J&B Market Update: 1-27-23: What’s Goldman Sachs saying about housing?

MSN, Business Insider, Fox Business, the whole internet is talking about a Goldman Sachs report saying that four U.S. cities will see a dramatic 2008-like crash in home values. Should you worry? Maybe…

So should you worry? Yes, but no. Here’s why: The four cities in the Goldman Sachs report are San Jose, San Diego, Austin, and Phoenix. Don’t live there? Don’t worry.

If you do live there, maybe still don’t worry. Goldman Sachs is one of the mega-companies that played a part in the 2008 Global Financial Crisis, having admitted in 2016 to having defrauded investors and paying a staggering $5.1 billion to settle the Department of Justice lawsuit.

Color me a little skeptical if Goldman Sachs says that the sky is falling anywhere.

At the recent Annual Economic Forecast hosted by Old Dominion University in Norfolk, the local economic forecast by our local Hampton Roads economists paints a modestly hopeful picture for 2023 and 2024.

The median sales price appreciation for homes in Hampton Roads was up 7.5% in 2022 from the year prior, with Williamsburg and environs leading the way with a 10.3% gain and —surprise! — Suffolk right behind with a 9.9% gain. And the ratio of sold price to list price in October 2022 was 99%, compared to the recent high in April of 102.5%. A whopping 3.5% differential (smaller than inflation). I’ll take it.

While home values may dip a tad in certain areas in our region (see our previous video on local markets), values are still ahead of where they were in 2019 — and even a good portion of 2020.

Here’s the bottom line: We here in Coastal Virginia and Hampton Roads are going to be all right. We may have some periodic pain, economically speaking, but the big picture is that we will survive.

(This is where I would like to say “cue the music” and play Gloria Gaynor’s “I Will Survive.” Alas, we don’t have a music licensing budget, so I’ll drop a link to the official music video.) 👇