I’m a Real Estate Agent: 3 States Where You Should Sell Your Property in the Next 5 Years
Home prices have spiked along with the cost of living in recent years, but that bubble could burst in some states. GOBankingRates spoke with Colten Claus, an associate broker with 8z Real Estate in Colorado Springs, Colorado, about the states where he predicts home prices could plummet within the next five years.
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For buyers in these states, it may be best to sell sooner rather than later.
States at Risk of Declining Home Prices
Claus identified these three states as the most at-risk for price declines:
New Jersey
“High property taxes and an aging population could contribute to a stagnating or declining housing market as demand decreases,” he said.
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Connecticut
“Like New Jersey, Connecticut faces high taxes and population exodus challenges, which could lead to lower housing demand and prices,” Claus said.
Illinois
“The state is grappling with significant fiscal issues, high taxes and population decline, particularly in the Chicago area, which could suppress home values,” Claus said.
Reasons for Potential Price Declines
Claus outlined the typical reasons why a state would experience a drop in home prices:
Economic stagnation: “States struggling with economic challenges, like job losses or poor economic growth, may see reduced demand for housing.”
Population decline: “States experiencing net population loss due to outmigration may face reduced demand for homes, putting downward pressure on prices.”
Tax burden: “High property taxes can discourage buyers, potentially leading to a glut in the housing market and lower prices.”
Overvalued markets: “Areas that have experienced rapid price increases in recent years might not sustain these levels as buyers reach affordability limits.”
What Homeowners Should Do
If you currently live in one of the states Claus mentioned or another state experiencing some of the characteristics of states with declining home prices, you may want to start taking action. Claus suggests starting by assessing local market conditions.
“Homeowners should monitor local economic indicators, migration patterns and housing supply dynamics,” Claus said.
If possible, consider selling your home within the next five years.
“Those in states at risk might consider selling in the short to medium term before potential declines,” Claus said.
When in doubt, consult a professional.
“Engaging with real estate professionals to get tailored advice based on specific local market conditions is crucial,” Claus said.
Don’t Panic
Even if it seems like your home value could be at risk, it’s important to note that this isn’t cause to panic.
“Real estate markets are inherently local and volatile,” Claus said. “Predictions are not guarantees and should be taken as part of broader analytical considerations. Some markets may rebound or stabilize after initial declines, depending on economic recovery, demographic shifts and policy changes.”
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This article originally appeared on GOBankingRates.com: I’m a Real Estate Agent: 3 States Where You Should Sell Your Property in the Next 5 Years
