These are the Top 10 Worst Cities to buy a house in 2023. Areas where home prices are still expensive and have a good chance of declining in future years as the real estate market downturn gets worse.
10. Las Vegas, NV - home prices in Las Vegas are already down by 5% YoY and could have another 20% decline coming given the complete lack of affordability across the real estate market.
09. Nashville, TN - investor purchases in Nashville have plummeted, leaving the local homebuyer to support the market in 2023. The result will be a decline in prices because locals can't afford the payments.
08. Portland, ME - wealthy transplants from Boston and New York bought up homes in Portland during the pandemic, pushing prices way up. The result is that locals now need to spend 50% of their gross income to afford a home.
07. Miami, FL - recessions hit Miami very hard, with the unemployment rate typically spiking to near 10%. Right now the unemployment rate is only 2%. That won't last. Get ready for forced selling.
06. New York, NY - lots of people left New York during the pandemic, however housing affordability hasn't really improved. Prices in Manhattan and suburbs like Bronxville are still well over $1 million.
05. Phoenix, AZ - home prices in Phoenix are down 5.4% over the last year and could have another 25% decline to go. This housing market is getting hit from all angles right now with a declining rental and Airbnb market as well.
04. San Francisco, CA - the most expensive housing market on this list, with the typical home price of nearly $1.2 million. Prices in San Francisco are already down 10% and could decline by more due to quality-of-life issues and the tech recession.
03. Sacramento, CA - lots of people moved to Sacramento during the pandemic to escape San Francisco. But now that influx is slowing, and the locals can't afford the houses with a payment ratio north of 50% of income.
02. Orlando, FL - a very tourism-dependent economy with low wages and historical risk factors in a recession. Don't be surprised if there's lots of mortgage defaults and foreclosures in Orlando over the next several years.
01. Riverside, CA - the complete package in terms of being expensive, overvalued, and having huge recession risk. The unemployment rate in Riverside went to 15% in the 2008 crash. Right now it's only at 4%. Be careful buying here in future years.
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