5. Vallejo-Fairfield, Calif.
> Decline in home prices (peak to Q1, 2012): -60.1%
> Unemployment rate: 10.2% (56th highest)
> Median home price: $200,000 (47th highest)
> Foreclosure rate: 1 in 71.4 housing units (4th highest)
The Vallejo-Fairfield California metro area home price drop of more than 60% since the first quarter of 2006 was the sixth-worst decline during the housing market collapse of the 384 regions measured by Fiserv. Despite the decline, the area’s median home price was still in the top 15%, largely because the area contains California’s famous wine region, Napa Valley. Median family income was among the top 40 in the country at $76,100. Despite this, one in every 71.4 homes was in foreclosure as of the second quarter of this year, the fourth-highest rate in the country.
4. Las Vegas-Paradise, Nev.
> Decline in home prices (peak to Q1, 2012): -61.6%
> Unemployment rate: 11.7% (32nd highest)
> Median home price: $137,000 (79th lowest)
> Foreclosure rate: 1 in 95.9 housing units (11th highest)
No metropolitan area outside California has seen as large and unabated a home price decline as Las Vegas. While home prices in other metro areas on this list are expected to improve in the near future, home prices in Las Vegas are projected by Fiserv to decline through at least the first quarter of 2014. Home prices in the area are already low enough that the average discount for purchasing a foreclosed home was just 15.2%, less than half the 31.7% average discount nationwide.
3. Stockton, Calif.
> Decline in home prices (peak to Q1, 2012): -62.8%
> Unemployment rate: 15.0% (12th highest)
> Median home price: $170,000 (76th highest)
> Foreclosure rate: 1 in 66.2 housing units (the highest)
When Stockton filed for bankruptcy in June, it became the largest-ever U.S. city to do so, according to The Wall Street Journal. The city’s economy has been plagued for years by constantly falling home prices, which declined at an annualized rate of 16.6% between the first quarter of 2007 and the first quarter of 2012. Stockton also has one of the nation’s highest unemployment rates of 15%, and a foreclosure rate that leads the nation with one in every 66.2 homes in foreclosure. Though Fiserv projects home prices will rise at an annualized rate of nearly 6% between the first quarter of 2012 and the first quarter of 2017, the housing market remains weak: 54% of all second-quarter home sales were foreclosure sales, and the number of property listings in July were down more than 40% year-over-year.
2. Modesto, Calif.
> Decline in home prices (peak to Q1, 2012): -64%
> Unemployment rate: 15.7% (9th highest)
> Median home price: $139,000 (83rd lowest)
> Foreclosure rate: 1 in 68.7 housing units (3rd highest)
Over the past five years Modesto’s median home price has fallen from 7.5 times median family income to just 2.5 times median family income. Though homes in the area have become more affordable, such price declines have devastated present and current homeowners. The area had the third-highest foreclosure rate in the nation at slightly higher than one in every 69 homes, and 57% of all homes sold were foreclosed properties. In few places has the economy been weakened by a housing collapse more than in Modesto, where the unemployment rate stood at 15.7%, the ninth highest rate nationwide.
1. Merced, Calif.
> Decline in home prices (peak to Q1, 2012): -69.7%
> Unemployment rate: 17.8% (4th highest)
> Median home price: $110,000 (32nd lowest)
> Foreclosure rate: 1 in 90.3 housing units (8th highest)
Nowhere in the U.S. have home prices taken the beating they have in Merced where the median price of a home has fallen at an annualized rate of 19.2% in the past five years, the highest rate in the country. Sadly, prices are not expected to begin to rise in 2012, as Fiserv predicts home prices will fall another 4.4% between the first quarter of 2012 and the first quarter 2013. Though home prices were possibly overvalued at their peak, when the median mortgage payment cost 51% of monthly income, they would appear to be undervalued now: the median mortgage payment costs just 10% of monthly income. The decline in home value has been especially costly for some homeowners, as one in every 90.3 homes was in foreclosure and 55% of all home sales were foreclosure sales. The massive decline in home prices has also caused significant damage to the local economy — the unemployment rate in Merced was 17.8%, higher than almost all other metropolitan areas.
-Michael B. Sauter and Alexander E. M. Hess