The U.S. housing market has been strong, and home prices have been rising steadily since 2012. However, with the pandemic housing boom and low mortgage rates, signs of weakness can appear quickly — including a slowdown in the buying if prices continue to rise in some places.
That doesn’t mean the housing market is headed for a crash. But some places could be more at risk of a downturn than others. To identify those places, GOBankingRates evaluated 500 cities to identify which ones have high rates of foreclosures and underwater mortgages (houses that are worth less than what is owed). GOBankingRates also looked at changes in median home listing prices, the number of days homes are on the market and the percentage of for-sale listings with price cuts and compared those figures with national averages to see which housing markets were lagging behind the nation as a whole.
Florida has the highest number of cities with real estate markets that could be in trouble, followed by Illinois. Keep reading to see which cities in these and other states have housing markets that are turning ugly.
50. Fort Myers, Florida
- Median list price: $249,999
- 2-year price change: -1.4%
- Percentage of underwater mortgages: 6.9%
- Foreclosures: 1 in every 1,921 homes
House prices are dropping in this city in southwest Florida. While home prices nationwide have climbed an average of 9.4% over the past two years, prices have dropped 1.4% in Fort Myers over the same period. Plus, houses for sale spend 105 days on the market in Fort Myers, on average, compared with a national average of 66 days.
49. Newport News, Virginia
- Median list price: $190,000
- 2-year price change: 8.4%
- Percentage of underwater mortgages: 19.2%
- Foreclosures: 1 in every 2,172 homes
The percentage of underwater mortgages in this city in southeastern Virginia near Virginia Beach is more than double the national average of 8.2%. However, the real estate market here hasn’t turned too ugly yet. In fact, the percentage of listed home with price cuts in Newport News — 12.6% — is lower than the national average of 17.5%….
