House prices could fall by up to 20 percent next year if there’s a recession, experts warn – and property in some areas of the country is overvalued by as much as 72 percent.
Mark Zandi, chief economist for Moody’s Analytics, was pessimistic about the housing market in May, but he has now made his forecasts even more bleak, Fortune reported on Wednesday.
It comes amid ongoing arguments over whether the US is already in a recession, with the country recording two consecutive quarters of negative growth – the traditional definition of such a slump.
The news is particularly dire for people who have purchased homes in what Fortune terms ‘bubbly’ markets, with Boise in Idaho, Charlotte in North Carolina and Austin in Texas all named the most overvalued markets.
But a total of 180 other areas across the US have property deemed overvalued, many of them highly-desirable.
They include LA, Orlando, Seattle and Indianapolis, where property is all estimated to be 30 percent overvalued.
Homes in Houston are around 34.5 per cent overvalued, while properties in Montana are 25 per cent overvalued.