The number of homes listed for sale in the largest cities in the country has fallen 20 percent in the past year, according to a report released last week by Realtor.com. While the number of homes on the market has dropped around the country, the average number of days that listed homes have been on the market has remained the same: 107 days. The good folks at 24/7 Wall St. have identified some of the cities where homes are on the market for the longest time.
When it comes to the housing crisis, foreclosures and home prices often dominate the headlines. Other information, however, is just as important to a complete understanding of the crisis. Chief among these are the amount of time homes are on the market and whether the total inventory of available homes has changed.
These are better indications of supply and demand than any other data.
Wilmington, N.C., for instance, has houses remaining on the market for 164 days. Now compare that to Detroit where the number is only 65 days. Wilmington’s figure is not necessarily a bad sign. A city where listed homes have been on the market for a long period may be one where many home owners still believe there is a chance they can make a sale. Detroit’s figure is probably low because people are no longer listing their homes for sale due to a lengthy and depressed housing market.
The figure that often coincides closely with high number of days on market is foreclosures. In the cities where homes are on the market for the longest period, foreclosures were at--or well above--the national average. Obviously, people trying to sell their homes will keep them on the market as long as they can. Eventually, particularly in cities with many days on the market, the ability of these home owners to pay their mortgage runs out.
Another reason that homes in many of these cities have been on the market for so long is that they are among those that had rapid population growth between 1990 and 2010. This caused a rapid expansion of inventory. The cities became overbuilt as the housing crisis began to drive up foreclosures, particularly among homes with subprime mortgages.
Notable among the cities that added large numbers of people are Tallahassee. The population of the Florida state capital rose over 20 percent from 1990 to 2000 and another 20 percent from 2000 to 2010, according to the Census Bureau. West Palm Beach grew even more rapidly over the same 20 years. Gainesville grew by 30 percent from 2000 to 2010. Florida, which has several cities on this list, has the second highest foreclosure rate of any state, trailing only Nevada, according to RealtyTrac. Florida’s population rose by approximately 30 percent each decade from 1970 through 2010.
The most obvious sign that the housing market has begun to recover will be when prices begin to rise and foreclosures abate. But there will be other signals. Days on market for homes may actually rise for some period nationwide. Homeowners seeing a market recovery will put their homes on the market. Consequently, inventory will rise. The real test of a recovery will be how quickly this increased inventory eventually will fall.
In order to identify the cities where homes stay on the market the longest, 24/7 Wall St. looked at pricing and listing data provided by Realtor.com. For these cities, they identified whether the number of homes available increased or decreased, as well as how much prices have changed during that period. They also included the most recent foreclosure rates provided by Realtytrac, and compared those to the national average.
Here are some of the cities where selling a home has become extraordinarily difficult:
Time on market: 137 days
Change in # of listings: -20.32 percent (53rd largest)
Median list price: $159,900 (104th highest)
Foreclosure rate: 1 in every 747 homes
The number of homes on the market has decreased more than 20 percent in Tallahassee over the past year. Despite the drop in supply, home prices have only increased slightly, with the median list price increasing 3.5 percent in the same period.
The city saw a huge spike in loan defaults recently. In August, defaults increased 81 percent from the month before. According to the Tallahassee Democrat, this is causing the foreclosure rate to increase.
Time on market: 138 days
Change in # of listings: -26.47 percent (28th largest)
Median list price: $209,500 (49th highest)
Foreclosure rate: 1 in 238
In September, the West Palm Beach region had more listings than all but a handful of major U.S. cities. However, that number is actually down more than 26 percent from a year ago. The median home listing price has shot up more than 10 percent since September 2010, the 11th greatest increase among the 146 cities reviewed in the report.
According to Alex Ferreras of the Palm Beach Post, banks are cutting down significantly on the number of homes they foreclose in the region. In 2010, the foreclosure rate of 1 in 238 was one of the highest in the U.S.
Time on market: 140 days
Change in # of listings: -15.88 percent (77th largest)
Median list price: $250,000 (29th highest)
Foreclosure rate: 1 in every 3,907 homes
Asheville is located in the Appalachian mountains and is regularly listed has a top vacation destination by travel magazines. The region has one of the highest median home list prices in the country, at $250,000. The Asheville region had an extremely low foreclosure rate of 1 in 3,907 last year compared to 1 in 605 in the U.S.
Time on market: 142 days
Change in # of listings: -30.77 percent (17th largest)
Median list price: $169,900 (87th highest)
Foreclosure rate: 1 in every 366 homes
Punta Gorda is one of several Florida cities where home values have fallen more than national average. According to housing experts, most of this is due to overbuilding before the housing market collapsed. Punta Gorda is located on Florida’s west coast between larger cities with significant housing problems — Tampa/St Petersburg and Naples.
Home ownership in Punta Gorda is high, among the top ten cities in the U.S. This may be due to in part to the inability of people to sell their homes.
Time on market: 147 days
Change in # of listings: -35.66 percent (11th largest)
Median list price: $199,900 (51st highest)
Foreclosure rate: 1 in every 541 homes
Savannah has seen one of the largest decreases in home listings in the country, with a drop of more than 35 percent in one year. Despite the drop in inventory, home prices declined by 5.19 percent over this same period.
There are currently only 1,484 listings in the city. The median time on the market for these listings has fallen more than 50 percent in the past year. This is the greatest drop in the country.
Time on market: 147 days
Change in # of listings: -11.95 percent (100th largest)
Median list price: $184,900 (69th)
Foreclosure rate: 1 in every 771 homes
Reading is in the old industrial section of Pennsylvania, which runs between Allentown and Harrisburg. The city has nearly 90,000 residents and is among the poorest cities in the U.S. median income for the city is only $28,098.
Reading topped the list of cities with more than 65,000 people with the highest proportion of residents living in poverty, according to the New York Times, a fact that will continue to hurt Reading’s housing market for the foreseeable future.
Time on market: 150 days
Change in # of listings: -20.36 percent (53rd largest)
Median list price: $164,900 (96th highest)
Foreclosure rate: 1 in every 935 homes
Like many cities in Florida, Gainesville has a large condo market. The Gainesville Sun reported that in August “condo sales were up 13 percent, with 51 sold in August.” That gain was almost certainly due to favorable prices.
Condo median prices dropped 13 percent to $69,400 from $79,500, according to the paper. It may take years for the Gainseville real estate market to recover. It is inland from one of the hardest hit regions in the U.S. — Florida’s Atlantic coast, which includes cities where home prices are down more than the rest of the country.
(Douglas A. McIntyre, Charles Stockdale, Michael B. Sauter/Becket Adams--24/7 Wall St./The Blaze)