In many places across the U.S., the housing market seems to be recovering from the dramatic collapse of the housing bubble in 2008. Some of the then-booming markets that were hardest hit appear to be rebounding at a healthy rate. However, according to online real estate site Zillow.com, several markets are projected to be big losers in 2014. The worst five housing markets may be surprising.
Most of the housing markets which are expected to decline this year are smaller cities which aren’t necessarily destinations by themselves. Some are pass-through points on the way to more active markets, and some have simply had bad luck such as natural disaster putting a dent in growth. Here are the top five markets Zillow expects to continue to trend downward:
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5. Hagerstown, Maryland
Maryland has a few cities with somewhat distressed housing markets, and Zillow projects Hagerstown will see a price decline of about 1.4 percent this year. With a population of about 40,000, this western Maryland city is part of the Hagerstown-Martinsburg metropolitan area, which brings Maryland together with its neighbor West Virginia. Hagerstown isn’t alone as a troubled market in Maryland, as Baltimore has foreclosure rates far above national averages and is performing poorly across multiple housing indices. Average home prices for the week ending Feb. 12 were about $215,000 according to Trulia.com, another real estate website.
4. Valdosta, Georgia
Valdosta is a city of about 55,000 nears its neighboring Florida border along Interstate 75. With several theme parks nearby, Valdosta is able to snag some tourists looking to rest on their way to Disney. Like many markets in Florida, the housing market isn’t thriving as well as some have hoped. The housing bubble recovery isn’t strong in Valdosta and home prices have continued to go down. Zillow projects Valdosta home prices to drop by another 1.6 percent this year. Currently, average listing prices are about $159,000 according to Trulia.com.
3. Ocean City, New Jersey
Ocean City, hard hit by Hurricane Sandy, is largely dependent upon tourism for its economy to do well. Its permanent residents only total about 12,000 people, but during its peak seasons, 100,000 residents can be found enjoying the beaches, and many of them in vacation properties they own. The impact of the devastation from Sandy has given the housing market here a black eye, and Zillow projects a continued decline in home prices by about 2.1 percent.
2. Elkhart, Indiana
Located about 15 miles south of South Bend, Indiana, and about 110 miles from Chicago, Elkhart has several industries which include manufacturing. Home to 10 recreational vehicle factories, Elkhart is known as the “RV Capital of the World” but it isn’t a big player in real estate. Average home prices there hover around $93,000, whereas national averages are about $240,000, and Elkhart saw home prices peak at $115,000 before the real estate crash. Zillow expects the downward trend to continue with prices falling about 2.5 percent more than current levels.
1. Wichita Falls, Texas
Some markets in Texas, such as the Dallas-Ft. Worth area, are bustling with home sales and are among the strongest housing markets post-crash. Wichita Falls, northwest of Dallas-Ft. Worth, southwest of Oklahoma City and home to about 105,000 people, is not one of those Texas cities with a bright outlook for its housing market this year. As the real estate market recovery began a few years ago, Wichita Falls also saw some improvements, but those gains were not long lasting. Zillow expects to see the real estate market there drop by a very unhealthy 5.7 percent in 2014 as its population also declines.
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