By S.E. Slack
Before the housing bubble reached its peak in 2007, homeowners purchased homes with the expectation that it would appreciate in value over time. The decline in home values over the past seven years, however, forced many homeowners – and prospective buyers – to face the grim fact that the housing market will never be quite the same again.
Real estate firm Zillow has researched and defined the riskiest housing markets in the nation to identify where homeowners were most likely and least likely to incur a loss upon the sale of their home.
The housing markets with the highest percentage of negative five-year returns are Hartford (37 percent risk of loss), Providence, R.I. (32 percent), Riverside, Calif. (31 percent), Boston (30 percent) and Los Angeles (29 percent). The five least risky metro areas by the same metric are Buffalo (0 percent risk of loss), Pittsburgh (0 percent), Louisville-Jefferson County (3 percent), Raleigh (9 percent) and Nashville (9 percent).
Looking at only the worst year per metro area, the list changed a bit. The areas with the largest declines in home values are Las Vegas, Riverside, Calif.; Miami-Fort Lauderdale, Orlando and Phoenix.
Las Vegas topped the worst list with a 30 percent decline in home values from September 2008 to September 2009. Riverside came in second worst with a 29 percent decline in home values from March 2008 to March 2009.
Miami-Fort Lauderdale experienced a 28 percent decline in home values from December 2007 to December 2008 while Orlando, further north and inland, saw a 25 percent decline in home values from December 2007 to December 2008. Phoenix rounded out the top five worst markets with a 21 percent decline in home values from December 2007 to December 2008.
If you are planning to move to a risky area, finding a home to rent might be worth consideration before purchasing. You’ll get to know all parts of town, discover where the least-riskiest neighborhoods are located and make the most of your home-purchasing dollars.