According to Goldman Sachs, the Phoenix housing market could crash to 2008 levels.

Phoenix Housing Market: In a note obtained by the New York Post, Goldman Sachs predicted that Phoenix, San Jose, San Diego, and Austin, Texas will experience more than 25% declines.

Goldman Sachs predicts that Phoenix home prices will fall to record lows, similar to the 2008 crash.

For nearly a decade, Phoenix has been at the forefront of a thriving housing market. But nothing lasts forever, and that rapid growth may be slowing.

Goldman Sachs predicted more than 25% declines in Phoenix, San Diego, San Jose, California, and Austin, Texas in a note to clients obtained by the New York Post earlier this month.

According to the Post, a 25% drop in home prices would be comparable to the 2008 recession. However, Elliott D. Pollack & Company Senior Economist Danny Court tells 12News that the two eras are not comparable.

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There is no excess housing supply, investors are not buying empty homes, and the market is not flooded with risky mortgages and foreclosures, all of which contributed to the 2008 housing crash.

“We are at all-time lows in terms of foreclosure activity going back 20 years,” Court said.

Court generally agrees with Goldman Sachs‘ prediction of a 25% drop in housing prices, though he believes the drop began last May at the peak of home values and will continue to drop 10%-15% this year.

“We could see a 25% drop from peak to trough,” Court said. “We had such a high price appreciation the last three to five years that we would only be back down to 2021 prices. This is not a housing crash, and it is not comparable to 2008-2009.”

A strong job market, according to Court, is another strong economic indicator.

“When people have a job, they can pay their mortgage,” he explained.

According to Redfin, the median sale price in Arizona in 2022 was $411,000.

Many buyers have been looking for alternatives at these prices, especially as the number of rental units in some neighborhoods has increased by nearly 90%.

Phoenix was at the forefront of a skyrocketing housing market, but if Goldman Sachs‘ predictions come true, it could be at the forefront of the fall.