According to The Real Deal, the city of Miami ranks in the top three for risk of falling home prices in times of recession. The data comes from a report by Redfin that lists the 50 largest U.S. cities’ risk of a housing downturn in the next recession. Riverside, Calif., and Phoenix are No. 1 and 2. Los Angeles came in at No. 8, New York City was tagged at No. 23, and Chicago was No. 45.
The metro area with the lowest risk of a real estate dip during a recession are two Upstate New York cities: Rochester then Buffalo. Number three on the list was Hartford, Connecticut. These areas have less investor activity and more reasonably priced homes, according to a Redfin.
The ranking shows that many of the most at-risk areas are the same ones that saw collapsing housing markets during the Great Recession. In addition to Miami and Phoenix, Las Vegas is also high on the list, at No. 7.
In these areas, buyers are more leveraged and a larger share of the market is dominated by home flippers, according to Redfin. In the past year, 7.5 percent of home sales in Miami were flips, compared to Hartford, Connecticut, which saw was 2.8 percent of all home sales as flips. Home prices in these markets are also more likely to be artificially inflated since there is a significant amount of investor activity, which drives prices up, according to the report.
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