The Sickest Housing Markets in America
It would be true to say that US housing markets are recovering but the story is not the same all around the country. In fact, data released in early September indicate that home prices in metro areas all around the country went up for the fourth time in five months.
Some markets are still yet to see any significant change in terms of increased demand or higher home values or asking prices. In some areas, this is because the housing bubble has burst while in others, the problem has been a long term one. This article lists the sickest housing markets in America.
According to the report, the five worst markets are in the state of California specifically in Sacramento, San Diego and the metro region of Riverside-San Bernardido-Ontario. Toledo, Ohio and Virginia Beach, Va are also still dragging behind. In all these areas, home prices have been on the decline since January 2011 with the trend carrying on in the first half of 2012.
The vacancy rates in these areas have remained high which points at a lack of interest. The five housing markets are listed among the 25 that the highest rates of home vacancies for purchase as well as for rent. Virginia Beach and Riverside are in fact ranked in the top 15 while Toledo has the highest rate of home vacancies in the whole country at 5.6 percent. Such ratings contribute to lowering home values.
The woes of these regions started with the bursting of the housing bubble which saw home values come crashing down. Foreclosures and negative equity also contributed to the state of the housing markets in these areas. Other factors are a limited job market and very little economic growth in the regions.
Data from the US Census Bureau home and rental vacancy that includes 75 of the largest metropolitan areas in the country in the first quarter of 2012 gave the following statistics on these regions.
In Sacramento-Arden-Arcade-Roseville California,the average annual list price has declined by 7.2 percent. The rental vacancy is 6.8 percent and the homeowner vacancy is 2.5 percent. Asking prices for homes went down by 4.1 percent in June 2012 compared to June 2011. After home prices spiked in the last part of 2005, they lost their value by a drastic 54.7 percent which is the sixth worst drop in the largest markets in the country.
The story is the same in Virginia Beach-Norfolk-Newport News, Va where the average yearly list price saw a 3.4 percent decline. Rental vacancies stand at 6.8 percent and homeowner vacancies at 2.8 percent. Here, prices also peaked in 2007 before plunging down by almost 20 percent. A report released by the office of the area assessor in February, 2012 indicated that there had been a 3.7 percent decline in the value of taxable property in the area that was found to stand at $ 48.7 billion. 79 percent of the properties were found to have declined in value.
San-Diego-Carlsbad-San Marcos is another area of California which housing markets that are still flagging. 3.2 percent is the average annual list price in this area. Rental vacancy is high at 8.6 percent and homeowner vacancy is at 2.7 percent.
Almost 165,000 or about 10 percent of all mortgages here are underwater and the area has some of the highest number of negative equity in the country. Home prices here peaked in 2006 only to come down with a crash by 37.1 percent which represents the 13 largest drop in the country. The biggest problems in the area are all the homes that are underwater and the $20.5 billion negative equity that this has accrued. Valuation of the taxable properties in the area shown a drop in value of 0.14 percent of $395 billion in 2011.
The housing markets in Toledo, Ohio are also going over a rough patch. The average annual list price has declined by 6.8 percent. Rental vacancies are 6.4 percent and homeowner vacancy at 5.6 percent.
In the first part of 2012, the area has seen home values prices decline drastically. During this period, asking prices went down by 11.7 percent. Negative equity is high here as well with 37.5 percent of homeowners in negative equity. It is projected that between the fourth quarters of 2011 and 2012, median home value will fall by 3 percent. If this happens, it will be among the greatest decline ever seen in the country. The home vacancy rate of 5.6 percent that has been seen in the first quarter of 2012 is among the highest in metro areas.
Riverside-San Bernardino-Ontario in California is also not doing well. Home owners here have accumulated $ 41.5 billion in negative equity which is the fifth highest in the market. Unemployment is high at 14.3 percent and 12.3 percent homeowners are 90 days or more late on their mortgages.