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The 10 worst selling real estate markets in America

Worst performing cities:

milwaukeeDespite news that the pending home sales index jumped at the highest rate since 2001, some real estate markets are struggling along.

We’ve recently discussed the best small towns to buy a home and outlined most rapidly growing counties but today we’d like to reveal the areas that are struggling.

The 10 worst performing markets:

Below is the Forbes.com list of 10 worst performing housing markets with Forbes’ explanations as to why they are under-performing.

  1. Milwaukee, WI: Some cities’ housing crisis stemmed from rampant overbuilding. Others can blame the decline of the manufacturing industry. Milwaukee has felt both. The worst-selling housing market saw a 47% increase in unsold homes between 2008 and 2009, thanks both to underlying economic problems and overzealous development during the housing bubble.
  2. Denver, CO: Denver doesn’t come to mind as a housing-crisis hot spot, but the city that once looked like it would escape the housing bust unscathed now shows signs of strain. More than 42,000 homes are on the market in the metro, 27% more than last year.
  3. Los Angeles, CA: Los Angeles has yet to recover from the blows it took when the housing bubble burst. Home sales fell by 5% in the metro between 2008 and 2009, while they rose, if only modestly, in most other large metros. Home sale prices peaked in late 2006, and it looks like the remnants of overbuilding will continue to clog the housing supply.
  4. St. Louis, MO: The city has shed jobs and seen housing prices plummet. Inventory in the metro is up 36%, in part as a result of its 11% unemployment rate. Manufacturing jobs no longer drive the city’s economy, and slow sales are just one symptom of its economic maladies.
  5. San Francisco, CA: Unemployment has reached 11% here, and home prices fell by 6% between 2008 and 2009. The area’s poor-home-sale performance shows that California’s housing woes spared no city.
  6. New York, NY: New York likely made the list in part because the condominium market, which drives much of Manhattan real estate, wasn’t included in the analysis. Still, not everything’s rosy in the Big Apple: Sale prices were down 13% between 2008 and 2009, and inventory has seen a 13% rise.
  7. Cincinnati, OH: Like Cleveland and other Rust Belt cities, Cincinnati suffers from a lack of jobs–the city is 11% unemployed–which has cut sales dramatically and left a glut of unsold houses behind. Inventory in the city rose 48% between 2008 and 2009.
  8. Cleveland, OH: Cleveland was suffering before the housing crisis hit, but the bursting of the bubble surely didn’t help. Unemployment is at 10% in the metro, which has hemorrhaged manufacturing jobs. That means families don’t have the means to buy, and homes remain unsold.
  9. Atlanta, GA: Inventory was up 6% in 2009 from the previous year. That may not sound like much, but together with flat quarter-over-quarter single-family home sale prices and sluggish sales rates, the overbuilt city shows significant signs of strain.
  10. San Diego, CA: Scores of new condominiums were constructed before the market peaked in the first quarter of 2006, driving up prices and spurring overbuilding. Many units were built for speculative buyers, but today the brand-new luxury buildings sit empty.

If you’re in any of these cities, surely there are parts of these cities or market segments like short sals that are pockets of good news, let us know what they are in comments below!

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

23 Comments

23 Comments

  1. BawldGuy

    April 6, 2010 at 10:30 am

    An additional load to the San Diego market are the tons of condo conversions completed or in the pipe when the crash began. It’s not been pretty.

  2. Yeah! Boston area didn’t make the List! A great feature of the Massachusetts housing makeup is that there is not a lot of land to develop. Therefore, it creates a economy that does not over-build and, I believe, automatically helps real estate values stay strong. I look at the numbers put out by the big moving companies to see if we are losing or gaining citizens. Unfortunately, we have been losing the past few years, so hence, the real estate market affected us also.

  3. Mike

    April 6, 2010 at 11:45 pm

    Hopefully these markets soon stabilize. It can certainly be tough for home sellers in these markets. If the unemployment rate improves, home sales will follow.

  4. Kristal Kraft

    April 7, 2010 at 12:11 am

    Somebody is smoking funny weed at Forbes.com

    According to my figures Denver has 18,869 units (combined single family detached and attached) on the market. At end of February 2010.

    At same time last year we had 20,059. In my arithmetic book that is MINUS 5.93% not 27% more than last year.

    Denver says Horse pucky to Forbes reporting.

  5. Danny @ Tampa Real Estate

    April 7, 2010 at 4:28 pm

    I always cringe when I see these lists hoping Tampa is not on them but sometimes I don’t think they are accurate.

    • Lani Rosales

      April 7, 2010 at 5:22 pm

      Danny, all of these “top 10” lists look at so many different variables, so it’s probably accurate for the variables they used but inaccurate if you throw in other variables. It’s interesting to think about nonetheless! 🙂

  6. Nashville Grant

    April 8, 2010 at 9:34 pm

    Okay so San Fran is on Forbes’ 10 worst performing markets as well as their 10 largest price increasing cities, what gives? Are the reporters over there not swapping notes anymore?

  7. Karen Goodman

    April 9, 2010 at 12:20 am

    The St. Louis stats usually paint an inaccurate picture. The City of St. Louis is an independent city which succeeded from St. Louis County about 100 years ago. But when people site stats, they normally only look at the City, which includes just the downtown and urban areas. All of the suburbs are in St. Louis County, and the outer ring suburbs are in St. Charles County. The city has about 300,000 of the 2.5mm people in the area.

    Sales are way down in much of the city, though there are still areas that are doing pretty well. The suburbs are doing better, at least for single family homes. We aren’t yet at a balanced market, but we’re working our way there.

  8. Maureen McCabe

    April 17, 2010 at 7:31 am

    New wrinkles.. the writer says the list is NOT saying what we think it is saying! John Rebchook writes

    “Levy told me that the article didn’t say that Denver had the second-worst housing market in the country, and she did not mean to imply that, although she could see how people were reaching the conclusion. She said it was based on a “‘very narrow ” metric. And that is the rub. She used data from Zillow.com, a large, giant aggregator of real estate information across the country. Using information on Zillow’s Web site, she found more than 42,000 houses in a 10-county are listed for sale. That is more than double the number of homes listed for sale by Metrolist.”

    What did she mean to imply about Denver or other cities on the list?

    Rebchook’s latest post says Levy (Forbes reporter) said she did not know that Zillow was reporting how many listings are on their site.

    Levy is giving Denver a second look, according to InsideRealEstateNews.com. How about Milwaukee, St. Louis, Cinci. Cleveland and other cities on the list? Is she going to stand by what ever she is implying in those cities based on data from Zillow that does not mean what she thought it meant? Or is she looking at the data for all those MSAs? Do the mayors of Milwaukee, St. Louis, Cinci, etc. need to get involved to get their cities housing market portrayed correctly? Levy used Zillow because they look at an MSA not at a small area. All Zillow is looking at is what is on their site and how those numbers move up and down.

    How Zillow can have 42,000 in the Denver MSA is still a mystery, isn’t it?

  9. Kristal Kraft

    April 17, 2010 at 10:23 am

    Metro Denver citizens have united in a common cause to defend the true statistics of our fair city. I challenge the other areas named in these lists to do the same.

    It is time we hold the media accountable for what they write. Using faulty data does not magically create a true representation.

    There is power in our words and that power is not exclusive to the media anymore. Challenge them, show them their errors, make them tell the truth.

    We owe it to our consumers.

  10. Kristal Kraft

    April 19, 2010 at 5:08 pm

    forbes.com/2010/04/19/inventory-denver-zillow-lifestyle-real-estate-inflated-forbes_print.html

  11. Kristal Kraft

    April 23, 2010 at 6:00 pm

    Forbes has removed both stories! Never, never, never, never give up.

    Thanks AG! Thanks all who called Forbes and Francesca Levy to task.

    You rock!
    kk

  12. sassy lou

    March 27, 2012 at 3:34 pm

    They totally overbuilt Manhattan with unaffordable housing!!! Now when you look up at night, at a new building (built 2006 to today), only about 30-40% of the lights are on. There is this new condo building built last year on Amsterdam about 75th street. There are only about 20% of those lights on.

    One other issue…that is VERY problematic for Manhattan economy is that some of the “precious” condo buyers are foreign owned and only use these apartments a few weeks a year. That kills the businesses below who rely on year-round income to survive the exhorbitent rents at the street level.

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