The housing market has been in a serious slump since the Great Recession of 2008. Many homeowners have found themselves owing far more on their homes than the actual value. This has led to a major drop in the net worth of some homeowners. While some areas of the country have seen their housing prices decline gradually, some areas have seen the value of their homes fall off a cliff. Let's take a look at the five worst housing markets in the United States.

TUTORIALS: Economic Indicators

Nevada leads the nation when it comes to homes that are underwater with six out of 10 homeowners finding themselves upside down on their mortgages. This is much higher than the national average of 22.5% according to data and analytics company CoreLogic, but lower than the 68% total in 2010. Nevada homeowners saw their homes run up more than the national average during the real estate boom, and have seen them fall just as fast during the bust. Home prices are down 59.4% in a state where the median income is $53,341. The average loan to value in the state is a whopping 115% according to "LendingTree Weekly Mortgage Rate Pulse Reports" released on August 30, which is well above the national average of 70%.

Arizona residents saw their property values decline 51.7% from the market peak. This has left 49% of Arizona borrowers in the red on their mortgages. The average loan to value has risen to 93.6%. The average Arizona homeowner has a negative equity value of $60,000 which is quite high considering that the median income is $48,745. Despite the large amount of mortgage owners that are underwater, some analysts believe that the market is bottoming. The 49% of homeowners underwater is lower than the 51% that were underwater a few months ago. (Read Avoid Foreclosure: How To Handle An Underwater Mortgage.)

It may seem that with a median income of $44,736 and a number of attractive properties in the state that Florida homeowners would have survived the crisis in tact. That is not the case as a 50.2% drop in home prices and a 12% unemployment rate have combined to place a large number of Florida homeowners owing far more than their homes are worth. Forty five percent of Florida residents find themselves underwater on their mortgages because of the housing market crash. A rise in foreclosures in the Florida region has driven prices down at a much higher rate than the national average.

The state of Michigan has been hampered by a seasonally adjusted unemployment rate that is around 11% and a decline in home prices of nearly 34%. Residents in the state have been hurt by an exodus of a large number of jobs leaving a lot of homeowners unable to pay their mortgages. Michigan has 33% of its homeowners with a negative equity ownership percentage. The average loan to value for residents comes in at 84.2% which is in the high range. The median household income of $45,413 according to the 2010 American Community Survey has not been enough to make up for the crash in home prices.

TUTORIAL: Market Crashes

Everything is not sunny in the state of California, as the state comes in dead last in terms of housing markets. In a state that (according to the "2010 American Community Survey" three-year average) has a median household income of $56,418, California leads the nation with the largest number of underwater homes. More than 2 million homeowners in the state have negative equity in their homes with 34.6% of all borrowers having negative equity. Home prices in the state are down 45.2% from their peak levels. The 70.1% average loan to value ratio is slightly above the national average.

The Bottom Line
As you can see, the fall of housing prices has affected real-estate markets all across the country with some areas seeing such large declines that it may take a decade or more for them to recover.

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