5. Las Vegas-Paradise, Nev.
> Foreclosure rate: 1 in 95.9 housing units
> Avg. sale price (foreclosed homes): $122,987
> Avg. sale price (nonforeclosed homes): $145,079
> Foreclosure sales as pct. of total: 44.7%
The Las Vegas metro area has been crushed by the housing downturn with home prices falling 60.8% between the first quarter of 2007 and the same quarter in 2012, nearly double the national rate. Improvement is not on the horizon either, with home prices expected to fall an additional 7.9% in 2012 and 1.1% in 2013. Since home prices dropped so much in the region, a foreclosed home is not sold at as much of a discount as in other parts of the country. While the average home buyer in the U.S. can expect a 31.7% discount on a foreclosed home, a home buyer in the Las Vegas area can only expect a discount of 15.2%. To make matters worse, the Las Vegas May 2012 unemployment rate was 11.8%, well above the 8.2% national rate. This could hamper a strong housing recovery in the region.
Also Read: America’s 10 Disappearing Jobs
4. Phoenix-Mesa-Scottsdale, Ariz.
> Foreclosure rate: 1 in 92.1 housing units
> Avg. sale price (foreclosed homes): $144,235
> Avg. sale price (nonforeclosed homes): $191,263
> Foreclosure sales as pct. of total: 33.46%
After peaking in the second quarter of 2006, home prices in the Phoenix area fell by 52.7% through the first quarter of 2012. These huge price declines have made the area’s housing market very popular with homebuyers, who bought 39,531 homes in the second quarter of 2012, the third highest number of sales among all metro areas in the U.S. One third of these homes were foreclosed properties, selling at an average discount of 24.6% to the average price of homes not in foreclosure. Though foreclosed homes are already cheap, selling at less than the $170,040 nationwide average for such properties, area home prices are expected to fall by an additional 9.5% in 2012. In the first quarter the median mortgage payment in the area cost 11% of median family income, down from 28.4% when prices were at their peak.
3. Sacramento-Arden-Arcade-Roseville, Calif.
> Foreclosure rate: 1 in 90.3 housing units
> Avg. sale price (foreclosed homes): $185,565
> Avg. sale price (nonforeclosed homes): $251,888
> Foreclosure sales as pct. of total: 45.49%
Of the 13,327 home sales in the Sacramento metro area during the second quarter, 22% were repossessed properties, while another 23.4% were in the preforeclosure process. But the discount of 26.3% in buying a foreclosed home is slightly less than the 31.7% discount across the U.S. Sacramento’s unemployment rate of 10.8% as of May 2012 was far above the national rate of 8.2%, which could hinder housing growth in the near future. While home prices are expected to fall 2.2% in 2012, more than the national drop of just under 1%, prices are expected to rise by 8.1% in 2013, better than the 5% price growth expected across the country.
2. Atlanta-Sandy Springs-Marietta, Ga.
> Foreclosure rate: 1 in 87.6 housing units
> Avg. sale price (foreclosed homes): $106,042
> Avg. sale price (nonforeclosed homes): $181,952
> Foreclosure sales as pct. of total: 44.7%
With one of the nation’s highest foreclosure rates, it may not come as a shock that 44.7% of the homes sold in the Atlanta-Sandy Springs-Marietta area in the second quarter were foreclosed properties. Of these foreclosure sales, 7,814 were repossessed property — the most in the nation. One likely reason these properties were so popular was their price; the average foreclosed home could be purchased for $106,042 — a 41.7% discount to the price of a nonforeclosed home. Bank-owned homes were even less expensive; $100,220 on average — a 44.9% discount to the average sales price of nonforeclosed homes. Affordable property in the Atlanta area is not limited to foreclosed properties. After home prices fell 38% between the first quarter of 2007 and the first quarter of 2012, the area’s median mortgage payment cost just 7.3% of median family income — one of the smallest rates in the country.
1. Riverside-San Bernardino-Ontario, Calif.
> Foreclosure rate: 1 in 68.3 housing units
> Avg. sale price (foreclosed homes): $179,762
> Avg. sale price (nonforeclosed homes): $225,000
> Foreclosure sales as pct. of total: 47.23%
Of all home sales in Riverside-San Bernardino-Ontario in the quarter, 21.4% were sales of repossessed properties, much higher than the 11.9% nationwide. In addition, a whopping 25.9% of home sales in the second quarter of 2012 were preforeclosure sales, significantly higher than the 10.9% nationwide. It is not hard to see why: home prices dropped by 54.9% between the first quarter of 2007 and the first quarter of 2012, much faster than the 33.3% drop in home prices nationwide. Home prices in the area are expected to fall an additional 6.3% in 2012, well more than the 1% drop across the country. The high unemployment rate of 12.2% in the region as of May — well above the national rate of 8.2% — is likely to continue to burden the housing market for some time.
-Sam Weigley, Michael B. Sauter and Alexander E.M. Hess
