10. Sacramento–Arden-Arcade–Roseville, Calif.
> Pct. distressed sales: 25.4%
> Unemployment rate: 8.2%
> Pct. change in home prices: 22%
More than one-quarter of Sacramento area homes sold in December were distressed, versus slightly more than 16% nationwide. Additionally, 18.6% of home sales were foreclosure-related, meaning they involved either a bank-owned property or a sale at a foreclosure auction. This was among the highest rates in the country for a major metropolitan area. Foreclosure-related properties were sold at a 22% discount over other properties sold that month, lower than the 38% discount for such homes nationwide.
9. Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
> Pct. distressed sales: 26.9%
> Unemployment rate: 8.7%
> Pct. change in home prices: N/A
Chicago is one of the largest housing markets in the country, with an annualized total of than 170,000 homes sales as of December, according to RealtyTrac. Of area sales in December, more than a quarter were short-sales or foreclosure-related. One reason the city may have so many distressed homes is its long-term struggle with high unemployment. The metro area’s November unemployment rate was 8.7%, sixth highest of any major city measured. Perhaps showing early signs of recovery, foreclosure starts in Cook County, the metro area’s most populous county, fell by more than 40% in 2013.
8. Cleveland-Elyria-Mentor, Ohio
> Pct. distressed sales: 28.6%
> Unemployment rate: 7.3%
> Pct. change in home prices: 12%
Foreclosure-related sales accounted for 21.7% of all home sales in the Cleveland area in December, more than any metro area considered except for Las Vegas. However, institutional investors — who often buy homes that have been foreclosed — do not appear to be targeting distressed properties in and around Cleveland. Institutional sales accounted for just 4.5% of all homes sold at the end of last year, lower than in many other metro areas considered and below the national percentage of such sales. While this suggests individuals and families account for most home buyers, it may also indicate investors’ lack of interest in the local economy. Incomes in the metro area are fairly low as well. The Cleveland area’s median household income was just $46,944 in 2012, versus more than $51,000 nationwide.
7. Riverside-San Bernardino-Ontario, Calif.
> Pct. distressed sales: 28.8%
> Unemployment rate: 9.6%
> Pct. change in home prices: 23%
While the housing crisis may be in the rear view mirror for much of the country, the housing market in the Riverside metro area continues to process its effects. Foreclosure-related accounted for more than 21% of all homes sold in the area at the end of last year. Additionally, many area residents were unemployed. The area’s unemployment rate was 9.6% as of November, higher than any other major metro area. However, not all news for the area has been bad. Riverside area homes had a median sales price of $232,000 in December, well above the U.S. median of $168,391. Additionally, sales prices were up 23% compared to the year before, one of the largest increases among major metro areas.
6. Memphis, Tenn.-Miss.-Ark.
> Pct. distressed sales: 29.5%
> Unemployment rate: 9.5%
> Pct. change in home prices: N/A
Nearly 30% of home sales December in the Memphis metro area were either short sales or foreclosure-related sales. While according to figures released by the Federal Reserve in its Beige Book both home sales and housing permits had risen considerably in 2013, part of this activity may be investor speculation rather than families buying a home. At the end of last year, institutional investors accounted for nearly 18% of sales in Memphis, fifth-most among metro areas considered. The city continues to struggle with unemployment, with a jobless rate of 9.5% as of November and relatively sparse job growth.