If you live in the New York or Washington metropolitan areas there is a nearly 50% chance that your home is losing value.
According to Bloomberg, 45% of homes in both areas faced a slump of at least 2 percent in June compared to a year earlier.
In a new index created by Allan Weiss, co-founder of the Case-Shiller home price indexes, it was revealed that in June 2014, only 15 percent of Washington residences dropped in value, while 20 percent fell in New York. The study was based on single-family homes and therefore does not include Manhattan.
With high home prices and weak income growth, it appears that American buyers are shying away from property in big cities. Credit also remains tight which may be scaring some buyers away from the purchase of a home.
“What happens in any bull asset bubble such as what we’ve seen is you run out of buyers,” said Chris Whalen, senior managing director at Kroll Bond Rating Agency Inc. and an advisor to Weiss. “It’s hard to get deals done if the bottom third can’t get a mortgage.”
City homes in many areas are still gaining value, while homes in surrounding suburbs are losing value.
Analysts warn that an increasing drop in home prices could signal another bubble or other market troubles.