GoBankingRates recently published their research on cities most at risk of experiencing a potential housing crash in 2019. GoBankingRates looked at underwater mortgages, home vacancies and delinquency/foreclosure rates as key indicators of “troubled” markets.
GoBankingRates’ report stated, “For most people, the housing crisis of 2008 is still a recent painful memory of precisely how damaging a housing crisis can be when housing markets aren’t working…It’s much harder for people to invest in their future and build a home for their families…” if and/or when market signs are less than optimum.
GoBankingRates found 40 cities among some 237 cities to be on the lookout for possible problems in their specific locations. Here are the top ten cities at most risk of experiencing another housing nightmare:
- Newark NJ – median home value of $252,000
a. Nearly 30% of Newark’s homes with mortgages have negative equity.
b. The city has 5.2% vacancy rates of owned homes and 9.5% of rental units compared to the national average of 1.7% and 6.1% respectively.
c. Approximately 6.5% of mortgage payments are in some sort of delinquency, more than six times the national average.
- Detroit MI – median home value of $226,3000
a. Detroit has the highest percentage of homes in the country, 34.4%, with negative equity.
b. Vacancy and delinquency rates are also higher than national averages.
- Bridgeport CT – median home value of $176,200
a. GoBankingRates tells us real estate values in Bridgeport have dropped significantly due to high crime and low economic prospects.
b. 9% of mortgages in Bridgeport are underwater.
c. “The city’s high delinquency and foreclosure rates are not inviting people looking for the best place to buy their first home,” according to the report.
- Baltimore MD – median home value of $119,200
a. 5% of mortgages in Baltimore have negative equity.
b. The homeowner occupancy rate sits at 4.4% whereas the national rate is 2.5%.
c. HOWEVER, Baltimore is experiencing constant development and offering opportunities for investors.
- Hartford CT – median home value of $130,900
a. Only 22.4% mortgages are underwater but Hartford has a 4.5% homeowner vacancy rate, more than 2.5 times that of the national average
b. The rental unit vacancy rate sits at 9.2%.
- Paterson NJ – median home value of $253,110
a. 7% of mortgages are underwater.
b. There is a 3.6% delinquency rate on mortgages, more than three times the national average.
- Cleveland OH -median home value of $55,900 or four times less than the current median home value, according to Zillow.
a. 9% of home mortgages in Cleveland are underwater.
b. The city has the second highest foreclosure rate in this GoBankingRates study behind only Columbia.
- Fayetteville NC – median home value of $108,100
a. 8% of mortgages are underwater
b. 4% of homes are not occupied.
- Dayton OH – median home value of $52,500
a. 6% of mortgages have negative equity.
b. Median list price is $67,900.
- Montgomery AL – median home value of $83,100
a. 2% of mortgages are underwater.