Although 2012 will be remembered as the year the housing recovery finally took off, plenty of metro areas still have strong headwinds entering into the new year. And while it's true the housing market still has a long way to go to get back to "normal," the cities among the worst markets might surprise you, especially because many of them have also seen some of the biggest year-over-year home prices increases.
A lot of it has to do with the fundamentals that drive the housing market, says Trulia Chief Economist Jed Kolko—factors such as job growth, foreclosure rates, and for-sale inventories.
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"Places like Detroit, West Palm Beach, and even Miami saw steep price increases year-over-year, yet at the same time they've had slow job growth, high vacancies, and a big foreclosure inventory," Kolko says.
In a post for his blog, Kolko ranked the largest 100 metro areas based on their job growth, foreclosure rates, and vacancy rates. Here's a look at the cities that ended up near the bottom of his list, and still face big challenges in 2013:
10. Birmingham, Ala.
Job growth: 0.0%
Vacancy rate: 5.1%
Foreclosure inventory/1000 units: 22.2
Year-over-year price change: -3.8%
9. Colorado Springs, Colo.
Job growth: -1.7%
Vacancy rate: 3.4%
Foreclosure inventory/1000 units: 12.5
Year-over-year price change: 2.5%
8. Milwaukee, Wisc.
Job growth: -0.7%
Vacancy rate: 3.5%
Foreclosure inventory/1000 units: 16.9
Year-over-year price change: 0.1%
7. Indianapolis, Ind.
Job growth: 1.0%
Vacancy rate: 5.5%
Foreclosure inventory/1000 units: 16.1
Year-over-year price change: 4.4%
6. Cleveland, Ohio
Job growth: 1.2%
Vacancy rate: 6.2%
Foreclosure inventory/1000 units: 20.1
Year-over-year price change: 3.9%
5. Tucson, Ariz.
Job growth: 0.0%
Vacancy rate: 6.7%
Foreclosure inventory/1000 units: 16.1
Year-over-year price change: 7%
4. Las Vegas, Nev.
Job growth: 0.5%
Vacancy rate: 5.8%
Foreclosure inventory/1000 units: 23.5
Year-over-year price change: 13.7%
3. Chicago, Ill.
Job growth: 0.7%
Vacancy rate: 4.1%
Foreclosure inventory/1000 units: 35.7
Year-over-year price change: -3.1%
2. Miami, Fla.
Job growth: 0.1%
Vacancy rate: 4.0%
Foreclosure inventory/1000 units: 51.2
Year-over-year price change: 7.6%
1. Detroit, Mich.
Job growth: -0.5%
Vacancy rate: 6.7%
Foreclosure inventory/1000 units: 38.7
Year-over-year price change: 4.8%
Source: Trulia, RealtyTrac
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Meg Handley is a reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter at @mmhandley.
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