Austin could experience 2008-style real-estate market collapse, Goldman Sachs predicts
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In a memo to customers, Goldman Sachs said home values in the Austin metro area could see declines of over 25%.
Austinites who look down on the rest of Texas could soon be in for a rude awakening.
Home values in the Austin metropolitan statistical area could decline by more than 25% in coming months, according to a recent memo from investment bank Goldman Sachs obtained by Fox Business.
A home decline of such magnitude would be nearly as bad as the 2008 financial crisis, when home values countrywide plummeted by 33% on average, according to a report by financial services company CoreLogic.
In the memo, which Goldman Sachs circulated to customers this month, the bank warned that specific Southwest and Pacific housing markets including Austin, Phoenix, San Diego and San Jose, California, were at a higher risk of delinquent mortgage payments. That could lead to a slew of foreclosures, reports Fox Business.
Specifically, Goldman Sachs was most concerned about mortgages taken out in late 2021 and all of 2022, according to the cable network.
“This decline should be small enough as to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely,” analysts wrote, according to Fox Business.
Meanwhile, San Antonio’s housing market looks set for another solid year. Although home sales declined in recent months, median Alamo City home values are still 6% higher than a year ago, according to the latest data from the San Antonio Board of Realtors.
The National Association of Realtors also named San Antonio as the No.9 top real estate market to watch in 2023. Austin wasn’t mentioned on that list.
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