6 Worst Housing Markets Coming in 2012
|A handful of particularly hard-hit housing markets, led by Las Vegas, might double a projected drop 3.9% nationwide.|
While Colpitts expects home prices to drop 3.9% nationwide on average this year, he foresees declines of more than twice that size in a handful of particularly hard-hit markets.
Colpitts says these markets are still suffering from the housing boom's "overbuilding, mortgage fraud, Wall Street and congressional corruption
"The cockeyed optimist in me believes things will
Here's a look at the five cities atop HousingPredictor.com's worst-markets study. All projections refer to estimated 2012 losses in the average price of each city's houses, condos and townhouses:
Fifth-worst market: Bethesda, Md.
Projected 2012 decline: 7.5%
Home to the famous Bethesda Naval Hospital and other U.S. government institutions, Bethesda is one of the wealthiest suburbs of Washington, D.C. It also hosts Lockheed Martin (LMT) and several other large corporations.
But Colpitts says Bethesda also had "one of the country's most overpriced housing markets
He says Bethesda's home sales have recently slowed "despite the oversupply of foreclosures at discount prices. Low mortgage interest rates don't seem to be enough to push enough buyers off the fence."
The expert expects average prices there to drop another 7.5%, to about 194,000, during 2012.
Fourth-worst market: Kauai, Hawaii
Projected 2012 decline: 7.6%
A lesser-developed Hawaiian island some 100 miles northwest of Honolulu, Kauai saw property prices soar during the housing boom -- but tank in the bust that followed.
"The vacation home market has been slammed by the real estate crash, and no place other than Florida has more second homes and condos than Hawaii," Colpitts says.
A popular playground for the rich, Kauai counts Drew Barrymore, Cameron Diaz, Matt Damon and other celebrities as either second-home owners or high-profile fans. Hollywood has also filmed parts of dozens of movies and TV shows there, from Jurassic Park to Gilligan's Island .
But while Kauai's condo market has seen some recent price increases, Colpitts say house sales "are running at a sluggish pace, with prices dropping at double-digit rates."
He expects the island's average prices to fall another 7.6%, to $236,000, in 2012 as reduced mortgage lending and tighter appraisal standards make sales tough.