Not Even The Billionaire Kardashians Can Keep The Idaho Housing Bubble From Popping

TMZ has dubbed it “North Hollywood.” The billionaire Kardashian clan makes frequent visits, as do other celebrities like Justin Bieber, Mark Wahlberg and Harry Styles.

All the Instagram love from the jet set won’t keep the housing bubble from popping in Coeur d’Alene, Idaho, according to Veros Real Estate Solutions, which provides residential property valuations to the real estate industry.

Coeur d’Alene — nicknamed “CDA” by locals — was dubbed “America’s hottest housing market” by the Wall Street Journal as recently as 2021, with transplants fleeing crowded metro areas such as Seattle and Los Angeles for the great outdoors, including a lake National Geographic once called one of the five most beautiful in the world. In 2023, however, Veros said it expects housing prices there to plummet by 5%, putting Coeur d’Alene ninth on its list of the ten worst housing markets in America for this year.

Coeur d’Alene residents won’t be alone in their suffering, Veros said. For the first time since 2012, the data provider expects home prices nationwide to fall. Nationally, Veros predicts homeowners will see the value of their nest eggs drop by 0.5%.

Among the metropolitan areas expected to bear the brunt of the housing correction are locations that boomed during the pandemic shift to remote work. St. George, Utah, and Provo, Utah, take the first and second spots on the list.

Veros’ prediction shows the effect higher mortgage rates are having on housing prices. After nearly three years of double digit appreciation, the rise in the cost of 30-year mortgages to nearly 7.5% percent from under 4% has finally put the brakes on a housing market that Federal Reserve Chairman Jerome Powell said needed a “reset.”

“Many markets which were the big housing market winners of the past year or two are now forecast to be some of the worst-performers,” said Veros chief economist Eric Fox. Those include San Francisco and San Jose, California; Seattle; Las Vegas; Austin, Texas; and Boise, Idaho. “These markets are all expecting depreciation over the next 12 months, which will range from -5% to -7%.”

California, Idaho and Utah have the dubious honor of placing two cities each in the bottom ten. Nine spots belong to cities that lie west of the Mississippi River.

North Carolina will buck the trend, Veros said, dominating Veros’ strongest-performing markets list, accounting for five of the top ten spots. Fayetteville, home to the biggest military base in the U.S., comes in at number one, with Veros predicting a 6.1% rise in home prices.

Here’s another surprise in Veros’ data. Fort Myers, Florida, which Hurricane Ian leveled in October, is expected to be one of the best-performing markets this year. The record-breaking storm did little to discourage snowbirds and retirees from looking to relocate to its sunny beaches while putting a dent in the home stock.

Veros’ Fox said a 2008-style collapse of the U.S. property market isn’t in the cards.

“Though average depreciation is expected now, the fundamentals of the U.S. housing market in 2023 are much better than they were a decade ago,” Fox said. “This is not going to be a repeat of what we saw in 2007-2008.”