Yahoo Finance 20 Worst Performing Housing Markets in the US
In this article, we will be covering the 20 worst performing housing markets in the US. If you wish to skip our detailed analysis, you can move directly to the 5 Worst Performing Housing Markets in the US.
What’s Happening in the US Real Estate Market?
With existing home sales reaching a 4.38 million seasonally adjusted annual rate in February, the US real estate activity has improved. As reported by the National Association of REALTORS, February witnessed an increase in existing home sales by 9.5% thereby recording the highest monthly increase since February 2023. While the sales did not change in the Northeast, the West, South, and Midwest saw a rise in sales. However, the year-over-year sales dropped across the country. As of February, 1.07 million units of housing inventory were recorded, up 10.3% year-over-year.
While the Northeast underperformed in February home sales as a result of constraints in inventory, the region performed well in home prices. According to the regional patterns related to home prices, all regions in the US experienced an increase in February. In the Northeast, the median price was recorded at $420,600 which increased by 11.5% since 2023. The Midwest registered a 6.8% year-over-year gain in median prices. At the same time, prices went up by 9.1% in the West and 4.1% in the South.
Comparison Across Local Housing Markets
As reported by the real-estate platform Realtor, the 2024 real estate market tends to move in the direction of recovery with mortgage rates cooling down after remaining elevated under a tight monetary policy. However, a low for-sale inventory still persists. As of December 2023, inventory was below pre-pandemic levels by an average of 54.5%.
Amidst low inventory and limited affordability, buyers continue to look for affordable housing markets. Low-priced locales have become popular thereby putting pressure on inventory and driving rapid price growth. These places offer more amenities than many other large metros which shows that buyers are attracted towards low-priced markets where they don’t have to spend much while they can avail lifestyle comforts.
The most emerging market identified in the Wall Street Journal/Realtor.com Emerging Housing Markets Index was Santa Maria-Santa Barbara where the median list price was as high as $1,795,000 in December 2023, nearly 4.5 times the national median. Other emerging markets were low-priced and based in the Midwest, South, and Northeast. This indicates a trend that depicts that rising housing markets are either those that are actually cheaper or those where prices are so high that affordability is not a concern for the buyers in the market. Additionally, these markets boast a quick pace of sale where homes do not stay on the market for long even when the prices are growing. On the other hand, properties listed in poor housing markets spend a longer duration on the market sitting idle before buyers show interest in them.
Another common aspect between the high-priced Western market of Santa Barbara and other affordable rising markets is how the for-sale inventory went down during the early pandemic days while homeowners remained reluctant to sell their houses. This raised competition among buyers longing for a median-priced home which drove the prices up. For instance, 62% of Santa Barbara homes were priced at $1 million or higher in December 2019 which changed to 71% in December 2023 since the cheaper inventory was pursued rapidly, making up a lesser share of for-sale inventory. On the contrary, properties in worst performing markets do not undergo price appreciation. Price drops in such markets show signs of weakness and a lack of growth. This deems them unattractive since buyers would want to have their homes retain their value if not appreciated.
Mid-sized markets attract many buyers since they offer a small-town feel combined with big-city amenities. Sixteen of the top 20 emerging housing markets host less than 500,000 people. While commute times are shorter in these places due to less congestion, the job market seems to be stronger than average. Hot markets including Concord, Manchester-Nashua, and Portland-South Portland have unemployment rates below the national level.
Homebuilders Facilitating Buyers
American homebuilders continue to cater to the diverse buyer needs in desirable locations across the country. Some of the known builders include Dream Finders Homes, Inc. (NASDAQ:DFH), Lennar Corporation (NYSE:LEN), and Beazer Homes USA, Inc. (NYSE:BZH). Let’s take a look at what these firms have been up to.
Dream Finders Homes, Inc. (NYSE: DFH) is engaged in building single-family homes across the Southeast, Mid-Atlantic, and Midwest. On March 21, Dream Finders Homes (NYSE: DFH) announced its new home community in Lakewood Ranch, Florida. The community’s ideal location allows access to Downtown Sarasota and Siesta Key. Sales in the community have been planned to start in early April. Pricing for the new homes from Dream Finders Homes, Inc. (NYSE: DFH) will also be disclosed when the community sales begin.
Lennar Corporation (NYSE:LEN) is an American home construction company that constructs affordable, move-up, and active adult homes. It also engages in the development of high-quality multifamily rental properties. On April 2, Lennar Corporation (NYSE:LEN) reported that it initiated sales at its first community in Buffalo City. The community ‘Settlers Brook’ offers access to shopping and dining options in Downtown Buffalo. Residents can enjoy recreation at the nearby Buffalo Lake or at local parks. Those who wish to seek a small community feel with suburban amenities can consider living in the new community. Pricing of homes at Settlers Brook starts in the $300,000s.
Beazer Homes USA, Inc. (NYSE:BZH) is a leading homebuilder in the United States. It currently builds houses in multiple states including Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. On March 19, Beazer Homes USA, Inc. (NYSE:BZH) reported that it has acquired 17 acres of land in Apex for its new community, ‘The Summit’. 86 townhomes and 16 single-family homes will be a part of The Summit. These homes will be designed to be 40% to 50% more efficient than typical new homes. Homes in the community will be available for sale in the fall of 2025.
Now that we have analyzed the US housing market, let’s move to the 20 worst performing housing markets in the country.
20 Worst Performing Housing Markets in the US
Our Methodology:
In order to compile a list of the 20 worst performing housing markets in the US, we acquired metro-level data from the leading real estate source, Zillow. To depict the weak housing performance in metros, we have selected the year-over-year growth in median list prices, as of February 2024, as our primary metric. Therefore, the worst performing real estate markets are those where home prices declined the most over the past year instead of undergoing any positive appreciation.
Furthermore, we have supplemented this metric with the number of days homes are on the market before moving into a pending sale status. This represents the time spent by the local properties on the market before going under contract. A higher number of days to pending depicts a sluggish market where demand is lower due to high home prices or unattractive locations. This is because well-priced and attractive properties do not remain on the market for a longer period.
20 Worst Performing Housing Markets in the US
20. Binghamton
Year-Over-Year Change in Median List Price: -1.3%
Days to Pending: 10.0
Binghamton is a city in New York where the housing market has not been performing well. This is evident from the fact that the median list price in the metro declined by 1.3% year-over-year, as of February.
19. Lubbock
Year-Over-Year Change in Median List Price: -1.4%
Days to Pending: 24.0
Texas hosts the city of Lubbock. While the city experienced a drop in its median list price over the year, it takes 24 days for a local property to finally go pending.
18. North Port
Year-Over-Year Change in Median List Price: -1.7%
Days to Pending: 37.0
North Port is based in Florida and ranks as one of the worst performing US housing markets. Local properties tend to spend 37 days on the market before going pending which indicates a slow market.
17. Colorado Springs
Year-Over-Year Change in Median List Price: -1.9%
Days to Pending: 19.0
As of February, the year-over-year change in median list price in Colorado Springs was recorded at -1.9%. Hence, home prices have been going down deeming the city as one of the worst performing housing markets.
16. Miami
Year-Over-Year Change in Median List Price: -2.0%
Days to Pending: 35.0
Local listings in Miami go pending in a period of 35 days which shows that the properties do not sell quickly. Furthermore, prices have also decreased in the city.
15. Vallejo
Year-Over-Year Change in Median List Price: -2.3%
Days to Pending: 12.0
Vallejo is situated in Solano County, California. The city ranks among the worst performing US housing markets since the median list price has gone down by 2.3% year-over-year, as recorded in February.
14. Visalia
Year-Over-Year Change in Median List Price: -2.6%
Days to Pending: 15.0
Visalia is based in the agricultural San Joaquin Valley of California. The city records one of the worst housing market performances as evidenced by the median list price decline of 2.6% since 2023.
13. Evansville
Year-Over-Year Change in Median List Price: -3.0%
Days to Pending: 14.0
As of February, the median list prices have gone down in Evansville by 3.0% Therefore, the 20 worst performing US housing markets rank the city.
12. Corpus Christi
Year-Over-Year Change in Median List Price: -3.3%
Days to Pending: 40.0
Property listings in Corpus Christi take 40 whole days before going pending. Hence, the sluggish housing market in Corpus Christi ranks among the worst performing housing markets in the country.
11. Springfield
Year-Over-Year Change in Median List Price: -3.3%
Days to Pending: 13.0
As reported by Zillow, the median list price in Springfield has reduced by 3.3% since last year. The declining home prices depict a badly performing real estate market.
10. Urban Honolulu
Year-Over-Year Change in Median List Price: -3.9%
Days to Pending: 23.0
Urban Honolulu properties tend to be on the market for 23 days before going pending. Furthermore, the median list prices have recorded a year-over-year decrease of 3.9%.
9. Killeen
Year-Over-Year Change in Median List Price: -4.1%
Days to Pending: 35.0
The city of Killeen is positioned in Bell County, Texas. The city ranks as one of the worst performing housing markets in the US since home prices have dropped over the year and local properties spend 5 weeks being on the market.
8. Worcester
Year-Over-Year Change in Median List Price: -4.4%
Days to Pending: 9.0
Worcester is located in Massachusetts and is another housing market with a poor performance. The year-over-year decline in median list price in the city was 4.4%, as of February.
7. Tyler
Year-Over-Year Change in Median List Price: -5.3%
Days to Pending: 49.5
49.5 days are spent by the properties on the market in Tyler before going pending. A 5.3% drop in the city’s home prices further aggravates the local housing market situation.
6. Tulsa
Year-Over-Year Change in Median List Price: -6.0%
Days to Pending: 21.0
Tulsa is based in the state of Oklahoma. As of February, the city has recorded a 6% decrease in its median list price since last year.
Click to continue reading and see 5 Worst Performing Housing Markets in the US.
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Disclosure: None. 20 Worst Performing Housing Markets in the US is originally published on Insider Monkey.
