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The 10 worst real estate markets across America

Determining top and bottom performing markets

When looking at various economic indicators, various lists pop up revealing what analysts name the best and the worst real estate markets across the nation.

BusinessInsider.com has named their ten “sickest” housing markets across America naming vacancy rates, total housing units and unemployment as their three determining factors.

While several of these cities certainly belong in the bottom 10 real estate markets, some do not. Take Oklahoma City for example. This week, CNBC named Oklahoma City as the second best housing market noting factors such as the city’s underwater mortgages being 30.9% below the national average. We look to BusinessInsider’s own note that the city has an unemployment rate of only 4.9%, nearly half of the national average.

Regardless, BusinessInsider’s analysis based on their chosen data points reveals these 10 cities as the worst real estate markets in America:

10. Oklahoma City, OK

Homeowner vacancy rates: 5.2% (6th)
Rental vacancy rates: 9.6% (34th)
Total housing units: 539,077
Unemployment: 4.9%

9. St. Louis, MO

Homeowner vacancy rates: 3.3% (19th)
Rental vacancy rates: 11.4% (18th)
Total housing units: 1,236,222
Unemployment:8.6%

8. Kansas City, MO

Kansas City tied with Detroit for #8.
Homeowner vacancy rates: 3.7% (13th)
Rental vacancy rates: 11% (22nd)
Total housing units: 883,099
Unemployment: 8.4%

7. Detroit, MI

Detroit tied with Kansas City for #8.
Homeowner vacancy rates: 2.4% (32nd)
Rental vacancy rates: 17.2% (3rd)
Total housing units: 1,886,537
Unemployment:11.6%

6. Dayton, OH

Homeowner vacancy rates: 4.7% (7th)
Rental vacancy rates: 10.7% (23rd)
Total housing units: 385,160
Unemployment: 9.3%

5. Baton Rouge, LA

Homeowner vacancy rates: 3.9% (11th)
Rental vacancy rates: 13% (12th)
Total housing units: 329,729
Unemployment:8.4%

4. Atlanta, GA

Homeowner vacancy rates: 5.4% (4th)
Rental vacancy rates: 11.8% (17th)
Total housing units: 2,165,495
Unemployment: 9.7%

3. Memphis, TN

Homeowner vacancy rates: 4% (9th)
Rental vacancy rates: 13.5% (11th)
Total housing units: 550,896
Unemployment:10.1%

2. Indianapolis, IN

Homeowner vacancy rates: 5.2% (5th)
Rental vacancy rates: 13.5% (10th)
Total housing units: 757,441
Unemployment: 7.8%

1. Tucson, AZ

Homeowner vacancy rates: 6.8% (1st)
Rental vacancy rates: 15.9% (6th)
Total housing units: 440,909
Unemployment: 7.8%

According to BusinessInsider.com, the methodology was: Census data on the 75 largest U.S. metropolitan areas and ranked the cities with the highest overall vacancy rates for both homeowner vacancy and rental vacancy for the second quarter of 2011. We picked the cities with the worst rates in each of the two categories to create meta-data ranks. We then removed the cities that had either improved homeowner vacancy rate in either the last twelve months or the last quarter. We believed that any sign of improvement in homeowner vacancies, the more telling of the vacancy rates, should disqualify a city.

To improve our analysis, we also looked at unemployment rates for these cities provided by the Bureau of Labor Statistics. We also used historical median home prices, as provided by the National Association of Realtors.

The analysis shows that some cities have home vacancy rates over 5% and rental vacancy rates over 10%. Obviously, these levels of unused inventory have the effect of driving down both home and rental prices month after month. It also means that there is comparatively little demand for the purchase of new or existing homes. These ten markets are essentially dead as far as real estate prices and sales activity are concerned.

As we’ve mentioned in previous articles, home sellers are at risk when they put their home on the market. Information about their home is public and even agents don’t always know the warning signs until it’s too late. Below is an article about an issue we’ve come across before. Scammers take the listing information of a home and post it as a rental on other websites. If you are listing your home and you feel like anything is fishy, report it to your agent immediately. It’s better to be safe than sorry!

Daily Real Estate News | June 9, 2011 |

Some home owners are getting a surprise when a person shows up on their doorstep, with a lease agreement in hand, saying that he or she is renting out their home, which isn’t for rent but for sale. Law enforcement and real estate professionals are finding a growing scam involving for-sale listings being promoted as rentals–without home owners’ consent.

Scammers are taking listing information of homes for-sale–including photos–and then re-posting that information on rental sites and tweaking it to pass the home off as a rental. The scammers then use a fake lease agreement and collect rent from unsuspecting consumers. And when the scammers don’t present keys for the property, they give the unsuspecting renter permission to call a locksmith to gain access to the home.

Les Sulgrove, president of the Des Moines Area Association of REALTORS®, recently issued a warning to association members about the scam. He suggested real estate professionals set up Google alerts for the home addresses they’re listing so they’ll learn if their clients’ information is being misused on another site. “All it takes is cutting, pasting, and changing some key pieces of data,” Geoff Greenwood, spokesperson for the Iowa Attorney General’s office, told the Des Moines Register. “People find out the hard way what they paid for wasn’t for sale or for rent.”

Source: “Growing Online Scam Uses Legitimate for-sale Home Listings to Trick Renters,” Des Moines Register (June 5, 2011)

The first thing home buyers will look at when they arrive at your home is your front yard. The color of your home, the landscaping, walkways, and if the home is attractive from the outside, will be all that is on their minds. Regardless of the fact that you just put new appliances in the kitchen, or you have gorgeous hardwood floors, if the curb appeal is not attractive, many homeowners will never make it inside your home.  Ensure that your home is appealing from the curb, with these 10 ideas to attract your future home buyers.

1.)   Color of your exterior home: Before you start on the yard, start on your physical exterior of your home. Look at neighboring homes, and drive through the neighborhood to get the general aesthetic, and color palette of other homes. While your house doesn’t have to be the same color, it should be within the same historic or aesthetic color palette as neighboring homes. Consider repainting your home, or pressure washing siding or brick.

2.) Accentuate the accents of your home: Whether you have shutters that adorn the sides of your exterior windows, or columns that greet potential home buyers on the front porch, ensure they are all immaculate in restoration, upkeep and they are in good condition. Ensure that low planters, brick walls, fences, exterior lighting, and garage entryways are free of debris and all damaged areas have been repaired.

3.) Interior finishes don’t hinder the outside appeal: For many homeowners the thought of standing outside their home and looking back at the house isn’t considered. Interior finishes such as window treatments; window hanging decorations, and window obstructions, such as furniture in front of windows can be seen from the curb. Ensure furniture, window treatments, and other interior elements cannot be seen from the street, or they are in complimenting colors to the outside of the home.

4.) Walkway and entry areas: The next area homebuyers will look at are the entryways to get into your home. Consider the driveway, sidewalk, stairs, and stepping stone pathways around your home and clear these of weeds, debris, and pressure wash concrete, brick, and pavers to give a clean appeal to your stepping areas. If preventable, try not to park cars in the driveway, especially if they leek oil and leave unsightly stains on the concrete.

5.) Bring in unsightly items: Curb appeal is also associated with how your family lives on a day-to-day basis while your home is up for sale. Ensure toys, garbage cans, yard debris filled trash bags, and garden tools are picked up immediately after using them. Items left out for days on end, gives your home an unkept look, and forms opinions in homebuyers minds about the upkeep of your home.

6.) Manicured grounds are ideal: Take a look at your lawn area and determine the condition of the grass and surrounding plant beds. While a newly cut and trimmed lawn is ideal, so is healthy landscaping. If you have dead spots, weeds, and unsightly poor areas of your lawn, consider hiring a lawn service or landscaping professional to get your lawn looking ideal as possible.

7.) Year-round beauty is essential: Homebuyers purchase homes year-round, which means your foliage and grounds shouldn’t have an excuse to not look attractive. From colorful foliage in the warmer months, to well manicured structure and form of trees and evergreen plants in the colder months. Shake off the excuse that the season has to dictate how well you keep up your curb appeal!

8.) Replace welcoming elements: Believe it or not, elements such as the mailbox, house numbers and door hardware can make a big impression on homebuyers. If you’ve lived in your home for a while, consider buying new elements and replace the old ones. These small elements can send a welcoming impression and are relatively inexpensive to replace.

9.) Spruce up outdoor furniture: Whether you have garden furniture on your front porch, or you have outdoor lounging furniture on your back patio, spruce up their appearance with fresh cushions, throw pillows, and newly painted or pressure washed surfaces. Similarly, to the furniture inside your home, leisure areas are always appealing to homebuyers.

10.) Add instant color: If you want to bring instant color to your curb appeal, consider planters with seasonal plants at your front door, positioned throughout your yard, and at the sides of your garage entry. Potted plants will add instant color to the overall appearance of your home, and will make homebuyers happy to come see more inside.

Curb appeal of your home doesn’t have to be difficult; in fact many homeowners feel sprucing up the exterior is easier than the interior! Use these 10 tips to welcome homebuyers and make them want to venture to the inside of your home. Many a Realtor has mentioned that homebuyers make up their mind about your home within15 seconds of seeing your home. Make them want to spend countless minutes in your home with appealing curb appeal.

With falling home prices and higher inventories, most of the public views real estate as a “buyer’s market,” in which buyers hold more of the control and sellers will more eagerly accept lower offers just to sell.

Not so fast, say buyers and sellers. More buyers are finding the sellers in the driver’s seat.

Buyer Young Hammack gave up looking for homes for a while after being outbid on three properties in California. “It’s a false buyer’s market,” Hammack says. “If you think prices are cheap, wait until you start putting offers in.”

Many sellers may be unable or unwilling to lower their home prices — mostly because they may be underwater on their mortgage — so buyers are increasingly finding lower offers than list price denied. Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say.

Traditional buyers also are finding even buying a foreclosure can be difficult as they’re increasingly outbid by investors who are willing to pay cash.

“There’s a shortage of attractive inventory,” says Glenn Kelman, chief executive of Redfin Corp. “Customers just keep getting outbid on the houses that they want.”

Real estate professional Steve Capen with Keller Williams Realty in St. Petersburg, Fla., says that the homes most in demand among buyers often don’t require much repair work and are located in good school districts and choice neighborhoods near transit hubs.

“What’s selling is the cream of the crop, and they sell fast,” Capen says. “If it’s not cream of the crop, it’s getting hammered.”

Source: “Buyers’ Market? Stressed Sellers Say Not So Fast,” The Wall Street Journal online (April 25, 2011)

By Melissa Dittmann Tracey, REALTOR® Magazine

Little things can make a big difference in how much you ultimately sell a property for, according to a group of New York brokers who say just a few small, smart improvements to a home can increase the sales price by 5 to 10 percent.

They’ve calculated it down to a science. In a recent New York Times article, “To Sell an Apartment, No Detail Is Too Small,” brokers in New York City share how seemingly small defects in a home can drastically affect the home’s final sales price and how just a few small staging upgrades–like throw pillows–can actually increase the value.

Here are some examples of what these New York brokers have found that can impact a sales price. (Keep in mind these are based on New York rents so the prices reflected below may be higher than many other markets.)

WHAT CAN DECREASE A PROPERTY’S VALUE

• Chipped plaster or broken bathroom tiles: Knock $500 to $5,000 off an offer
• Dirty rugs: Subtract $5,000
• Clutter: Subtract 5 to 15 percent from sales price

WHAT CAN INCREASE A PROPERTY’S VALUE

• Fresh towels and throw pillows (estimated cost: $700): Add $25,000 to sales price
• New lights (cost: $2,000 replacing lighting fixtures and $250 for a professional lighting designers expertise): Add $32,500
• Professional paint job (estimated cost: $10,000): Add $50,000 to the sales price
• Replacing cabinets (estimated cost: $20,000 on new kitchen cabinets and paint): Add $107,000

Now that spring is here, buying and selling homes is an objective for many of you, who have waited patiently all winter to start your home search. Whether this is your first home or you are a veteran, there are amenities that you should keep an eye out for when looking to buy a home. While many people can stage and make a house look good, remember once their belongings are taken with them, the house will remain. Therefore, look at these 10 amenities when considering buying a home, to help assure you of getting a worthwhile investment.

1. Look at the kitchen appliances: One of the most expensive parts of homes are the appliances. The age, care, and condition of the kitchen appliances in the home will have a direct impact as to whether you will need to buy new ones, or if they will need to be serviced anytime soon. Go ahead… open the refrigerator!

2. Finishes and materials: Once you know your price range, know what finishes are expected in your price point. Less expensive home will use vinyl flooring, lower end carpet and possible plastic laminate counters in kitchen and baths. While higher end homes may use more resilient flooring such as tile and wood, and solid surfacing in kitchens, such as granite or slate. Knowing what is expected in your price category will help you determine if the home you’re looking at is a deal or not.

3. Pay attention to the ceiling: The ceiling is a telltale place for water spots to show from possible leaks and cracks from structural damage. Pay attention to cracks in drywall, wall surfaces, and where the ceiling meets the wall for warning signs.

4. Outdoor areas of the home: Don’t forget to look at the roof, gutters, downspouts, and inspect the outdoor condition of the home. Especially older homes, try to find out from your Realtor or the previous homeowner when maintenance or replacements have been conducted in the past.

5. Look at the neighborhood: Yes, your house is important, but the safety, location, and proximity to several amenities should be considered as well. Research nearby schools if you have children, as well as travel time to work, stores, and how your neighborhood is laid out. Feel just as comfortable with your neighborhood as your house.

6. Upgrades versus standard amenities: If you are purchasing a brand new home from a builder, know what are upgrades versus standard amenities when looking at homes. Most model homes will have quite a few upgrades to show the homes in their “highest quality” state. While upgrades don’t mean the home is built any better or worse than homes with less upgrades. Once again, this information will help you be an informed home buyer. Don’t allow yourself to buy a more expensive home than you budgeted for because of upgrades. Knowing your price point will keep you disciplined.

7. Bathroom amenities: Similarly to the kitchen, look at the bathroom plumbing fixtures, shower/tub to see what condition these amenities are in. For older homes, if you know you will need to do a remodel or renovation in the future, you should be prepared to know this reality when looking at the home, not after you move in.

8. Major systems: Take a look at the heating/air conditioner unit, hot water heater, and other major systems in the house when looking at homes. These systems can be costly if they are left in disrepair for too long. While you may not need to look at these until you are settling on one specific house, its good to keep on your checklist.

9. Homeowner added amenities: For resale homes, many homeowners have already upgraded the home on their own. From adding a swimming pool and deck in the backyard to crown molding and built in cabinets in the living room. Most homeowners will state what upgrades they have put into the house, and what the approximate cost it was to upgrade. Use this information when comparing like properties in a similar neighborhood, city, etc…

10. Look for a paper trail: Especially when buying a resale home, seek a paper trail, or a list of receipts and/or documents of repairs, upgrades, and services added to the home over the years. Similarly to buying a used car, the more informed you are, the more ideal buying a home from that individual will feel. Amenities in a home can be attractive, but if the homeowner can’t tell you who upgraded it and when, you may want to move on to the next house.

Looking for a new home can be exciting, and at times nerve racking! Even though it can be both of these, looking for a home is an essential part of life, and believe it or not, it is the best investment you can ever make. Decide what amenities you have to have, and which ones you’d prefer, but don’t have to have. Use this 10 amenities list to help you know what to look for when looking for the perfect home.