Many Americans still are holding off on buying homes in some of the country’s most expensive cities. While home prices fell 23% on average in the largest cities since the housing crisis began, for many home buyers the drop was not enough. Based on a new report released by Trulia, 24/7 Wall St. identified the metropolitan areas to which people least want to move.
Trulia ranked the 100 largest metropolitan areas by their Metro Movers ratio, which compares the number of online searches of local residents looking to buy elsewhere with the number of out-of-town homebuyers looking for real estate in the area. According to the report, a ratio of two means that there are twice as many home searches by people looking to leave the area as to move in. All of the cities no one wants to move to have a ratio higher than two.
The cities that attract few buyers experienced modest home price declines since the recession began, especially relative to their high home value. As a result, home prices in these areas are forecast to decline further, and homebuyers are waiting until they do. All of the cities no one wants to move to have among the most expensive homes in the country. Newark and Bethesda, two cities with twice as many people looking to leave as looking to move in, have among the top 10 highest median home values in the country. Home prices in these cities declined at just the national average, and next year, they are projected to decline moreHere are the five richest metropolitan areas people least want to move to:
5. Bethesda, Md.
MSA: Bethesda-Rockville-Frederick, Md.
Metro movers ratio: 2.25
Median home price: $700,000
Home value decline from peak: -28.9%
Unemployment: 5.4%
Forecast change in home price through 3Q 2012: -5.6%
The suburbs surrounding Washington, D.C., are some of the most affluent in the country. Bethesda is no exception. According to Zillow, median home prices in the region are nearly $700,000, making it one of the most expensive real estate markets in the U.S. During the recession, home values declined nearly 29%, which is quite a drop in value but not nearly as much as many other large cities. Home prices in the Bethesda region are projected to drop another 5.6% over the next year.
4. Philadelphia, Penn.
Metro movers ratio: 2.4
Median home price: $265,000
Home value decline from peak: -12.9%
Unemployment: 8.2%
Forecast change in home price through 3Q 2012: -1.7%
Median home prices in the Philadelphia region are the 27th highest in the country at $265,000. Additionally, home prices did not fall very much from their peak — at least relative to the rest of the country. This may be preventing the city from attracting enough new residents to keep its population numbers up
3. Washington, D.C.
MSA: Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.
Metro movers ratio: 2.54
Median home price: $390,000
Home value decline from peak: -27.7%
Unemployment: 6.0%
Forecast change in home price through 3Q 2012: -3.3%
The median home price in the Washington-Arlington-Alexandria metropolitan region is the 12th highest in the country. Median family income is also exceptionally high at $102,300 — the second highest in the country. While home values decreased 27.7% from their peak in the area, this is a relatively small amount compared with other large metros such as Phoenix and Riverside, where home prices dropped more than 56%.
2. San Jose, Calif.
MSA: San Jose-Sunnyvale-Santa Clara, Calif.
Metro movers ratio: 2.6
Median home price: $546,000
Home value decline from peak: -32.5%
Unemployment: 9.8%
Forecast change in home price through 3Q 2012: -3.8%
The median home price in the metropolitan region of San Jose-Sunnyvale-Santa Clara is $546,000, the third highest in the country. The median family income is the fourth highest in the country. Home prices may simply too high for many people. The median mortgage payment at the peak of home prices as a percentage of median monthly family income was 46%. This is one of the highest rates in the country, reflecting the exceptionally large burden home prices place on residents in the area.
1. Newark, N.J.
MSA: Newark-Union, N.J.-Penn.
Metro movers ratio: 3.65
Median home price: $400,000
Home value decline from peak: -24.7%
Unemployment: 8.9%
Forecast change in home price through 3Q 2012: -4.8%
Newark home values were among the first to peak, hitting their highest point in the first quarter of 2006. Since that time, prices have fallen modestly, which has kept home prices high. The median home price in the region of $400,000 is the 10th highest in the country. The bleeding out of residents may stop in the coming year as home prices are predicted to drop 4.8% through the third quarter of 2012.
