New RealtyTrac numbers show that in April there were well over 300,000 foreclosures and the figure in on track to be higher in 2010 than in 2009. Several research firms say that underwater mortgages have moved above 11 million. The National Association of Realtors found that “in the first quarter, 91 out of 152 metropolitan statistical areas showed higher median existing single-family home prices in comparison with the first quarter of 2009.” But some cities posted double-digit drops for the period.
24/7 Wall St. reviewed the NAR data for the first quarter along with Bureau of Labor Statistics unemployment levels by city. The two databases should match one another very well. Each has municipalities defined by metropolitan statistics areas (SMA) as set by the US Office of Management and Budget in 2004.
City unemployment rates are compared to a 9.9% national rate for purposes of this article. Government numbers for joblessness do not include part-time workers looking for full-time jobs or people who have become “unattached” from the work force. These additions would bring the national unemployment rate to 17.1%. That means that if a city has unemployment of 14%, joblessness could be closer to 21%
Home prices were based on NAR indexes for the first quarter of 2010 compared with the full-year 2007, near the top of the housing market.
There are some areas where housing prices have dropped but unemployment has improved, so home values may recover. Honolulu is an example of this. But, most cities with sharp drops in home values are also the hardest hit by the recession’s impact on employment. These areas may take years to get back to “normal” unemployment rates of 5%. In the meantime, home prices will continue to stagnate, or worse, continue to fall because of a lack of buyers.
These are the thirteen cities where, based on home values in 2007 and current unemployment, housing will never return to the levels of three years ago: