Published October 19, 2011
| 24/7 Wall St.
The number of homes listed for sale in the largest cities in the country has fallen 20% in the past year, according to a report released last week by Realtor.com. While the number of homes on the market has dropped around the country, the average number of days that listed homes have been on the market has remained the same: 107 days. 24/7 Wall St. has identified the 10 cities where homes are on the market for the longest time.
When it comes to the housing crisis, foreclosures and home prices often dominate the headlines. Other information, however, is just as important to a complete understanding of the crisis. Chief among these are the amount of time homes are on the market and whether the total inventory of available homes has changed. These are better indications of supply and demand than any other data.
Wilmington, N.C., tops the list with houses remaining on the market for 164 days. That compares to a city in bad shape, like Detroit, where the number is only 65 days. Wilmington’s figure is not necessarily a bad sign. A city where listed homes have been on the market for a long period may be one where many home owners still believe there is a chance they can make a sale. Detroit’s figure is probably low because people are no longer listing their homes for sale due to a lengthy and depressed housing market.
The one figure that does, often, coincide closely with high number of days on market is foreclosures. In eight of the 10 cities where homes are on the market for the longest period, foreclosures were at or well above the national average. Clearly, people who must sell their homes keep them on the market as long as they can. Eventually, particularly in cities with many days on market, the ability of these home owners to pay their mortgage runs out.
Another reason that homes in many of these cities have been on the market for so long is that they are among those that had rapid population growth between 1990 and 2010. This caused a rapid expansion of inventory. The cities became overbuilt as the housing crisis began to drive up foreclosures, particularly among homes with subprime mortgages.
Notable among the cities that added large numbers of people are Tallahassee. The population of the Florida state capital rose over 20% from 1990 to 2000 and another 20% from 2000 to 2010, according to the Census Bureau. West Palm Beach grew even more rapidly over the same 20 years. Gainesville grew by 30% from 2000 to 2010. Florida, which has five cities on this list, has the second highest foreclosure rate of any state, trailing only Nevada, according to RealtyTrac. Florida’s population rose by approximately 30% each decade from 1970 through 2010.
The most obvious sign that the housing market has begun to recover will be when prices begin to rise and foreclosures abate. There will be other signals. Days on market for homes may actually rise for some period nationwide. Home owners seeing a market recovery will put their homes on the market. As a consequence, inventory will rise. The real test of a recovery will be how quickly this increased inventory eventually will fall.
In order to identify the cities where homes stay on the market the longest, 24/7 looked at pricing and listing data provided by Realtor.com. For these cities, we identified whether the number of homes available increased or decreased, as well as how much prices have changed during that period. We also included most recent foreclosure rates provided by Realtytrac, and compared those to the national average.
These are the 10 U.S. cities where homes will not sell:
10. Tallahassee, Fla.
> Time on market: 137 days
> Change in # of listings: -20.32% (53rd largest)
> Median list price: $159,900 (104th highest)
> Foreclosure rate: 1 in every 747 homes
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.
9. West Palm Beach-Boca Raton, Fla.
> 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.
8. Asheville, N.C.
> 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.
7. Punta Gorda, Fla.
> 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.
6. Savannah, Ga.
> 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.
5. Reading, Pa.
> 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.
4. Gainesville, Fla.
> 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.
3. Naples, Fla.
> 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.
2. Myrtle Beach, S.C.
> 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.
1. Wilmington, N.C.
> 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.