1/10/2012 2:12 PM ET|
Where home prices are plunging
The country as a whole has seen prices go south, but some cities have been hit harder than others. Here are some of those that have suffered most.
The housing bust came late to Boise, Idaho. While home prices in other cities around the U.S. began their drastic descent in 2007, Boise's home prices didn't feel a price pinch until the end of 2008. Housing in Idaho's capital wasn't hit particularly hard by the subprime mortgage crisis, but it certainly was affected by the economic downturn. High unemployment and a wave of unemployment-related foreclosures have caused home prices in the City of Trees and its surrounding suburbs to plunge.
In 2011 alone, Boise homes suffered a drastic 13.4% loss in value. This year isn't likely to offer relief, with prices projected to slip an additional 2.5%. These drops landed Idaho's capital on our watch list of "Cities Where Home Prices Are Falling Dangerously."
"Prices in Boise proper, specifically, haven't come down quite as much as people expect, but in other areas around the city, prices have come down as much as 50% from where they were a few years ago," says Cristina Pescaru, an agent with Gold Key Real Estate in Boise. "I think we absolutely haven't seen the bottom of the market here."
The folks at Local Market Monitor, a real-estate research company in Cary, N.C., compiled a list of the cities that suffered relatively big home price hits in 2011, with more projected through the next 12 months. The researchers sifted through market data for more than 300 metropolitan statistical areas and metropolitan divisions, as defined by the U.S. Office of Management and Budget. The company, which releases quarterly housing market reports, crunched home prices from October 2010 through September 2011 and calculated price projections through September of next year. For its projections, Local Market Monitor took into account job growth and unemployment rates, population growth, sales and rental prices, and something called "equilibrium home price," which is a gauge of where the average home price should realistically lie based on economic data, versus where it actually is.
Every one of the 13 markets that made our list suffers from a glut of foreclosures. "Foreclosures are continuing to weigh down home prices in hard-hit foreclosure markets as the average sales prices of foreclosure-related sales drop," explains Daren Blomquist of RealtyTrac, a foreclosure listing site. Cities that made our list, such as Phoenix and California's Stockton, Fresno and Bakersfield, also rank among RealtyTrac's top 20 metro areas for foreclosure rates. Fifty percent or more of all completed home sales this year in these cities were distressed (either pre-foreclosure or bank-owned) -- a factor that pulls down the prices of nondistressed homes both in terms of appraisals and home sellers' efforts to compete for buyers.
Not surprisingly, the nation's foreclosure capital, Las Vegas, experienced the worst price drops of any major metro last year. The Sin City's home values slid 15.2%, compared with 2010, and Local Market Monitor expects an additional 5% drop in 2012. More than half of all completed sales were distressed.
Another foreclosure-studded state where home prices continue to get hammered is Florida. Orlando and Jacksonville lost 11% and 9% of their home values in 2011, respectively, with 9.4% and 7.7% losses predicted in 2012. The metropolitan division that includes West Palm Beach also landed on our list. Despite close proximity to posh Miami Beach and Palm Beach, where higher-end sales were frequent last year, the less-expensive West Pam Beach area continued to struggle.
Ingo Winzer, the founder and president of Local Market Monitor, says two things are driving the dive in Sunshine State markets: too much inventory and too few jobs. Construction backstopped a sizable chunk of Florida's local economies, as developers built spec homes for an anticipated deluge of baby boomer snowbirds who, thanks to the current economy, have yet to retire. "First, a lot of homes were built, maybe more than should have been built, and second, while population growth in Florida will eventually sop up those properties, right now there's no work, so we have large numbers of homes sitting empty . . . causing prices to fall," he says.
There is some hope to be had by owners located in other cities across the country: The home price hemorrhages nearly every market experienced in the past several years are subsiding. Nationally, prices dropped only about 4.5% last year. Compared with the roughly 35% loss the U.S. housing market as a whole has taken since the economic downturn, 2011's drop, while agonizing, means the free fall is over.
"A lot of markets are still going to have some problems economically, but overall I think in most of the country's cities, we are seeing a bottom in home prices," says Winzer. He cautions that a bottom in no way translates to a speedy price recovery. Rather, he expects prices to hover at these lower levels for years.
|13 cities where home prices are falling dangerously|
|Metro Area||Home price drop from Oct. 2010 to Sept. 2011||Projected price drop through 2012||Average home price|
|Atlanta-Sandy Springs-Marietta, Ga.||-8.5%||-8.3%||$170,800|
|West Palm Beach-Boca Raton-Boynton Beach, Fla.||-8.5%||-8.7%||$211,000|
|Boise City-Nampa, Idaho||-13.4%||-2.5%||$139,000|
|Las Vegas-Paradise, Nev.||-15.2%||-5.1%||$121,900|
Source: Forbes.com, Local Market Monitor
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How the hell can our gov't allow these people to profit and pay out huge bonuses while I went to school, have a degree and a family and doing it all on $40k
We will rebuild Iraq before we rebuild our own. No need to cry because few of us will demand better leadership, but many will stand in line for hours to get the next I Phone, I Pad, X this X that. We are now paying off $100.00 per bag of laundry for our troops that were in Iraq, (No kidding, a $3.00 cleaning bill, but we pay $100.00 for it). The money that was over charged for things like this could have helped every community with Jobs, and more in our country, many times over. Let’s open our eyes.
People keep eating and eating more than they need to, and then wonder why they are obese. Subsequently, they want someone to run in and fix their problem. Money works the same way, as you can't grossly take more than you need and/or can handle, and expect not to have a problem.
Now we sit around waiting for someone to run in and fix our problem again. We need to break the cycle people, I hope as a whole we all learn from this...
To the genius who said it started with BUSH. The mess started during the clinton regime. Barney Frank and Chris Dodd and the bleeding hearts who thought, everyone (mainly minorities) deserve a house. The legislation was passes to pressure the banks to make substandard loans all the way back then and took all that time to progress to the mess we have now. Frank and Dodd are at the heart of the mess. People getting their feelings hurt if the weren't able to qualify for loans they should not have been given in the first place, So the banks started giving sub prime loans. When the economy tanked so did the housing industry. How long can the Libs keep blaming stuff on Bush....And the current bozo in office has not been able to turn things around for the better....The smoke and mirrors are NOT working and will stop totally in November 2012...How's the hope and change working now??? worse than ever Obama is a joke along with the rest of the politicians that claim they are FOR THE PEOPLE...Time to get the clowns out of office in the whole country...I can't wait till November.................
Ironically the spell check for this page has a correction for Obama..........it is Osama
Until we get the employment rate down we will see this type of housing market. My kid has moved back home because the job market is a disaster. I am sure this scenario is repeated numerous times around the country. Instead of moving out and investing in a home they are moving back home. The seniors are down sizing and flooding the market with the larger homes further reducing the prices. If the government really was worried abou the average Joe they would reduce regulations and get the companies to invest in the US markets. I'm not holding my breath that they would every do that so I guess a salamander is more important than people.
Just beginning to look at real estate , and for all you who think there is a single person to blame are kidding yourselves.
The realtors are just as much to blame as are banks. There is one I met who is pumping the prices up and up, Sellers wanted to sell at 130 (about 5 more than it is worth) but the realtor
pushes it to 149 and wants higher prices for the next round when she can go to 159, then 169, these people are trained at tactics of intimidation and relentless control. They are every bit a part of the housing crisis. I looked at a shoebox in Lansing, mi, built in 1940s that sold for 107,000 any realtor that let that happen was insane. The house went to foreclosure and probably should be condemned.
Now that they're hit with reality and the house comes back down to the right price, the buyer is underwater and forecloses. If the home owner wasn't greedy or feared that it would go up higher, then the buyer should have waited and just rented. I don't feel sorry if it was an investor that lost money since it was GREED that drove him/her to buy in the first place and driving up prices.
If you're a home owner before the bubble, you have gained or not lost anything. If you bought during the bubble, you should've waited but you haven't really lost anything and should not worry if you can still make the payments and not needing to sell. Buying a place should be a lifestyle/job choice and NOT an investment choice. You should be planning to stay there for many years, even when you don't have a job/not working and still be able to afford it.
People should NOT have refinanced to take out equity/money. Your home is not a piggy bank but a place to live.
If you have been foreclosed, look at the bright side. You didn't have to pay rent for all the time you owned the place and during the foreclosure process, you lived there without paying for many many months and some even years. If you count that money saved on rent and the months that you didn't pay, you may not have lost any money but may have gained instead. For example, it may have cost you $50K in rent for all those years while it may have cost you only $45K in down-payment, mortgage payments, property taxes, etc. (some of which are tax deductible). You came out ahead of the renters who acted responsibly and didn't buy.
I feel bad for those that lost their job and got foreclosed through no fault of their own. However, if you had acted responsibly and rented instead of buying, you would not have been in any mess. I'm not worried about prices dropping since I'm not planning to sell for many many years. I'll always need a place to live.
Robert kennedy spoke out against retro active immunity..."QUOTE" (The very idea of "retroactive immunity" ... is so radical, so repugnant to the most basic principles of the "rule of law," that only one prior attempt can be found in recent history (at least from my research): the efforts by some in Congress (in 1965) to enact a law retroactively legalizing the mergers by six large banks which clearly -- as a federal court found -- were illegal under our nation's antitrust laws.
The banks knew when they merged that they were almost certainly violating anti-trust laws. But they did it anyway. And when courts began ruling that their behavior was illegal, they ran to Congress to demand that a law be passed granting them amnesty, claiming that the consequences would be ruinous if they were held accountable under the law. ) But the very concept of retroactive amnesty, the idea that corporations could break the law and then have Congress pass a special law legalizing their lawbreaking conduct, was so profoundly offensive to Sen. Robert Kennedy (who had been the Attorney General when the banks broke the law with their mergers), as well as then-Attorney General Nicholas Katzenbach, that they engaged in extraordinary efforts to try to put a stop to this Congressional travesty.when the banks broke the law with their mergers
Robert Kennedy could not stop them. (too big to fail)
HISTORY OF RETRO ACTIVE IMMUNITY IN THE UNITED STATES
1. given for illegal use of torture
2. given for illegal merger of banks ( we can see the effects of that now )
3. given to telecom company for illegal wire taps. (Fisa bill that led to the patriot act)
4. given to Judges for taking bribes. (SBX211)
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