Special Report

America's Sickest Housing Markets

5) Sacramento-Arden-Arcade-Roseville, Calif.
> Average annual list price decline: -7.2%
> Rental vacancy: 6.8%
> Homeowner vacancy: 2.5%

Asking home prices in the Sacramento metro region were down by 4.1% from June of this year compared to June of last year. Since they peaked in late 2005, home prices in the Sacramento metro region lost more than half of their value. This 54.7% drop is the sixth-largest decline among the country’s large housing markets. More than 2% of homeowners were in foreclosure between January and June of this year, the sixth-highest proportion of the 75 metropolitan areas considered. The number of home listings in the metro region has decreased by almost 36% since April 2011. In March activists from the region visited President Obama’s Sacramento reelection offices demanding that government sponsored enterprises reduce principals on mortgage loans to reflect the present value of homes in the area.

4) Virginia Beach-Norfolk-Newport News, Va.
> Average annual list price decline: -3.4%
> Rental vacancy: 6.8%
> Homeowner vacancy: 2.8%

The housing market of Virginia’s south shore is still suffering from the recession — the average drop in list prices for the first six months of this year was 3.4%. Median home prices have plummeted almost 20% since peaking in 2007, but a disconnect between potential buyer incomes and housing prices in the Virginia Beach area seems to still exist.  The metropolitan area has a median list price that is almost 25% higher than the national average, while median incomes there are only about 13% higher than the national median, according to Fiserv 2011 fourth-quarter estimates. In February, the Virginia Beach Assessor’s Office released a projected fiscal year 2013 assessment of $48.7 billion for the value of all taxable property in the area. This represented a 3.7% decline from the previous year, with 79% of properties receiving a decreased assessment value.

3) San Diego-Carlsbad-San Marcos, Calif.
> Average annual list price decline:-3.2%
> Rental vacancy: 8.6%
> Homeowner vacancy: 2.7%

With nearly 165,000 home mortgages underwater, the greater San Diego metropolitan area has one of the nation’s highest number of homes in negative equity. Home values in the San Diego region had the 13th-largest drop (37.1%) from their peak in 2006 to the first quarter this year of all metropolitan areas reviewed. Underwater homes are a problem, and the region has $20.5 billion in total negative equity, with nearly 10% of homes under water. According to the North County Times, the assessed value of all taxable property in the county fell by 0.14% to $395.1 billion in 2011.

2) Toledo, Ohio
> Average annual list price decline: -6.8%
> Rental vacancy: 6.4%
> Homeowner vacancy: 5.6%

From January to June, 2012, Toledo has had some of the sharpest declines in housing list prices. Between January 2011 and January of this year, for example, asking prices fell 11.7%. Between the fourth quarter of 2011 and the fourth quarter of this year, Fiserv project that median home value in the region will fall by nearly 3%, which would be one of the largest declines among large metro regions in the U.S. Toledo has the single highest homeowner vacancy rate among largest metro areas, with a rate of 5.6% in the first quarter 2012. In the Toledo metropolitan area, 37.5% of homeowners with mortgages are in negative equity.

Also Read: Home Sellers Smarter than Realtors Think

1) Riverside-San Bernardino-Ontario, Calif.
> Average annual list price decline: -1.8%
> Rental vacancy: 9.4%
> Homeowner vacancy: 4.4%

Riverside is the third California metropolitan area suffering from a sick housing market. In this region, homeowners paying a mortgage have $41.5 billion in negative equity, the fifth-highest amount in the nation. Many of these homes are under water because median home prices plunged by 55.6% from their peak in 2006. The metro had an annual unemployment rate of 14.3% in 2010, the highest among the largest cities in the country (it was 11.8% in May 2012), and 12.3% of homeowners with a mortgage are 90 or more days delinquent on their payments — the ninth-highest rate. According to Southern California’s City News Service, the assessed value of all taxable property in the county is estimated to be $204.8 billion for the 2012-2013 fiscal year, a $300 million decline from the $205.1 billion assessment in the previous fiscal year. While the decrease is lower than previous years, it means things have yet to improve.

Michael A. Sauter, Lisa Nelson and Alexander E. M. Hess