WFCN —
Having a home of one’s own that one owns is a goal for the majority of Americans. But some places will be great investments for buyers in the next five years, while others will be disasters.
Although it is impossible to know for sure what the future holds, real estate brokers are a good bet for knowing which cities are ready to collapse and which ones are about to explode.
If you’re looking to buy a home in the next five years, these are the cities that some people think are the worst.
Check out the states with the worst real estate forecasts for the next five years, too.
State of Shreveport
An expert in real estate and CEO of Big Ben made the observation that “the oil and gas industry, for the last couple of years, has become too volatile,” explaining why the economic growth rate in Shreveport has been small.
Speaking on the city’s unemployment rate, Johnson stated that it remains higher than the national average. “High vacancy rates and nearly no major infrastructure developments have put a damper on property values and the local market.”
Johnson claims that this makes Shreveport an unsuitable location for real estate investments, particularly those requiring substantial returns.
In the Garden State
Property investors should be wary of cities with long-term diminishing populations, warned Daniel Rivera of Proactive Property Management.
“Atlantic City and similar places have witnessed significant population decline in the last ten years as a result of economic downturn, lack of jobs, and an oversupply of housing, which has led to falling property values,” Rivera noted.
Investors, according to Rivera, should be apprehensive of cities that exhibit comparable patterns.
California, Ontario
One California city that Matt Morgan, a licensed real estate salesman with IPA Commercial, recommends avoiding at all costs is Ontario.
Morgan noted that the city had a hard time attracting large firms who weren’t involved in warehousing, even though it was located within a significant logistics center. A diverse and resilient economy need young, educated workers, but the lack of infrastructure, residential amenities, and public transit made it difficult to attract them.
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“With the majority of jobs in one industry that is vulnerable to recessions, I anticipate that Ontario’s housing market will continue to be weak for the next five to ten years.”
Springfield, MA
With high crime rates and limited job growth, Springfield has become economically challenged, according to Johnson’s expert assessment.
Johnson stated, “The population has grown little and entire neighborhoods are dominated by older infrastructure and underfunded public services.” Considering that property values have not increased by more than the national average and that the property market is flat, he made his argument.
Investors looking for development, stability, and dynamism should avoid Springfield at all costs.
Ohio, Youngstown
Youngstown is experiencing significant economic hardship, as shown by the large population decline and high unemployment rates, according to Samuel Davis, CEO of London Gardeners.
A vacancy rate of 12.4% in 2022 was recorded by the U.S. Census Bureau, which indicates that the population of Youngstown has decreased by more than 20% from 2010. This makes it difficult to sell houses fast and locate trustworthy tenants in the city.
“Vacant and rundown properties have a negative impact on property value,” Davis stated. “When the country’s economy, real estate market, and investment opportunities really begin to heat up is an open question.”
In the Finger Lakes State
The majority of the industries that used to propel Rochester’s economy have either shrunk or moved entirely, according to Johnson, thus the city’s economy has been in a state of transition for quite some time.
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The population of Rochester has been steadily declining, and as a result, there are numerous vacant properties, as pointed out by Johnson.
Adding to the area’s depressing vibe, Johnson mentioned the high home taxes and utilities expenses. “Investors seeking growth and appreciation in their properties should not put their money into the local real estate market because it has drawn fewer new investors.”
The City of Gary on the Indiana
Davis mentioned that Gary is one of the cities that is facing economic challenges and a decrease in population.
The municipal government in Gary has been grappling with budget overruns and structural problems, and the city’s crime rate is among the highest in the nation. Davis pointed out that the pollution and abandoned properties are remnants of the city’s heyday of steel making.
Not only does Gary’s population fall by 22.3% between 2010 and 2020, but it also has a high poverty rate (44.7% in 2022, according to Census data).
The real estate market is already unfriendly, and Davis sees this combination as making things even worse.
The City of Flint
For the city’s real estate market, “the well-documented Flint water crisis was devastating,” Davis said of the natural resource disaster that began in 2014.
“The city is still reeling from this crisis due to nosediving property values,” Davis observed. “Many people have left the area because the economic recovery is so painfully slow.”
With a poverty rate that has remained at 35.4% for the past many years according to Census records, and infrastructural and public health issues that refuse to go away, buying property in Flint is riskier than in other cities.
San Francisco Bay Area
If you believe Johnson, Stockton has a history of high foreclosure rates and shaky economies. Despite its recent revival, this small California city still faces challenging years ahead.
“Many of its citizens find it hard to sustain due to the relatively high cost of living compared to earning an average income,” Johnson added. Property values in Stockton are highly sensitive to the city’s seemingly endless economic booms and collapses.
“Investors saw the city’s instability and long-term crime problem as indicators of a high-risk environment for real estate investment.”
Springfield, Illinois
This little Midwestern town, says Davis, has been experiencing high unemployment and economic stagnation for quite some time. On top of that, the FBI database shows that there will be 61.9 violent crimes per 10,000 residents in 2022, making Rockford an unattractive and problematic purchase.
Along with a falling population, Davis mentioned that Rockford has a lot of vacant or detached properties. Manufacturing had fallen, and a housing marker reflected this uncertainty, thus the local economy continued to recover slowly.
“Investing in Rockford real estate is still fraught with risk because of these difficult economic circumstances.”