America’s Most Troubled Housing Markets
As per data which was released a month ago mentioned that the home prices in the USA in the 5 month period increased for the fourth time. This is a good thing for the market of real estate. However, according to a review given by Trulia.com mentions that many cities of the country are struggling because of the poor demand, rising rates of foreclosure and deficit equity.
On one hand when many housing markets are displaying positive signs focusing on vacancy rate, on the other hand there are many markets which are taking a lot of time to recover. Based on the data, there 5 sickest housing markets of USA. Amongst the 5 markets, three are in California and those are San Diego, the Riverside and Sacramento. The other 2 markets are Virginia Beach and Toledo. Each of these markets witnessed a reduction in the prices of homes in the first half of 2011 and in the first half of 2012.
These markets have a high vacancy rates which shows that their interest is less in these regions. High vacancy rates, which mean the part of homes which is not occupied, depress the values of the property. Each of these markets is amongst the top 25 markets which have high vacancy rates, negative equity and foreclosures. Virginia Beach and Riverside are included in the top 15. Toledo is the one that has the highest rate which is of about 5.6 percent.
The chief economist of Trulia mentioned that the reasons for the decline in the home prices are foreclosures and high rates of vacancy. Amongst the 5 markets, three markets had the largest reduction during the recession. During the reduction, the Riverside and Sacramento lost more half of the value. Riverside and Sacramento saw ample amount of overbuilding during the time and thus there were more houses being made compared to the demand. According to the report of the first 3 months of the year 2012, the California markets have the largest proportions of houses with mortgages and their worth is less than the current value.
The troubles caused in the markets are because of the economic difficulty and that even long term. The annual average price decline of the Sacramento market is -7.2 percent, Rental vacancy is 6.8 percent and the homeowner vacancy rate is 2.5 percent. The Virginia Market faces the average annual price decline of -3.4 percent, Rental Vacancy of 6.8 percent and the homeowner vacancy rate of 2.8 percent. The Sand Diego market experiences the annual reduction in the prices of -3.2 percent, Rental Vacancy of 8.6 percent and the Homeowner vacancy rate of 2.7 percent. The Toledo market has the annual price reduction of -6.8 percent, Rental Vacancy of 6.4 percent and homeowner vacancy rate of 5.6 percent. The last market which is the Riverside market experiences reduction in the price of -1.8 percent, rental vacancy rate of 9.4 percent and homeowner vacancy rate of 4.4 percent. The highest vacancy rate is of the market in Toledo.