Are we seeing the early signs of a massive housing collapse?

Switching it up today from the usual healthcare focused info.

Most of us remember 2007-2008 very vividly. The housing market took the largest dump it could, builders were bankrupt, and people were stuck in an overpriced house that lost half its value or they sold it at a loss on a short-sell. As someone who’s house personally lost 50% of its value during that housing crisis, despite not buying a home that was inflated in cost, (mine dropped due to all the short sells/foreclosures around me at the time), and remembering that it took damn near 8 years to get that value lost back…….I learned to never buy a home during the high, and never sell during a low.

Sadly, the housing market has been so bloated and inflated the last few years purely due to supply and demand. Investors have been gobbling up houses at 20-30% market value and renting them out. But the tide is turning. One of the best indicators of a housing market going sour is to look at the sunbelt. The area from Arizona to Florida where it is moderate climate and people often own second winter homes, or move to a climate that is milder and more enjoyable than northern winter.

What are we seeing? Year over year housing values are taking a dump. Why is this important? When the sunbelt sees these kinds of value losses, the rest of the country is not far behind. It can be a key indicator of an impending housing recession. Rumor on the streets is that investors who gobbled up houses in these areas are now dumping them, putting them on the market for less than they paid for them, to get rid of them. Another warning sign of a potential housing value free-fall.

Here are some key areas with losses. It hasn’t reached Florida yet, this is west moving east. It has stretched from Vegas to Phoenix all the way to New Orleans. Florida will be the next one as the weeks/months go by.

Vegas and Phoenix at a -6.9% year over year home value:

Austin is a real hum-dinger with a -11% value loss. Why is this most concerning?! This is a college town. It used to be the destination spot for California peeps exodusing to Texas. It also has a notoriously high ease of rental rate due to college students at the University of Texas being guaranteed renters. This loss in value is highly concerning.

New Orleans is at -8%

Keeping an eye on these numbers. How low will this go? How far will it reach? How deep will the housing recession get?