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By Peggy Horn
contributing writer 

Housing market crash on the way?

 

May 11, 2024



It is difficult to predict a market crash. Currently, the demand for housing is low due to high interest rates. Supplies remain low, as well. Experts expect to see an increase in demand as summer arrives but we expect the lack of affordable housing to be a problem for years.

According to a leading real estate data company ATTOM, their Housing Risk Report states that Kern County is one of the 50 most at-risk counties in the U.S. Based on home affordability and underwater mortgages (1.14% of Tehachapi homes), Kern County is vulnerable to a housing decline per reports from the fourth quarter of 2023.

“The fourth-quarter patterns – derived from gaps in home affordability, underwater mortgages, foreclosures and unemployment – revealed that California had a significant number of the counties considered most vulnerable to potential drop-offs,” states ATTOM.

A market crash can happen at a time of significant market uncertainty that goes along with increasingly unaffordable home ownership costs and high home-mortgage interest rates. Currently, there is risk based on the percentage of homes facing possible foreclosure (which we’re expecting to see increase in the upcoming months). There is also risk based on local unemployment rates, which in Kern County is currently at 10.1%. Unfortunately, this number has been increasing since September 2023 at an average rate of 0.5%. If the unemployment rate does not begin to drop and the Fed holds interest rates in the 7% - 8% range, I believe we will see a correction to the housing market.

In 2023 we saw a 10% increase in the number of foreclosures in the U.S. from the year before. Currently, as of May 3, 2024, Kern County has 164 properties in foreclosure with 12 of those being in Tehachapi. If you are in default and are worried about foreclosure, FindHelp.org may be of assistance to you.

Peggy Horn is the Office Manager at Coldwell Banker Frontier. She is happy to answer any questions you may have regarding the real estate industry. You can reach her at 93561Expert@gmail.com/.

 
 

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