Real estate experts predict that several types of homes may lose value over the next 12 to 18 months, largely due to high interest rates and housing prices. This includes condominiums, urban apartments, older suburban homes, certain luxury properties, and vacation or second homes. The Federal Reserve Bank of St. Louis reports that the average home sales price is over $500,000, complicating market dynamics.
Key factors behind the anticipated decline include oversupply in specific housing markets, shifts in buyer preferences due to remote work, and higher unemployment rates affecting local economies. For instance, older suburban homes that are 10-30 years old are projected to face significant value depreciation, as new constructions dominate market trends.
Experts like Danny Johnson and Alex Capozzolo have noted that the rise in remote work leads buyers towards suburban or rural homes, decreasing demand for urban living spaces. This, alongside a cautious approach from potential buyers concerning second properties due to high associated costs, contributes to the predicted downturn in various real estate segments.
