Goldman Sachs is Predicting a Crash in Phoenix…Not so Fast, Says Phoenix RE Exec
Goldman Sachs expects record drops in Phoenix home prices similar to the 2008 crash, 25% or more. In 2008 we saw subdivisions abandoned by builders, weeds in yards, boarded up windows…foreclosure signs everywhere. But, in Phoenix, now? This time around? Don’t count on it.
Dave Cheatham, founder of Velocity Retail Group, has transacted more than $3 billion of retail transactions. He’s not buying what Goldman Sachs is selling. Dave says it’s not a crash, but a correction back to normal levels, “The difference between 2008 and now is the market is not overbuilt. Phoenix continues to have a shortage of housing. It’s a correction to pre-Covid prices that will be good for the market and is not catastrophic as those two previous years (of the over-heated market) were an anomaly, and will be corrected.” He added that if the market did not correct to normal pricing, it would stymie growth for the long term. Cheatham also said he is not “seeing loose money” like he saw during the ’80’s Savings and Loan disaster, or loans given out to unqualified buyers like we saw pre-2008.
So, while we’ve seen a drop, Cheatham says don’t panic. It’s not a crash, it’s just the market righting itself.