10 Housing Markets That May Collapse This Year
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10 Housing Markets That May Collapse This Year

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Ten U.S. housing markets that are predicted to collapse a second time in 2011

Ten U.S. housing markets that are predicted to collapse a second time in 2011

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10 Housing Markets That May Collapse This Year 10 Housing Markets That May Collapse This Year Document Transcript

  • 10 Housing Markets That May Collapse This Year
  • 10. Fort Lauderdale, FL ● Expected price drop: -11.1% ● Median family income: $58,800 (194th highest) ● Unemployment rate: 11.8% ● Median home price: $196,000 (55th highest) ● Projected to hit lowest level: Q2 2013Since 2006, home prices in Fort Lauderdale have dropped by nearly 50%. A full 28% of that dropoccurred in 2009 alone. As was the case throughout most of Florida, the collapse of the housing bubbledecimated the construction-based economy. The unemployment rate of nearly 12% is evident of theconstruction sector’s disastrous decline. The value of the 686,000 homes in the Fort Lauderdale area isexpected to get even worse through at least the second quarter of 2013. Between Q1 2011 and Q1 2012,the median home price is projected to decline an additional 11.1%. Between 2012 and 2013, that numberwill further decrease by 8.7%.
  • 9. Bethesda, MD ● Expected price drop: -11.5% ● Median family income: $114,100 (the highest) ● Unemployment rate: 5.1% ● Median home price: $417,000 (5th highest) ● Projected to hit lowest level: Q3 2012Bethesda, the extremely wealthy D.C. suburb, has the highest median family income in the country— $114,100. It also has the fifth highest median home price, at $417,000. That position may change,however, as Case-Shiller projects home values will drop by more than $60,000 by next year.
  • 8. Salinas, CA ● Expected price drop: -11.8% ● Median family income: $62,100 (145th highest) ● Unemployment rate: 12.8% ● Median home price: $240,000 (34th highest) ● Projected to hit lowest level: Q2 2012Salinas, California, is a small coastal city located 25 miles south of San Jose. Since 2006, the medianvalue of the of the 125,000 houses there decreased in value by more than 61%. This is the fourth biggestdecline from peak home value among all major American cities. More than 40% of this drop occurredin 2009, the year after the housing bubble burst. Unemployment in the city is at 12.8%, well above thenational average of 9.2%. Several companies in the area, including food processing company Romco,expect to continue to lay off workers in the coming months, which should serve to further depress homevalues.
  • 7. El Centro, CA ● Expected price drop: -12.1% ● Median family income: $43,300 (10th lowest) ● Unemployment rate: 28.6% ● Median home price: $130,000 (70th lowest) ● Projected to hit lowest level: Q1 2012El Centro, California, is located five miles from the Mexican border, and is one of the poorest cities inthe country. Median income is just $43,300 per family, the tenth-lowest in the U.S. Unemployment is ata staggering 28.6%. Between 2006 and 2011, home prices decreased by more than 50%. According toa report in the Imperial Valley press, one home was sold in the El Centro area before the recession for$390,000. In 2009, that home was listed at $200,000. Prices are expected to drop an additional 12.1% bythe first quarter of 2012.
  • 6. Miami, FL ● Expected price drop: -13% ● Median family income: $47,800 (32nd lowest) ● Unemployment rate: 13.4% ● Median home price: $175,000 (76th highest) ● Projected to hit lowest level: Q2 2013At 13.4%, Miami has one of the highest unemployment rates of any major American city. Home valuesare above average, but are down by more than 50% since 2006. Partially as a result of the staggeringunemployment rate, the value of the city’s homes are projected to decrease by another 13% by the firstquarter of 2013. What’s more disturbing, prices will then likely fall an additional 10.1%. If this seconddrop occurs, it will be by far the greatest depreciation of property values in the country in an area alreadydecimated by current low prices.
  • 5. Merced, CA ● Expected price drop: -13.2% ● Median family income: $42,900 (8th lowest) ● Unemployment rate: 18.6% ● Median home price: $112,000 (38th lowest) ● Projected to hit lowest level: Q2 2012Merced, California has a median family income of just $42,900, placing it among the ten poorest majorcities in the country. In 2008, the city’s property lost 46.1% of its value. This was the second-greatestdepreciation in home value for a city since at least 1980. The city’s median home prices are expected todrop an additional 13.2% by the beginning of next year.
  • 4. Detroit, MI ● Expected price drop: -13.4% ● Median family income: $49,000 (47th lowest) ● Unemployment rate: 12.7% ● Median home price: $42,000 (the lowest median home price) ● Projected to hit lowest level: Q2 2012Since the recession began, Detroit has been the horror story for plummeting home values, foreclosures,vacancies, and unemployment. To date, Detroit’s median home price of $42,000 is the lowest amongall 385 major metropolitan areas. While the motor city has been languishing for some time before therecession, the drop in home value has been more steady, as opposed to the rapid drop-offs seen in citiesin Florida, Nevada, and California. Detroit’s already record-low values are expected to drop an additional13.4% by the first quarter of 2012.
  • 3. Las Vegas, NV ● Expected price drop: -13.9% ● Median family income: $58,900 (196th lowest) ● Unemployment rate: 12.4% ● Median home price: $140,000 (90th lowest) ● Projected to hit lowest level: Q4 2012Las Vegas was one of the center points of the meteoric growth in the first half of the 2000s, only tobe followed by a catastrophic fall in the second half. Between 2008 and 2011, home prices in the citydropped by 42.3%, the second greatest decline in the country. Although home values in the city arealready more than 58% off their peak, they are projected by Case-Shiller to drop an additional 13.9% byQ1 2012, and then 6.3% more by Q1 2013.
  • 2. Riverside-San Bernardino, CA ● Expected price drop: -15.6% ● Median family income: $59,700 (190th highest) ● Unemployment rate: 13.7% ● Median home price: $181,000 (70th highest) ● Projected to hit lowest level: Q1 2012Like so many industrial cities in California, Riverside-San Bernadino is being affected by the recessionand housing crisis more than most other parts of the U.S. Unemployment has hit 13.7%, home vacancyand rental vacancy rates are high, and home values are plummeting. Median home prices are downmore than 55% from their peak in 2006. By the beginning of next year, prices are expected to drop anadditional 15.6%, or nearly $30,000.
  • 1. Naples, FL ● Expected price drop: -16.6% ● Median family income: $62,800 (137th highest) ● Unemployment rate: 10.5% ● Median home price: $225,000 (40th highest) ● Projected to hit lowest level: Q4 2012Like much of southwest Florida, Naples was one of the fastest-growing communities in the country asit prepared for the millions of baby boomers on the cusp of retirement. When the housing bubble burst,however, the thousands of construction projects for condominiums and retirement communities werehalted or lost money, and home values plummeted. From peak home value in 2006, prices dropped by55%. They are expected to keep falling through next year more than any major city in the country. By Q12012, home values will drop an additional 16.6%, or nearly $40,000.