Is real estate fixing to crash in the East & West US?

[GilesMM]

Seems like all the previously trendy spots (e.g. Tampa, Austin, Phoenix, San Fran) are cooling, while the flyover country spots (Louisville, Cleveland, Buffalo, Detroit) are booming. I wonder if this reflects a migration trend, or just the bigger effects of higher mortgage rates on the most expensive places?

All real estate is local. Austin, for example, iis still hotter than ever but the city successfully permitted a lot of building so prices have backed off a bit from their huge bubble. Tampa may be driven by condo insurance issues. Each place is specific and many complex factors involved.

[Paper Chaser]

Seems like all the previously trendy spots (e.g. Tampa, Austin, Phoenix, San Fran) are cooling, while the flyover country spots (Louisville, Cleveland, Buffalo, Detroit) are booming. I wonder if this reflects a migration trend, or just the bigger effects of higher mortgage rates on the most expensive places?

I doubt there's much meaningful migration change. Maybe some outward migration from FL with it's insurance issues. In general I think the hottest places saw tons of money pouring in over the last few years. Some of that demand was organic as people moved there, but some was from investors too. Phoenix, Austin, Miami, Eastern TN, etc were all hot beds of Short Term Rental investment that are now seeing declines. These real estate investors stoked demand beyond what it might naturally be, making builders salivate at the prospects so they started new builds. When interest rates jumped, the investments looked a lot worse so demand fell off just as the New Builders were finishing their projects and adding to the supply. Supply has gone up in response to demand that was a bit more fickle than many people realized. If there's true demand for housing in an area, that seems relatively stable to me. Moving into or away from a location takes way more effort than an investor deciding to avoid further investment in a location or sell a current one because the math doesn't work.

Most of flyover country avoided the manic demand spike and outside investment so their supply levels remain more balanced with demand.

[Jaybo]

I don't recommend this for obvious reasons, but in the case of those using their VA loan, under certain conditions lenders will actually go as high as 50% debt-to-income ratio.  The conditions vary for each lender; when we bought our primary residence our lender told us we could go that high, but yeah, thanks but no thanks, that's a recipe for disaster.

[Jaybo]

Anecdotally I've also noticed political "refugees" moving to these areas, as some states infringe upon health care for women and various LGTQI+ issues. These are fairly new issues that impact people day to day and may not follow a past pattern so the models might look different than in the past. But I'm not an expert on the subject, I just know it was a consideration for our move and others we know.

The red dots on the map do align well with areas with high concentrations of Democrats.

Possible interpretations:

• Republican leaning areas are adding supply faster due to regulatory / zoning differences, or have more room to sprawl.
• Democrats are still trying to migrate away from the consequences of national politics, piling into the last remaining "blue" enclaves.

I could definitely see the truth in this.  Its well-known here in Idaho that doctor's and other medical professionals are fleeing Idaho in DROVES.  They have had several small hospitals have to close their maternity wards/labor and delivery because the doctors left and St. Al's and St. Luke's, the two hospital systems that own nearly all the hospitals in Idaho are struggling to hire and specifically cited the state's abortion laws and other issues related to healthcare.  A St. Luke's recruiter said they are having to offer at minimum 140% of typical salary plus all relocation expenses to even get people interested in coming here to practice.