Biggest Buyers Market
When it comes to short sales, investors would do well to take a look at these major metropolitan areas presenting the largest peak-to-present value price drops. There are a variety of reasons each area has experienced larger than average price drops; from over building in Orlando to unemployment in Modesto, pressure on pricing has resulted in once in a lifetime bargains. Other areas such as Port St. Lucie or Lehigh Acres in Florida have been hit by a perfect storm of unemployment, over building and aggressive sub-prime lending practices combined with lax zoning standards to create a dramatic excess of inventory that could take years to absorb. Whatever the original reason, the result is clear...a big buyers market for those in the know.
Other hard hit cities throughout the nation include the following metro areas:
Merced California - With over 62% drop from highest price, the average cost of a home in Merced was $336, 750 in Q2 of 2006 compared to only $127,585 by Q3 of 2009.
Stockton/Modesto California - Both cities have lost roughly 54% of value since their former high in 2006. Today the average price is an affordable $168,000/$151,000.
Las Vegas Nevada - After a huge building boom during 2005 and 2006, Las Vegas residents are walking away from homes previously valued at over $300,000 which are now selling for just under $160,000.
Port St. Lucie Florida - After reaching a peak price of over $281,000 in 2006, prices in Port St. Lucie are lucky to bring in $151,000 as of Q3 of 2009. In fact, nearly all of Florida has been extremely hard hit due to a combination of high unemployment, sub-prime lending standards and an unprecedented building boom. Fort Myers, Cape Coral,
Naples, Marco Island, Bradenton, Sarasota and Venice are just a few of the other cities experiencing in excess of 40% or greater price decline.
Detroit - It should come as no surprise that Detroit and surrounding areas have been especially hard hit due to high unemployment despite the fact the building boom managed to miss much of Michigan. Affordable homes reached a high of $155,000 during 2005 but continued to plummet in price to the new low of just over $107,500 by the end of 2009.
Bottom Line - short sale investors looking for the best prices as compared to former high's should concentrate their efforts on California, Nevada and Florida. Those searching for affordable housing alternatives may do well to examine Michigan and other areas of the mid-west that managed to escape much of the building boom from recent years. The greatest price stability is to be found in the New England states where prices remained relatively unchanged yet present some price reduction as compared to the past few years.
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