Residential Woes: California Isn’t the Only One Crying

One of MHN’s daily news items today — Northern Calif. Area Has Worst Housing Market in a Quarter Century — touched on California’s continuing real estate problems. The state was one of the hardest hit in the recent housing slump because it was one of the fastest rising in terms of property value and new construction a few years ago.

The higher the climb; the harder the fall.

But, of course, California isn’t the only U.S. area that’s seen home prices skyrocket and then plummet. An interesting article today from NuWire, a Web site featuring interviews and articles written by investors, touches on some of the most overdeveloped (their phrase not necessarily ours–we’d go with "in need of a correction ") areas in the country.

The article identified the following locales:

• Vegas, Baby, Vegas. The gambling oasis went from high roller status to bust. During 2005 and 2006, more than 72,000 residential construction permits were issued, according to NuWire. Which is too bad, because home inventory shot up to a new high this June — 40 percent of which are vacant — and new home sales this year through May were down 43.8 percent from 2006.

Condos are lingering on the market for a whopping 335 days, according to a National Association of Residential Real Estate Investment
Advisors advisor.

• Phoenix. Love the dry heat, don’t love the housing situation: The Phoenix area gained 696,000 new people from 2000 to 2006 — more than anywhere else in the U.S., according to the Census Bureau. But wait! That’s still not enough people to fill the area’s homes.

Their vacancy rate rose 2.1 percentage points between 2005 and 2006, NuWire reported — and that’s back when the market was better.

• Orlando. Despite its longtime status as a family vacation destination, Orlando has the highest homeowner vacancy rate increases of any city in the nation — 5.2 percent. Home sales in the area fell by 42.65 percent in 2007 from 2,361 last summer to 1,354 this July 2007, according to NuWire.

In addition, condo sales dropped 64 percent
during the same time period, and 40 percent in August, the Orlando Business Journal reported.

• Miami. The homeowner vacancy rate jumped up to 3.4 percent in 2006, according to the U.S. Census Bureau. Condos are selling for half their purchase price, NuWire says.

Florida’s market has had a hard real estate year. As a result, Coldwell Banker just restructured its entire Florida operation, reducing its eight regions into two offices to cover the state, Miami Today News reports.

• West Palm Beach, Fla. It’s taking 152 days to sell a Palm Beach property — so says ZipRealty, a California-based real estate company.

The median price of a previously owned
single-family home in Palm Beach County declined 5 percent in July,
falling to $372,200 from
$390,100 in July 2006, the Palm Beach Post reported.

Stay tuned to MHN Out and About for future updates on areas affected by the housing slump.