canadian pensions, Asian wealth funds eye single-family home rentals
Canadian pensions, Asian wealth funds eye single-family home rentals
The state has opened 52 more investigations into potential fair-housing law violations tied to the Newsday report (iStock)
Agents named in discrimination exposé face discipline from NY state
Agents named in discrimination exposé face discipline from NY state
An index tracking applications for mortgages to purchase homes decreased 5 percent. (iStock)
Frenzy ending? Mortgage requests fall 5%
Frenzy ending? Mortgage requests fall 5%
(iStock/Illustration by Kevin Rebong for The Real Deal)
March madness: Homes sold faster than ever last month
March madness: Homes sold faster than ever last month
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...