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Home prices face long, slow recoveryExperts can see a light at the end of the tunnel — but it's a long tunnel.
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15 cities where home prices are still plummeting
By Melinda Fulmer of MSN Real Estate
A stagnant economy and a huge number of distressed properties have wreaked havoc on U.S. home prices. Some markets, however, are taking a much larger hit than others, due to overbuilding, speculation, loose lending and pumped-up values. Nowhere was that more evident than Modesto, Calif., where prices have dropped 56% from their peak in the first quarter of 2006.
But Modesto had plenty of bad company, according to Local Market Monitor. Here are the metro areas with the biggest drops in home prices since the fourth quarter of 2009 and a generally bleak outlook for the year ahead.
NOTE: Average home prices are as of the fourth quarter of 2010; price change is from Q4 '09 to Q4 '10; and employment statistics reflect March numbers.
Read: Housing prices face long, slow recovery
Slide show: 15 cities with the most improvement in home prices
15 cities where home prices are still plummeting
1. Reno-Sparks, Nev.
Population: 414,784
Average home price: $183,000
Home price decline: 10%
12-month home price forecast: -3%
With very little, if any, job growth and a huge supply of distressed properties, this market stands on shaky ground. While a 10% dip in prices over the past year doesn't sound too extreme, it caps years of free fall, with prices down 46% from their peak in 2006. LMM expects prices to decline in this market through the second quarter of 2013.
- Bing Cube: View images of Reno
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
2. Boise-Nampa, Idaho
Population: 599,753
Average home price: $157,600
Home price decline: 10%
12-month home price forecast: -2%
The outlook isn't as pretty as the scenery in Boise, the capital, with unemployment of 10.1% due to job losses in the construction and information-technology sectors. Although Boise has regularly been voted a livable city, home values here are down 30% from their peak in the second quarter of 2007.
- Bing Cube: View images of Boise
- Video: Bet on a housing recovery?
- What's your home worth?
15 cities where home prices are still plummeting
3. Lakeland-Winter Haven, Fla.
Population: 580,594
Average home price: $135,000
Home price decline: 9%
12-month home price forecast: -3%
This area of many lakes, midway between Tampa and Orlando, is saddled with a high level of unemployment as construction jobs have left. At the same time, overbuilding during the boom left the market saddled with a high number of foreclosures. Homes here have lost 38% of their value since the market's peak in the fourth quarter of 2006. More than half of residents are underwater on their mortgages.
- Bing Cube: View images of Lakeland
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
4. Phoenix-Mesa-Scottsdale, Ariz.
Population: 4.3 million
Average home price: $170,000
Home price decline: 9%
12-month home price forecast: -3%
Real estate got way too hot in Phoenix during the mid-2000s. Overbuilding, soaring prices and rampant speculation by California investors caused this city's bubble to burst in a spectacular fashion. It has one of the country's top foreclosure rates, and bank-owned properties will continue to hold down prices in this city through 2013.
- Bing Cube: View images of Phoenix
- Video: Bet on a housing recovery?
- What's your home worth?
Find homes for sale in Phoenix
Read: Housing prices face long, slow recovery
Slide show:
15 cities with the most improvement in home prices
15 cities where home prices are still plummeting
5. Orlando-Kissimmee, Fla.
Population: 2.1 million
Average home price: $175,900
Home price decline: 8%
12-month home price forecast: -2%
Orlando may boast world-class tourist attractions and recreation, but its real-estate sector leaves a lot to be desired. An overheated market – prices rose by more than a third during one boom year – sprawl and high unemployment have left the city with more than its fair share of foreclosures. Homes here have lost 41% of their value on average since the market's peak in the first quarter of 2007. Prices are not expected to stabilize until 2013.
- Bing Cube: View images of Orlando
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
6. Jacksonville, Fla.
Population: 1.3 million
Average home price: $194,200
Home price decline: 7%
12-month home price forecast: -4%
Jacksonville was one of the fastest-growing cities in the country during the past decade, but its job-growth engine has come to a virtual standstill. Information-sector jobs, in particular, are down 5% in the last year. Prices in this northern Florida beach city are down 29% from their peak in the second quarter of 2007.
15 cities where home prices are still plummeting
7. North Port-Bradenton-Sarasota, Fla.
Population: 687,823
Average home price: $189,500
Home price decline: 10%
12-month home price forecast: -1%
Prices have been declining rapidly in this market because of rampant overbuilding and speculation. Indeed, 23% of its housing stock is vacant, according to Census Bureau figures. While the pace of decline is moderating, it will be 2013 before prices stabilize here, according to LMM.
- Bing Cube: View images of Sarasota
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
8. Pensacola-Ferry Pass-Brent, Fla.
Population: 452,992
Average home price: $180,900
Home price decline: 7%
12-month home price forecast: -6%
Values in this Panhandle city were hit hard not only by the real-estate bust, but also by the BP oil spill, as more people put off purchases because of concerns about oil washing ashore on its beaches. Prices declined by 7% in each of the past two years and aren't expected to spring back until 2014.
15 cities where home prices are still plummeting
9. Tampa-St. Petersburg-Clearwater, Fla.
Population: 2.73 million
Average home price: $163,900
Home price decline: 7%
12-month home price forecast: -3%
When the Republican National Convention rolls into Tampa next year, the city's sputtering economy is sure to be a focus of much political rhetoric. Unemployment is high, at 11%, and homes here have lost 37% of their value since the market's peak in the fourth quarter of 2006. Don't hold your breath for a real-estate rebound; it's not expected until 2014.
- Bing Cube: View images of Tampa
- MSN Money: Signs your home value could fall
Read: Housing prices face long, slow recovery
Slide show: 15 cities with the most improvement in home prices
15 cities where home prices are still plummeting
10. Tacoma, Wash.
Population: 785,639
Average home price: $237,600
Home price decline: 6%
12-month home price forecast: -4%
Tacoma came late to the real-estate bust, with prices not peaking until the fourth quarter of 2007. But bust it has, with prices down 22% from that period. This market is not expected to begin recovering until 2014, in part because unemployment remains high at 10.7%
- Bing Cube: View images of Tacoma
- Video: Bet on a housing recovery?
- What's your home worth?
15 cities where home prices are still plummeting
11. Tucson, Ariz.
Population: 1.01 million
Average home price: $180,400
Home price decline: 6%
12-month home price forecast: -3%
The economy in this livable city, one hour from the Mexican border, has struggled in the past year. There was a 9% drop in information-sector jobs over the last year, and home prices are down 28% from their peak in the fourth quarter of 2006. They will continue to suffer until 2014, LMM predicts.
- Bing Cube: View images of Tucson
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
12. Las Vegas-Paradise, Nev.
Population: 1.87 million
Average home price: $140,700
Home price decline: 6%
12-month home price forecast: -2%
Speculators and high-roller residents playing with the bank's money pumped this market up to unsustainable levels during the real-estate boom. Now it's dealing with the nation's highest foreclosure rate and a lot of vacant properties. While some parts of the city are faring better than others, LMM doesn't expect real price appreciation here until 2014.
15 cities where home prices are still plummeting
13. Deltona-Daytona Beach-Osmond Beach, Fla.
Population: 498,036
Average home price: $150,400
Home price decline: 6%
12-month home price forecast: -2%
The trifecta of high unemployment, overbuilding and foreclosures punished this beach city's home values. Prices have slid 41% from the market's peak in the third quarter of 2006. Agents in this city say they think retiring baby boomers will lift its fortunes. LMM predicts price appreciation to return in 2014.
- Bing Cube: View images of Daytona Beach
- MSN Money: Signs your home value could fall
15 cities where home prices are still plummeting
14. Modesto, Calif.
Population: 510,694
Average home price: $142,100
Home price decline: 6%
12-month home price forecast: -2%
This Northern California town was voted by Forbes magazine as one of its "most miserable cities." There's a lot wrong with it, to be sure. Unemployment stands at 18.4%, homes here have lost more than half their value since the peak in the first quarter of 2006 and foreclosures dominate the landscape. To make matters worse, there are more car thefts per capita in Modesto than anywhere else in the country.
- Bing Cube: View images of Modesto
- Video: Bet on a housing recovery?
- What's your home worth?
15 cities where home prices are still plummeting
15. Fresno, Calif.
Population: 909,153
Average home price: $169,800
Home price decline: 6%
12-month home price forecast: -2%
This city in California's San Joaquin Valley has suffered one of the nation's highest rates of foreclosure. Loose lending and rapidly inflating prices led many residents into properties they couldn't afford. Now the agricultural center has one of the nation's highest foreclosure rates, and unemployment has reached 18.4% as farm hiring has slowed.
- Bing Cube: View images of Fresno
- MSN Money: Signs your home value could fall
Read: Housing prices face long, slow recovery
Slide show: 15 cities with the most improvement in home prices
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