These 8 Cities Are Right on the Brink of a Major Housing Market Slump
For the most part, the housing market is looking relatively strong despite all the unrest from COVID-19. However, there are a few areas where the pandemic has greatly affected housing. Regions that had overinflated home values are starting to experience a crash, and some already impoverished towns are also having trouble dealing with the challenges of the pandemic. Data from a GoBankingRates study found that these 8 cities have a housing market in great danger right now.
Lake Charles, Louisiana
Louisiana is a fairly recession-prone area because its economy has been devastated by several very severe hurricanes. Lake Charles is the fifth largest city in Louisiana, and COVID-19 has caused some major economic challenges. The region was already struggling to rebuild from hurricanes, and COVID has caused a major slump in construction and other jobs. One out of every 4,148 homes is under foreclosure, and prices have dropped by about 1.74 percent since 2018.
Santa Rosa, California
According to the GoBankingRates study, this is a part of California dealing with a major foreclosure crisis. Average home prices in Santa Rosa are currently sitting around $608,752, which is on the low side for some Californian regions, but they're still too high for people to keep up with. The foreclosure rate for this area right now is one out of every 3,893 homes.
Laredo, Texas was doing quite good before COVID, since it was one of the few places with affordable housing in South Texas. However, with all the blue collar and hospitality workers in the area, Laredo has been disproportionately affected by the pandemic. Right now, one out of every 5,296 homes is foreclosed. This has flooded the market with a lot of low priced homes, leading to a 4.31 percent decline in typical home pricing over the last year.
Fremont was one of the central housing markets for the Silicon Valley region. Like many other high end housing markets, it has been greatly damaged by COVID-19. Home values have dropped by 4.79 percent over the past two years. Since the average home price in Fremont was over a million dollars though, real estate isn't quite as accessible as you might hope. The typical Fremont home still sells for around $1,139,622.
San Mateo, California
A suburb of San Francisco, San Mateo has been known for record high growth in the past 10 years. However, COVID-19 has hit this runaway housing market hard. Homes were at an average high of $1.5 million dollars before seeing a 6.09 percent decline. However, there actually aren't many foreclosures here. Fewer people are willing to pay overinflated prices, but most current owners can afford to keep up their home.
Redwood City, California
Like many other cities on this list, the third biggest housing decline is in California. Redwood is a pricy part of the Bay Area, with homes worth an average of $1,677,126. However, with all the uncertainty of COVID, fewer residents are willing to pay these premium prices. The lack of affordable housing is starting to cause quite a few foreclosures. In the past two years, home prices have also fallen by 5.2 percent. With so many million dollar homes, this has resulted in billions of lost dollars.
Most of Texas is actually booming right now, but some more rural regions are dealing with an aging population, reduced job opportunities, and a declining economy. Longview, Texas is one of those rural regions struggling to keep up with the rest of the state. Houses have dropped by 9.9 percent in price in the last year. Right now, Longview foreclosures rates are one for every 5,158 houses which is far higher than national averages.
Jackson, Mississippi ends up as number one on the list due to a few concerning statistics. First of all, foreclosure rates in the area are triple the national average. There has been a 10 percent decline in housing prices over the last few years, and the average value of a home in July was just $40,024. This decline seems to be mainly due to the fact that the area already had soaring unemployment rates, and the pandemic has just made things worse.
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