The mortgage crisis has created a ripple of upheaval throughout the nation. There isn't one major city that hasn't been impacted by foreclosures and unemployment in these tough economic times. Foreclosures and the high jobless rates present risks and challenges for a troubled economy. The stimulus package is intended to be instrumental to mitigate these risks and challenges. Below are several cities that are considered the riskiest in which to invest in today's market, and how the stimulus package will impact each.
1. Detroit, Michigan - Real estate has hit an all-time low, let me repeat, all time of all times low in Detroit. You can't build a house in this city for as cheap as you can buy one. Heck, you can't build a shed for as low of a price that you can buy a house. Of course, at these very low prices, it's hard to imagine that they could sink any lower. The auto industry has suffered, and people are moving out of Detroit. Some businesses are, too, and taking their jobs with them. Whole neighborhoods are being blighted. Detroit is, indeed, in need of an extreme makeover. It might be worth the risk, however, to invest in some of that real estate - whole blocks of it! As far as the stimulus goes, it looks like it will boost the city's slouching economy through the tearing down of old buildings, funding to create new jobs and a boost to the city's bond ratings with a $75M rainy day fund.
2. Orlando, Florida - Tampa's vacancy rate is one of the highest in the nation - at 7.4%. Orlando's foreclosure rate is at 1.9%. Job growth halted in 2007 and continued to flat line in 2008. In 2008, however, Orlando was ranked eleventh in the nation for the best-performing city overall out of 200 of the largest metro cities nationwide. Adjustable rate mortgages (ARMs) are heavy in this market, making this city at further risk for foreclosures should interest rates take a jump. Look for those deals, though, they're scattered throughout the city. Of course, the stimulus package is intended to help those who are facing foreclosure, so many in this market may definitely benefit from it.
3. Cleveland, Ohio - Just like all other metro areas in the country, this city fell to foreclosures in 2008 after experiencing several months of slowdown in the home buying industry. Foreclosures hit a 3% rate in 2008, sixth worst in the nation. To make matters worse, Cleveland has not experienced job growth since August of 2006, which was only 0.1%. Vacancy rates are at an all-time high, so you could find some really good deals in this market. Cleveland is getting $43.3 billion in stimulus. The intent is to create an abundance of jobs, so maybe new jobs will bring in more residents to advance the slumping housing market.
4. Saint Louis, Missouri - Ranked fourth on the list of the riskiest markets to invest in, St. Louis has been known for its diminished home values for the past three years. In December 2008, home prices had fallen 14.8% from the previous year. The drop was greater from 2006 to 2007 - a 20% decline. This city suffers from a 6.9% jobless rate and suffers from a foreclosure in the ballpark of 1.2%. This market could use a good boost from some aggressive investors. Not only will the stimulus package for this state promote jobs, but it will promote professional jobs, and assist low income families with weatherization, or energy efficiency.
5. Miami, Florida - Homeowners have been slashing prices as the number of homes on the market has steadily climbed. Job growth continues to decline in Miami and has since 2006. Foreclosure numbers in this market are ranked eighth in the nation. ARMs are heavy in this market, too, which means this city could be prime for a foreclosure fallout should interest rates climb any time soon. If that happens, this market would be a setup for amazing real estate deals. Law enforcement will benefit most from the stimulus to this market, although, that still should bring buyers to bang out some new home buys.
Inside Houston helps potential homeowners navigate the Houston real estate market. There site has a search for Houston homes along with general information about Houston real estate and Katy real estate.