The U.S. housing market has recovered substantially since the housing crisis. The improvement, however, has been uneven, and in many U.S. cities housing markets continue to struggle. In some, property values and foreclosure rates have even worsened. In such cases, many homeowners find they have no choice but to abandon their property.
Property data company ATTOM Data Solutions compiled information provided by mail carriers in some 26,000 zip codes. 24/7 Wall St. combined zip code data to gather housing characteristics for more than 5,000 U.S. cities — including vacancy rates. Nationwide, an estimated 1.6% of all residential properties have been flagged as vacant by mail carriers, according to recent figures released by real estate data tracking firm RealtyTrac.
> Vacancy rate: 14.3%
> Vacant properties: 37,771
> 5 yr. population change: -24.1%
> Median home value: $45,100
There are approximately 38,000 vacant properties in Detroit, by far the most of any U.S. city. This is more than double the combined vacant properties in Baltimore and St. Louis, which have the second and third most abandoned residences, respectively. Detroit’s long-term economic struggles, with the decline in regional auto manufacturing representing just one of the city’s problems, has led to a long-term population loss. Since peaking in the 1950s, the greater Detroit area’s population has dropped by half.
The housing market collapse of a few years ago appears to have further exacerbated Detroit’s population drain and weakened housing market. Over the past five years, Detroit’s population fell from about 916,000 to under 700,000. In 2009, the typical home in Detroit cost $85,400 compared to a national median home value of $185,400. By 2014, the median Detroit home price fell by nearly half to just $45,100, compared to a national median value of $175,700.
Indian Rocks Beach, Florida leads the nation in vacancy with 26.1% of housing units flagged as abandoned. Blackwell, Oklahoma rounds out the 20 cities with the highest vacancy rates with 10.0% of homes abandoned.
A significant share of these housing markets are part of metropolitan areas in the Rust Belt — suburbs in and around cities like Detroit and St. Louis, as well as smaller cities like Gary, Indiana. These are places that lost hundreds of thousands of jobs – and consequently residents — as the U.S. manufacturing sector declined in the second half of the last century.
Daren Blomquist, senior vice president at ATTOM Data Solutions, spoke to 24/7 Wall St. “Places like Gary and Detroit are areas which over the last few decades have experienced a decrease in population, and an outflow of population means you end up with an oversupply of housing.” Blomquist added that in these Midwestern cities, a disproportionately large share of available properties are older — built in the 1950s and 60s. They are therefore less desirable to potential buyers and more likely to remain vacant as a result.
The subprime housing crisis took a toll on much of the American housing market. But while many U.S. cities have recovered by this point, a number of cities on this list have not. Poverty and home values in these cities remain similar to levels during the crisis — or worse. In a number of Detroit-area towns on this list, for example, home values are more than 40% below their values five years prior. Blomquist explained, “They’ve been left behind by the housing recovery that many other parts of the country have experienced.”
As further evidence of the link between poor economies and home vacancy, more than half of the 20 cities on this list have poverty rates at least double the national rate of 15.6% of the population.
To identify the 20 cities with the highest vacancy rates, 24/7 Wall St. reviewed the percentage of residential properties flagged as vacant by postal carriers in 26,864 zip codes provided by Attom Data Solutions as of the end of the third quarter of 2016. We aggregated zip code data to the city level by combining housing characteristics for zip codes located in U.S. cities. Cities with fewer than 2,500 residential properties were excluded from our analysis. It is unusual for postal carriers to flag vacation homes as vacant. However, we attempted to eliminate the towns where vacated homes were likely second homes and not truly abandoned. Foreclosure rates, the percentage of vacant properties with open loans, in foreclosure, and bank owned were also provided by Attom Data Solutions. Social and economic data, including population estimates, poverty rates, median household income, and median home values are five-year averages through 2014 from the U.S. Census Bureau’s American Community Survey (ACS). Population and home value changes were calculated using five-year averages through 2009. These are the latest and most accurate data for the cities reviewed.
|Rank||City||Vacancy rate||Vacant properties||5 yr. pop.
|8||River Rouge, MI||14.5%||491||-10.6%||$36,800|
|6||Highland Park, MI||15.2%||2,128||-25.1%||$39,100|
|1||Indian Rocks Beach, FL||26.1%||1,403||-19.4%||$385,100|