Boomer’s Blog

Forbes.com has surveyed the 40 largest U.S. metropolitan areas and aggregated various data on foreclosure listings, job growth, transaction volumes, vacancy and current inventory rates to build a list of the 10 most ominous real estate markets in the nation.

1. Detroit, Mich.: Here, foreclosures are five times the national average, jobs are few and people are moving away in droves; the economy continues to suffer.
2. Orlando, Fla.: This market has a 7 percent vacancy rate, despite job growth in the past few years. Analysts predict negative growth for this market in 2008.
3. Cleveland, Ohio: Here, a 3 percent foreclosure rate ranks the sixth worst in the U.S. Also, there has been no significant job growth recorded since mid-2006. when the rate rose only 0.1 percent.
4. St. Louis, Mo.: Market values here dropped 20 percent from 2006 to 2007. This year, the foreclosure rate has surpassed 1 percent and job growth continues to stall. Analysts say that the sharp declines, and rock-bottom prices are likely to reduce recovery time — if the local economy holds up.
5. Miami, Fla.: Foreclosures here are the eighth highest in the U.S. and construction-fueled job growth has suffered hard hits in the past two years.
6. Las Vegas, Nev.: Despite stellar construction-based job growth in 2004 — 2005, growth in the past two years has been flat. Dangers here include rising foreclosure rates, high inventory, and threats that the overall economy will worsen.
7. Sacramento, Calif.: Ranked the fifth worst foreclosure market in the U.S. Beyond the 3 percent foreclosure rate, this market also suffers from jobs losses as as the construction-powered economy tapers off. But transaction volumes are up, even if prices are down. Way down. Here, desperate homeowners have set records with their agressive price reductions.
8. Denver, Colo.: Despite strong economic growth over the past four years, and a $240,000 median home price, Denver has experienced 50,000 foreclosures, or nearly 3 percent of the market, thusly earning the ninth-worst foreclosure rate in the nation. This market’s saving grace is reported job growth at three times the national average.
9. Tampa, Fla.: Although this market continues to add residents and remains a popular destination for retirees, inventory remains high and dismal growth in the service-oriented job market doesn’t seem to be helping.
10. Phoenix, Ariz.: With an economy supported by the construction industry and overbuilding, there are 53,000 homes reportedly on the market. This sky-high inventory is five times the 2005 rate, and homes aren’t selling anywhere close to asking prices. Besides holding one of the highest foreclosure rates in the nation, the distressed Alt-A and sub prime loans aren’t contained within one single area as is typical among large metropolitan locales.

Note: These data were culled from the following sources to create the list, which bears more bad news for cities already suffering from high foreclosure rates, job growth stagnation and dwindling tax revenues: Foreclosure listing service; RealtyTrac; job growth: U.S. Bureau of Labor Statistics; transaction volume data: Radar Logic; current inventory rates: U.S. Census Bureau; and multiple listing service (MLS) data: ZipRealty.

Tags: Alt-A, foreclosure listings, job growth, MLS, Radar Logic, RealtyTrac, transaction volumes, U.S. Bureau of Labor Statistics, U.S. Census Bureau, ZipRealty

This entry was posted on Wednesday, April 2nd, 2008 at 12:31 pm and is filed under Market News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.