Originally published on November 3, 2021, for Bloomberg.com.
Ivy Zelman, the housing analyst famous on Wall Street for calling the top of the market in 2005, less than two years before the collapse, sees warning signs once again.
After a historic run-up in values during the pandemic, housing in the U.S. is at -- or near -- the peak, she says. She’s cautioning clients that overheated areas with heavy concentrations of investors, including Phoenix, are likely to face “corrections.” A modest rise in 30-year mortgage rates, even to 4%, would bring demand to a halt, according to Zelman.
Cracks are already appearing: The pace of price growth nationwide has started to slow, and in Covid boomtowns such as Boise, Idaho, and Salt Lake City, bidding wars are suddenly giving way to discounts.