The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.
That seems obvious, but the “buyers’ strike” has caused house prices to drop, along with an epidemic of foreclosures. What’s worse -- the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7 percent to 10 percent this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than one million homes were foreclosed upon in 2010.
Many economists argue that the housing market may take four or five years to recover. Even if that’s proven to be true, the all-time highs of 2006 may never be reached again.
The devastation in some regions will never be repaired. 24/7 Wall St.
looked at a number of the standard measures to find the housing markets facing the biggest problems attracting buyers. After a detailed examination, six metrics were chosen: (1) vacancy rates for 2010; (2) foreclosure rates for 2010; (3) November 2010 unemployment rates; (4) change in building permits from 2006 to 2010; (5) change in population from 2005 to 2010; and (6) price reduction by major cities for 2010. Taken together they create a strong statistical base to describe markets which buyers have largely abandoned.
Is your city on the list? Read on to find out.