5 Cities Where Homes Aren't Selling
It's no secret that the favor of the housing market has shifted away from sellers and into the arms of buyers. With this shift, the U.S. map has been broken down in yet another economic manner - by housing conditions. (The subprime collapse could mean doom and gloom for housing, equities and the overall economy. Find out more in How Will The Subprime Mess Impact You?)
Several factors can be used to examine how good or bad a market is for selling a house. We will examine several large cities on the basis of property value growth (or decline) and days on market.
The Standard & Poor Case-Shiller Home Price Indices tracks property values in 20 metropolitan regions within the United States. Each index measures the growth in value of residential real estate, and the index family also includes a national index and two composite indices. Data from S&P reflects the changes in property values from October, 2008 to October, 2009. Real estate agents, use "days on market" to relay (on average) how long it takes for a real estate listing to become a ratified contract. Days on market were provided by AOL Real Estate. (Find out how home ownership can affect your portfolio's return, in The Risks Of Real Estate Sector Funds.)
- Las Vegas
The housing market downturn took a huge bite of Sin City property values. In the past year, property values fell 26.6%. The good news is that on a monthly basis, property values appear to be falling at a slower pace. From August-September, 2009, values fell 0.9% and from September-October, 2009 values fell just 0.1%. On average, a home sits on the market for 142 days.
In October 2009, property values in Phoenix were 18.1% lower than one year earlier. However, values have recently risen, and have managed to do so at an increasing pace. From August-September, and September-October, 2009, values rose by 0.8% and 1.3%, respectively. Homes spend an average of just over four months (131 days) on the market in Phoenix.
Two of the five cities with the largest property value declines are located in Florida. Tampa's property values dropped 15.2% in the past year, and in recent months they have fallen at an increasing pace. From August-September, values fell 0.6%. The decline from September-October was over two-times greater, coming in at 1.6%. Homes in Tampa spend an average of 197 days on the market, representing the lengthiest stay of all 20 metropolitan regions.
Motor City property values shrank 15.1% from October, 2008 to October, 2009. On a month-to-month basis, things may be picking up. Property values actually rose 1.8% from August-September. They continued to rise from September-October, but at a much slower pace of 0.2%. Homes appear to be moving relatively faster in Detroit, staying on the market for an average of 124 days.
Miami is the second city in Florida to be hit particularly hard by declining property values. As of October, 2009, property values had fallen 14% from the previous year's levels. Monthly figures show mixed results. The market showed some signs of life, posting a 0.5% gain between August-September. The growth was short-lived, values fell 0.4% from September to October. Houses in Miami have spent a considerable amount of time on the market, taking an average of 168 days to move.
Many people say real estate is about three things: location, location and location. Unfortunately, no location on our list managed to escape the overall market downturn. Sell if you must, but be aware of trends in your area, including property value and days on the market, on the front end, so you can make the most informed decision possible. (Real estate can provide diversification and a hedge against inflation. Find out why it works, in Can Real Estate Stabilize Your Portfolio?)