I’m a Real Estate Agent: 6 Metro Areas at Huge Risk of a Housing Market Crash
Written by
Stacy Sare Cohen
Edited by
Zuri Anderson
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A weakening economy, high interest rates and the trade war increasing construction costs are pushing buyers out of the market, according to The Washington Post.
On the ground, real estate professionals are seeing some cities hit harder than others. These metro areas are feeling the impact of a potential housing market crash this year, according to the experts.
Tampa, Winter Haven and Palm Beach, Florida
Tampa, West Palm Beach and Winter Haven are showing “serious signs of a slowdown with [an over] 70% chance of price drops, said Adrianna Trigg, founder of investment real estate company Legionary REI.
“Florida’s not in 2008 territory, but we are seeing a mix of overbuilding, insurance chaos and buyer burnout [which makes sellers feel stuck],” she added.
“Cash sales and creative options like novation are helping them move fast before prices slide further, added Trigg. “It’s not doom and gloom, but if you’re in these areas, it’s smart to start planning now.”
Chicago
Another area at risk of a housing market crash is the Chicago West Loop.
Gunnar Blakeway-Walen, marketing manager at FLATS, said he’s seeing qualified applicants for 60% of AMI units at the Duncan failing employment verification requirements — “a red flag indicating job market instability that typically precedes housing corrections.”
“Tenant retention analytics show existing residents extending leases at unprecedented rates, even in studio units as small as 300 square feet,” said Walen. “This behavior suggests people are hunkering down financially rather than making typical housing moves, creating artificial occupancy that masks underlying demand weakness.
He continued, “Another warning sign in vendor contract negotiations as construction and signage suppliers offer sizable discounts without pushback, indicating pipelines are drying up. When contractors become this flexible on pricing, it signals reduced development activity that precedes market slowdowns.”
New York Metro
The New York City metro area is particularly vulnerable right now, said Daniel Rivera, real estate investor and founder and president of Proactive Property Management. He added that he’s seeing warning signs that remind him of pre-2008 conditions.
“What’s most concerning is the debt-to-income ratios I’m seeing during tenant screening; we’re approving tenants at 45% [to] 50% DTI ratios when we used to cap at 30%,” he noted. “[Landlords] are having to reduce asking rents because qualified applicants simply aren’t there at previous price points.
“The combination of high interest rates, inflated property values and stretched tenant finances creates a perfect storm.”
Denver
Denver is another metropolitan area experiencing a significant increase in inventory, with active listings up over 75% year over year, said Brett Johnson, owner and licensed real estate agent at New Era Home Buyers. This is taxing on sellers as buyers have the upper hand as homes sit longer and price reductions are common, said Johnson.
Meanwhile, affordability has taken a big hit, said Johnson.
“The Denver Metro Association of Realtors just reported the average monthly mortgage payment for a median-priced home is over $3,600, which is completely out of reach for many families. Add in interest rates still at 7%, and it’s easy to see why buyer demand is stalled.”
While Johnson said he wouldn’t call it a crash yet, he said the signs are all there for a meaningful price correction.
“Denver could see a 10% drop in home values in certain submarkets by the end of the year if this trend continues,” said Johnson.
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