8 Foreclosure Ghost Towns Seeing Signs of Life

Although the credit crisis took a toll on the entire US economy, some towns and cities have been hit significantly harder than others, plagued by foreclosures and dropping home values.

While most of these cites – centered in California, Nevada and Florida - remain in bad shape, there are signs that some of these foreclosure “ghost towns” are experiencing price stability, and even coming back to life.

Real estate website Zillow.comnoticed trends in their third quarter data, with many of the most hard-hit US foreclosure capitals experiencing price growth and a decelerating rate of new foreclosures, compared to the past two years. Although these markets may remain relatively flat, the upward trajectory they’ve seen over the past year suggest that better times may be ahead.

So, which foreclosure “ghost towns” are seeing signs of life? Click ahead to find out!

By Paul Toscano
Posted 17 Nov 2010

Home values from low: +6.1%

Although home values in have fallen 67% from their pre-crisis highs in December 2005, Merced is a foreclosure-ridden town that is seeing signs of life. More than 1 out of every 100 homes were foreclosed upon between August and September 2008 and by February 2009 foreclosure re-sales were at their peak and accounted for more than 86% of sales in the area.

By September 2010 just over half of the transactions were foreclosure re-sales while foreclosures hit only 2 out of every 500 homes in the city. Home values in Merced have been on the rise for 11 months running, growing by 6.1% year-over-year and 2.4% quarter-over-quarter, according to Zillow.

Home values from low: 9%

Riverside is one of California’s foreclosure “ghost towns” to have bounced back the most of depressed home values. After prices fell by 52% from their peak in June 2006 with foreclosure re-sales peaking in February 2009 at 69% of all home sales, prices have popped 9% off their crisis lows.

Home values in Riverside have risen or been flat for the past 10 months and are currently on par with their August 2009 levels. As recently of September 2010, foreclosures as a percentage of all sales dropped to 45%, while only 0.3% of homes were new foreclosures in Riverside that month.

Home values from low: +2.9%

In Stockton, foreclosure re-sales peaked in September 2008, accounting for more than 81% of all sales in the area, with 1% of homes falling into foreclosure between August and September of 2008 alone. Stockton’s home prices are down approximately 60.7% since their peak in March 2006.

Home values in the city have risen in 10 of the past 11 months and are now at the same level as July 2009. Year-over-year, prices have grown by 2.2% in Stockton, while values are up approximately 2.9% from lows during the crisis.

Home values from low: +2.8%

Another victim of the foreclosure crisis has been Modesto, California, where home prices have fallen approximately 60.1% from January 2006 highs and 2 out of every 250 homes were foreclosed upon as of August 2008. Foreclosure re-sales peaked in September 2008, when they accounted for 79% of all home sales.

Since its crisis lows, home values in Modesto have risen 2.8% and have been climbing for the past 10 months. This upward trajectory bodes well for home owners in Modesto, with foreclosures accounting for 53.1% of transactions the market is showing signs of stability.

Home values from low: +0.4%

Once the fastest growing city in America, Las Vegas has become known as one of the nation’s foreclosure epicenters. The peak of foreclosure re-sales in the city peaked in May 2009, accounting for 54% of all sales, with home values falling 57.8% from their peak in May 2006.

As of September 2010, foreclosures have fallen to less than half (47%) of all transactions, while the monthly amount of homes foreclosed upon has fallen by 33%. Although the small gain of 0.4% pales in comparison to the drop from home values highs, values have risen consistently over the past 10 months and suggest that prices may be stabilizing.

Home values from low: +2.9%

In May 2009, 54% of Vallejo’s home sales were foreclosure re-sales after a 54.4% drop in home values from the city’s peak in July 2006. In August 2008, about 3 out of every 500 homes were foreclosed upon, but by September 2010, this rate was reduced to 2 out of every 500 homes foreclosed during the month.

Vallejo has seen 10 months of price appreciation, with 2.1% growth year-over-year and a reduction to 47.7% total transactions arising from foreclosure re-sales.

Home values from low: +5.2%

Home prices in Salinas have fallen from their November 2005 highs by 52.9%, while foreclosure re-sales peaked in 2009 when they accounted for 76% of all sales in the city.

By September 2010, foreclosure re-sales represented 40% of all transactions, while the rate of new foreclosures decreased by nearly 60% from September 2008 to September 2010. Home values have risen for 13 of the past 17 months and are back up to the price levels of December 2008. Quater-over-quarter home values are up 3.3%, while month-over-month values are up 1%, according to Zillow.

Home values from low: +8.6%

Another foreclosure epicenter, in Madera 81% of home sales in May 2009 were foreclosure re-sales. Between August and September 2008, 3 out of every 500 homes were foreclosed, while the rate was cut in half by September 2010.

Home values have risen for 8 of the past 9 months, with year-over-year values up 3%. Madera’s home values are now 8.6% higher than they were at the lows during the foreclosure crisis.