Signs of Market Decline
Buying a home is a pricey prospect, so home buyers not only want to get a great deal, but they also want their new home to increase, not decrease, in value. While predicting a future housing slump is a bit of a guessing game, there are some telltale signs, including a large number of homes on the market, sellers dropping their asking prices, and vacant homes in the neighborhood, all of which are early indications that home prices may be taking a downturn.
At the top of GOBankingRate’s list of communities that have experienced pronounced drops in home prices is Peoria, Illinois, where as many as 21 percent of homeowners are underwater, or upside-down, in their mortgages, meaning they owe more on their mortgages than their homes are now worth. In addition, the median price of a listed home today is $124,450, which is down 15.9 percent from two years ago. Approximately one out of every 932 homes in Peoria enters foreclosure.
Lakewood, New Jersey
With 106,300 residents, Lakewood is the most populous township in Ocean County, New Jersey, but it has seen more than its fair share of plummeting home prices. In the past two years, the median listed home price has dropped 12.3 percent to $252,000. Additionally, approximately 9.4 percent of homeowners are upside-down in their mortgages, which contributes to a foreclosure rate of one in every 1,187 homes.
Home prices in Columbus, Georgia, have dropped an alarming 10.2 percent in the past couple of years, down to a median list price of $115,450, which explains why as many as 22.2 percent of homeowner mortgages are underwater. This western Georgia community that stretches out along the Chattahoochee River also suffers from a one in 1,172 foreclosure rate, approximately double the national rate.
Miami Beach, Florida
Situated on an island in South Florida, Miami Beach is treasured for its vast beaches, but even those aren’t enough to keep home values afloat. While the median price of a home in Miami Beach is much higher than it is in many other communities around the country, at $499,000 it’s fully 5 percent less than it was a couple of years ago. Approximately 14.5 percent of Miami Beach homeowners are underwater in their mortgages, and one out of every 2,374 homes ends up in foreclosure.
Located on the picturesque banks of the Patuxent River, Laurel, Maryland, has seen home prices drop 2.8 percent over the past couple of years to a median list price of $350,000, and as many as 12.6 percent of homeowners are upside-down in their mortgages. Though Laurel was once a bustling mill town, today approximately one out of every 1,457 home mortgages in the city ends in foreclosure.
The county seat of Collin County, Texas, McKinney is only a 30-minute drive to north Dallas, making it an attractive location for commuters. Its proximity to the metropolis hasn’t kept housing prices up, however. The median home in McKinney costs $379,243, which is a 1.3 percent drop from two years ago. In addition, 4.3 percent of homeowners are underwater in their mortgages, and one in every 2,546 homes enters foreclosure.
These days a home in Naples, Florida, will set you back about $407,990, which is a decrease of 8.8 percent over the past two years. Perhaps some of the blame for the sagging prices can be pinned on the long amount of time houses spend on the market—140 days, on average, which is twice the national average. As many as 6 percent of homeowners are upside-down in their mortgages, and one of every 2,515 homes ends up in foreclosure.
Fort Lauderdale, Florida
Known for its historic red brick river walk, gondola canal rides, and artsy culture, Fort Lauderdale has seen an uptick in crime recently, which may account in part for a 0.2 percent drop in home prices. Today, the median home price is still a hefty $499,900, but as many as 7 percent of homeowners are underwater in their mortgages, and one out of every 1,507 homes winds up in foreclosure.
One of the wealthier communities in the country, Naperville, Illinois, a suburb of Chicago, has seen a 2.2 percent drop in housing prices over the past two years. The median price of a home in Naperville is now $439,990, but as many as 6.5 percent of homeowners are upside-down in their mortgages, and approximately one out of every 3,897 homes sells in foreclosure. Naperville also earns the dubious honor of having the largest percentage of homes on the market with reduced prices, 26.4 percent.
Fort Myers, Florida
With a median home price today of $249,999, Fort Myers, Florida, has seen a drop in home values over the past couple of years of approximately 1.4 percent. Additionally, as many as 6.9 percent of homeowners are underwater in their mortgages, and one out of every 1,921 homes ends up in foreclosure. An ample supply of homes for sale may be contributing to the lengthy amount of time houses sit on the market before they sell, which averages 105 days, almost twice the national average.
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