Goldman Sachs credit researchers say some metro areas could see their housing market fall as much as 25% from peak prices.
The metro areas forecasted to decrease drastically include San Jose, Austin, Phoenix and San Diego.
In some markets, home prices have already declined by as much as 10%.
“This decline should be small enough to avoid broad mortgage-credit stress, with a sharp increase in foreclosures nationwide seeming unlikely”, the team wrote.
The recent hikes in interest rates has driven real-estate activity to slow down drastically in 2022. This decline is expected to last throughout 2023 as mortgage rates remain elevated.
In Canada, the housing market has also experienced similar declines. “Compared to February 2022’s peak of $816,720, the average sold price in Canada is now 22.5% off from that record-breaking month. This means that the average home price in Canada has now fallen by 22.5%, or close to $184,000, in the span of nine months. This has occurred at the same time as the Bank of Canada’s rate hikes, which started in March 2022. However, November 2022’s average home price is still higher than July 2022’s average home price of $629,971”, WOWA wrote.