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The Riskiest Housing Markets In America [Do you live anywhere near these cities?]
Zero Hedge ^ | 06/30/2014 | Tyler Durden

Posted on 06/30/2014 12:35:57 PM PDT by SeekAndFind

As homeownership rates tumble, perhaps it is not just the stagnation of income or piling up of 'other debts' disabling any organic buying frenzy; perhaps, as Bloomberg breaks down, it is the realization that real-estate is nothing less than another boom-bust roller-coaster ride. ??When so much wealth is tied up in one asset, the risk -- or stability -- of a local market can mean a lot to a homeowner and Bloomberg has quantified the 'riskiest' (and most stable) home markets in America... not Vegas, not Phoenix, and not LA...

 

Full Breakdown here

 

And the stablest real estate markets?

5. Raleigh, North Carolina
Risk of loss: 9%
Worst year: -5% (July 1981 - June 1982)

4. Nashville, Tennessee
Risk of loss: 9%
Worst year: -4% (July 2010 - June 2011)

3. Louisville-Jefferson County, Kentucky
Risk of loss: 3%
Worst year: -3% (April 1981 - March 1982)

2. Pittsburgh
Risk of loss: 0%
Worst year: -7% (July 1980 - June 1981)

1. Buffalo, New York
Risk of loss: 0%
Worst year: -4% (July 1994 - June 1995)

??Methodology: For each of the 50 largest housing markets, Zillow.com analyzed average home prices over 117 rolling five-year periods since 1979, as far back as reliable data go. The “risk of loss” is the percentage of those periods that created negative returns for homeowners. In the case of ties between markets, those with the bigger drop in their worst years were ranked as riskier.



TOPICS: Business/Economy; Society
KEYWORDS: housing; housingbubble; risk

1 posted on 06/30/2014 12:35:57 PM PDT by SeekAndFind
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To: SeekAndFind

What do the numbers in the right hand column represent? And when you say “risk of loss” is 9% somewhere, what does that mean?


2 posted on 06/30/2014 12:40:26 PM PDT by grania
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To: SeekAndFind

As long as the commie bastard in the white hut is in control, ANY economic scenario or financial investment will be risky.


3 posted on 06/30/2014 12:40:33 PM PDT by The Sons of Liberty ("Our brethren are already in the field! Why stand we here idle?" - Patrick Henry, 1775)
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To: SeekAndFind

Wonder how Dalton, GA stacks up?


4 posted on 06/30/2014 12:40:39 PM PDT by MHGinTN
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To: SeekAndFind

The top cities did not surprise me but Dallas /fort Worth did
Our appreciation of home values as pretty tame during the wild ride.
and our population growth has been in top 10 in nation for years. We have companies relocating here every moth * Toyota USA is bringing over 5 K pretty well paid people here this and next year)
right now we don’t have enough homes on the market and still the appreciation % is not huge
so I wonder what the risk is


5 posted on 06/30/2014 12:42:57 PM PDT by RWGinger
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To: SeekAndFind

1. Buffalo, New York
Risk of loss: 0%
Worst year: -4% (July 1994 - June 1995)

****************************************

Risk of loss: 0%, because prices are as low as they will ever be.


6 posted on 06/30/2014 12:44:43 PM PDT by Jeff Chandler (Conservatism is the political disposition of grown-ups.)
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To: grania
The “risk of loss” is the percentage of those periods that created negative returns for homeowners.

From 1979 on, the "periods" are rolling five-year increments, which means 1979-1984, then 1980-1985, 1981-1986, etc.

In each of those periods, they calculated the likelihood of loss (aggregate for the area) on a house sale. So, "9% risk of loss in Raleigh" means that the average sale was at a loss in 9% of the periods.

It's just a snapshot stat. You and I might own similar houses side-by-side, but I bought mine in 1970 and you bought yours in 2012. I have a better chance of selling mine for a gain, today, than you do!

7 posted on 06/30/2014 12:47:35 PM PDT by Tax-chick (I don't feel obligated to provide you with a non-boring gun.)
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To: SeekAndFind

The 5 “most stable” are there for a reason.

The bottom fell out a long time ago and they haven’t recovered.

We’ll hang on to what we have in the 11th “most risky” market.....


8 posted on 06/30/2014 12:47:51 PM PDT by G Larry (Which of Obama's policies do you think I'd support if he were white?)
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To: Tax-chick
Does it represent how much of the value of the house was lost?

I'm curious because in places such as Cleveland, a lot of houses lost value, but most not very much. That's because there was never a housing bubble here. The only exception is inner city neighborhoods that self-destructed.

9 posted on 06/30/2014 12:51:14 PM PDT by grania
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To: SeekAndFind

People in the past, such as my parents,wanted a home ,pay it off and live there for the rest of their lives.
A home is no longer used for that purpose.


10 posted on 06/30/2014 12:53:26 PM PDT by peteyd (A dog may bite you in the ass,but it will never stab you in the back.)
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To: SeekAndFind; grania
What about the risk of GAIN?

Risk is the price you pay for opportunity. Sorry, but you risk GAINING a lot more on a property in San Diego or L.A. (live there for awhile and you'll see why -- they have the world's most ideal climate and vibrant economies and kaleidoscopic professional opportunities in spite of California government) than you would on a piece of property in Raleigh North Carolina or Pittsburth.

Yeeeesh.

11 posted on 06/30/2014 12:54:00 PM PDT by Finny (Thy word is a lamp unto my feet, and a light unto my path. -- Psalm 119:105)
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To: SeekAndFind

We take a 2 mile walk every night, in a part of the country with economic growth, conservative politics and relatively low unemployment. Just along the route of our walk we can identify at least 8 abandoned homes with no realty sign in the yard. In the next town 4 miles away, we have seen dozens more as we drive around. The homes tend to be fixer uppers.

This tells me there are a whole bunch of folks who don’t have the cash to even get their toe in the housing market, creating a glut of inventory.


12 posted on 06/30/2014 12:56:40 PM PDT by lurk
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To: grania

It just says “created negative returns for homeowners,” without detailing (in the excerpt ;-) exactly what that means. It could mean they looked at each transaction, identified the gain/loss, and then averaged the amounts. That would take into account the magnitude: fewer large losses and more small gains could still give you a “net loss” period.

On the other hand, they could have looked at each transaction, marked it (+) or (-), and chosen the direction with most transactions. That could not recognize the amounts of gains/losses.

My immediate area had a similar result to what you describe in Cleveland over the last decade: a period of a few years in which there were modest losses as a percentage of total price.


13 posted on 06/30/2014 12:57:18 PM PDT by Tax-chick (I don't feel obligated to provide you with a non-boring gun.)
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To: SeekAndFind

Dallas-FW?


14 posted on 06/30/2014 12:58:21 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: G Larry

Detroit must be really really stable


15 posted on 06/30/2014 12:59:52 PM PDT by GeronL (Vote for Conservatives not for Republicans)
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To: Finny
Risk is the price you pay for opportunity.

Or, as they taught us in Principles of Finance, "Risk is the uncertainty of an outcome." This article just happens to have reduced that to "risk of loss," just as a conservative mutual fund will emphasize the "risk of losing your capital" (small) rather than the "risk of a really high return" (also small) .

A homebuyer can make his own choices regarding his risk-tolerance. It's perfectly reasonable to control your downside risk, if you can't afford a loss, even if that means limiting your upside potential.

16 posted on 06/30/2014 1:03:45 PM PDT by Tax-chick (I don't feel obligated to provide you with a non-boring gun.)
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To: MHGinTN

Nothing happens in Dalton GA. its just is.


17 posted on 06/30/2014 1:04:40 PM PDT by lostboy61 (Lock and Load and stand your ground!)
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To: SeekAndFind

Add to it any city near a military base. A new drawdown is coming, and the base personnel reductions are staggering.


18 posted on 06/30/2014 1:05:10 PM PDT by lacrew (Mr. Soetoro, we regret to inform you that your race card is over the credit limit.)
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To: All

I would have to say all of New England is risky. We lost close to 40% on our house when we sold because the market was so inflated. We should have just rented.


19 posted on 06/30/2014 1:06:42 PM PDT by newnhdad (Our new motto: USA, it was fun while it lasted.)
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To: grania

>> What do the numbers in the right hand column represent? And when you say “risk of loss” is 9% somewhere, what does that mean?

They’re “Zillow numbers”. Zillow numbers don’t mean squat.


20 posted on 06/30/2014 1:14:21 PM PDT by Nervous Tick (Without GOD, men get what they deserve.)
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To: lostboy61

http://www.youtube.com/watch?v=zjbqjjvaS44


21 posted on 06/30/2014 1:14:40 PM PDT by Tax-chick (I don't feel obligated to provide you with a non-boring gun.)
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To: Tax-chick

Good response! Thanks!


22 posted on 06/30/2014 1:20:25 PM PDT by Finny (Thy word is a lamp unto my feet, and a light unto my path. -- Psalm 119:105)
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To: SeekAndFind

Properties in some parts of Denver are selling before they even list.


23 posted on 06/30/2014 1:21:05 PM PDT by CodeToad (Arm Up! They Are!)
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To: Finny

You’re welcome.


24 posted on 06/30/2014 1:26:17 PM PDT by Tax-chick (I don't feel obligated to provide you with a non-boring gun.)
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To: SeekAndFind

There are much better determinations of risk.

For example: Ulcer Index measures not only the depth of draw down loss, but also the length of time to recovery. I have to think Detroit and Cleveland, would win this.

You can’t compare a temporary loss in Los Angeles to a permanent loss in Detroit using this apples and oranges Zillow methodology.

Also, consider plain old downside deviation (i.e. standard deviation of the downside only).


25 posted on 06/30/2014 1:46:42 PM PDT by cicero2k
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To: SeekAndFind
"Do you live anywhere near these cities?"

Sure do - No. 1 - 35 miles SW of Hartford Konnecticut.
Between the still nose-diving real estate prices and the climbing taxes....

On the bright side - when the total collapse comes I'll be free of mortgage payments with a nice shelter-in-place food-producing property....

26 posted on 06/30/2014 1:52:04 PM PDT by Psalm 73 ("Gentlemen, you can't fight in here - this is the War Room".)
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To: SeekAndFind

Zillow is bogus. I would not trust their research.

I was, however, impressed when they said that my $150,000 house in rural PA is worth $1,500,000!

Do they even know what a decimal point is?


27 posted on 06/30/2014 1:59:53 PM PDT by miserare (2014--The Year We Fight Back!)
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To: miserare

RE: I was, however, impressed when they said that my $150,000 house in rural PA is worth $1,500,000!

SELL !! You might even get the price :)


28 posted on 06/30/2014 2:10:47 PM PDT by SeekAndFind
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To: lostboy61
Nothing happens in Dalton GA. its just is.

Fuzzy Side Up Capital of the World

29 posted on 06/30/2014 2:50:22 PM PDT by HangnJudge
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To: HangnJudge

Here in the burbs of Ft. Lauderdale, the house nextdoor has been abandoned since January.

The Ø-bots paid too much for it, can’t sell it now, and the grass is 2ft high.

This was a nice neighborhood before they moved in. But it is just one house, just happens to be next to me!!!


30 posted on 06/30/2014 5:48:50 PM PDT by bicyclerepair (The zombies here elected alcee hastings. TERM LIMITS ... TERM LIMITS)
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