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The housing market in four major US cities could experience a drop of up to 25% in 2023, according to a recent prediction by Goldman Sachs – similar to what we saw in 2008. 

Goldman Sachs expects the housing market to drop up to 25% in these four major US cities:

  • San Jose, California 
  • Austin, Texas 
  • San Diego, California 
  • Phoenix, Arizona

Additional major US cities that Goldman forecasts home prices dropping by more than 10%:

  • Tampa, Florida 
  • Dallas, Texas 
  • Denver, Colorado 
  • Las Vegas, Nevada 
  • San Francisco, California 
  • Portland, Oregon 
  • Seattle, Washington

“This [national] decline should be small enough to avoid broad mortgage credit stress, with a sharp increase in foreclosures nationwide seeming unlikely. That said, overheated housing markets in the Southwest and Pacific coast, such as San Jose MSA, Austin MSA, Phoenix MSA, and San Diego MSA will likely grapple with peak-to-trough declines of over 25%, presenting localized risk of higher delinquencies for mortgages originated in 2022 or late 2021,” Goldman Sachs wrote in a quote reported by the New York Post.

Will the Past Predict the Future for 2023 Housing Prices? 

While headlines may look grim right now, both Goldman Sachs and Morgan Stanley (as cited in this Forbes article) do not predict a 2008-level catastrophe.  

Goldman Sachs believes the national decline in home prices would be small enough to steer clear from the heavy and nationally widespread number of foreclosures we saw during the 2008 recession.

Should You Wait or Invest in Real Estate for 2023?

While it is never ideal to see drops in the housing market, on the bright side, GS’s prediction does not seem to be a blanket statement for the entire country. They predict that certain pockets around the country (Phoenix, Arizona, for example) will experience larger drops than others (Tampa, Florida, for example). 

 Either way, a drop in the cost to acquire real estate could allow savvy investors with enough cash an opportunity to invest in properties, including commercial real estate and multifamily properties. 

 Smart investments in real estate this year could offer a better deal and stronger ROI potential when housing prices eventually stabilize and increase (which is to be expected in the next 1-5 years, according to this article that cites another Goldman Sachs prediction). 

 Outside of single-family homes, investing in other property types, like commercial real estate or multifamily homes, could be a smart move for those who have the cash or funding to support it. 

Best Real Estate Lending Options in 2023 

A loan can help support your real estate investments in 2023. We recommend considering a variety of options before making a choice on which type of loan to go with. 

At Innovative Capital, we are your loan concierge. Our team is dedicated to finding you the best quality loan at the best rates for your commercial real estate investments. 

We can help you shop multiple lenders in our network to find the right loan, or we can leverage private capital to help provide a solution when a deal is considered “un-bankable.” 

Through the extensive knowledge and experience of our team, we provide a strategic and varied outlook on the best solution – and we only earn our fee when we perform and provide a loan that you choose as your best option.

We have a large, varied list of connections with many types of lending sources, including private capital. 

We broker thousands of loans every year, many of which are real estate loans. See our current market rates and view our Recently Funded page for examples of clients we have worked with. 

  Get in touch with one of our team members for more information on securing a loan for your specific needs today. Request a quote here and we will get back to you shortly. 

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