The younger you are, the more freaked out you are likely to be by the housing market crash.
A new paper by Federal Reserve Bank of Boston economists used consumer sentiment data collected in the Michigan Survey of Consumers over the summer to try to find out how the housing market's terrible state of affairs was affecting the willingness to buy a new home.
Age mattered, which suggests that a new generation may be coming along that will cast a wary eye at home ownership for a long time to come. The finding also suggests a new headwind to future growth levels, given that it's hard for the economy to achieve a better rate of growth when the housing sector remains moribund.
The Michigan data suggests that younger survey respondents "are relatively less confident about home ownership after larger declines, while older respondents are relatively more confident," the paper said.
The number of homes on the market has decreased more than 20% 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% in the same period. The city saw a huge spike in loan defaults recently. In August, defaults increased 81% 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% (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% from a year ago. The median home listing price has shot up more than 10% 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% (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% (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% (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% in one year. Despite the drop in inventory, home prices declined by 5.19% 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% in the past year. This is the greatest drop in the country.
Time on market: 147 days
Change in # of listings: -11.95% (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% (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% 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.
Time on market: 156 days
Change in # of listings: -37.83% (6th largest)
Median list price: $369,000 (12th highest)
Foreclosure rate: 1 in every 356 homes
One out of every 356 homes is foreclosed in Naples, Florida — nearly twice the national average. Last week, Republican Representative Kathleen Passidomo filed the Florida Fair Foreclosure Act. The bill is designed, she says, to streamline the foreclosure process. According to real estate attorney Kevin Jursinski, who was quoted on NBC-2, the problem with Naples foreclosures, is that “It’s the fact that we had an issue with so many foreclosures at one time that so swamped the system that it made it hard for the judges and it taxed the system quite a bit.” In the past year, the median home listing price has increased by more than 23%, the third biggest jump in the country.
Time on market: 161 days
Change in # of listings: -14.00% (91st largest)
Median list price: $174,950 (82nd highest)
Foreclosure rate: 1 in every 207 homes
Myrtle Beach sits in Horry County, an area that has more than triple the number of houses for seasonal use than any other county in North Carolina, according to The Sun News. The areas with the highest vacancy rates are along the ocean, where there are many second homes. According to a Realtor quoted in the paper, foreclosures are more common in the oceanfront, vacation properties because homeowners who cannot afford the mortgage are more likely to give up a second home than their primary residence.
Time on market: 164 days
Change in # of listings: -21.31% (48th largest)
Median list price: $244,250 (36th highest)
Foreclosure rate: 1 in every 4,504 homes
Despite the fairly soft housing market, economists at University of North Carolina Wilmington predict that the local economy is set to recover. Three of Wilmington’s counties are forecast to grow 2.2% next year, ahead of the national forecast of 1.6%. As evidence, the median list price for a home in the city has increased 2.76% in the past year. Wilmington, like Asheville, has an exceptionally low foreclosure rate — just 1 in every 4,504 homes were foreclosed upon in September.