If you’re eyeing an area for investment, consider that some cities have been seeing cooling home prices outside of the norm. Business Insider, using data from Zillow, found the 13 cities where investors may want to hold off investing in for the next decade.
Many of the cities on Business Insider’s list are in historically high-priced areas in New York and California. Speaking to Business Insider, Beatrice de Jong of Opendoor stated that many West Coast markets have seen their homes lose value quickly following the tech boom. This includes the tech company hub Greater San Antonio, Mountain View, California, where the current home value of $1,224,900 is predicted to drop 5.83% year-over-year.
“Seattle, Palo Alto, and Mountain View are big tech hubs," de Jong says. "Most of those cities have a lot of new jobs, high-paying jobs, bringing people up to the area. That really created a spike in the real-estate prices.”
Similar price drops can be expected in other high-priced areas including New York City, such as in the East Village, where the median home value of $1,247,400 is expected to drop 5.83%. However, in New York, like many high-priced areas, home prices are volatile.
“New York is so hyper-local, even just to the neighborhood in Manhattan," deJong says. "Real estate is even affected by something like a subway line being under construction because that affects people's daily commutes."
Taking the top spot on Business Insider’s list is North College Park, Seattle. A tech city, the area’s median home value of $599,100 is expected to drop by 6.98% year-over-year, reflecting Seattle’s overall home price cooling. Zillow data shows that the median value in this city is down from June 2018's high of $750,000 to $700,000 this past September.
These home price shifts may scare of investors, but deJong notes that there is no need to panic.
“The real-estate market is always cyclical," De Jong says. "It's hyper-local but it's also cyclical.”