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10 Worst Cities To Buy Property in the Next 5 Years, According to Real Estate Agents
- October 2023 average home value:$27,818.17
- Difference from the national average:$321,664.87
- Difference from the national median:$232,338.22
Buying property is an aim for most Americans — just to have a place to call home that they own. However, in the next five years, there are cities that will pay off for buyers and others that will sink them.
Check Out: Cheapest Places To Buy a Home in Every State
Learn More: Become a Real Estate Investor for Just $1K Using This Bezos-Backed Startup
While there is no definitive way to predict the future, the best people to ask about which cities are primed to blow up and which ones are set to implode are real estate agents. Here are what a few think are the worst cities to buy property in the next five years.
Also see the worst projected states to buy property in the next five years.
Shreveport, Louisiana
“The Shreveport economic growth rate has been modest, mainly because it is connected to the oil and gas industry, which, for the last couple of years, has become too volatile,” remarked Ben Johnson, a real estate agent and the CEO of Big Ben.
“The unemployment rate in the city is still higher than the national average,” Johnson said. “Property values have been flat, and the local market has had to grapple with high vacancy rates and almost a total absence of major infrastructure developments.”
According to Johnson, this makes Shreveport less than perfect for property investment, especially if significant returns are needed.
Find Out: 10 Housing Markets That Will Plummet in Value Before the End of 2024
Atlantic City, New Jersey
“Cities with long-term declining populations should raise red flags for property investors,” said Daniel Rivera, the owner of Proactive Property Management.
“Places like Atlantic City have seen drastic population loss over the past decade due to lack of job opportunities and economic decline, leading to excess housing supply and dropping property values,” Rivera explained.
Rivera suggested that investors should be wary of cities with similar dynamics.
Ontario, California
Matt Morgan, a licensed California real estate salesperson with IPA Commercial, said one city in the Golden State to particularly avoid is Ontario.
“Despite its location within a major logistics hub, the city struggled to attract major employers outside of warehousing,” Morgan said. “Limited infrastructure, residential amenities and public transit hampered its ability to draw young, educated workers needed for a diverse, resilient economy.
“With most jobs concentrated in a single sector exposed to downturns, I expect Ontario’s housing market to remain weak over the next 5-10 years.”
Springfield, Massachusetts
Springfield has become persistently troubled economically, with high rates of crime and slow growth in jobs, in Johnson’s professional opinion.
“The population has grown little and entire neighborhoods are dominated by older infrastructure and underfunded public services,” Johnson explained, pointing to the fact that property values have not gone up by as much as the national average, and the property market is flat.
“Together, Springfield entails significant risks for an investor seeking dynamism, growth and stability.”
Youngstown, Ohio
Samuel Davis, the CEO of London Gardeners, said, “Youngstown suffers from severe economic distress, evidenced by dramatic population loss and high unemployment rates.”
According to the U.S. Census Bureau, Youngstown’s population has declined by over 20% since 2010, with a vacancy rate of 12.4% in 2022 (Census data). This makes it a challenging city to find reliable tenants and sell properties quickly.
“There are a large number of vacant and dilapidated properties that have a bad effect on property value,” Davis said. “It remains to be seen when meaningful growth will also take hold in its economy or even in its real estate market and property investment.”
Rochester, New York
“The economy in Rochester has been transitioning for a long time due to the fact that most of the industries that used to drive the city [are] either downsized or wholly relocated,” Johnson said.
Johnson highlighted how the population of Rochester is on a continuous decline and, correspondingly, empty properties are many.
“High property taxes and utility bills are also discouraging factors in this area,” Johnson said. “The local real estate market has attracted less new investment; therefore, it cannot be considered an effective means for property investors looking for growth and appreciation.”
Gary, Indiana
Gary is another city struggling with economic issues and a declining population, Davis reported.
“Its heyday of steel making lives on in the pollution and abandoned property,” Davis said, pointing out how Gary’s crime rate ranks among the worst in the nation, while the local government has wrestled with budget overruns and structural problems.
Gary also struggles with high poverty rates — Census data reported 44.7% in 2022 — and a declining population: a 22.3% decline between 2010 and 2020.
In Davis’ eyes, this combination only further creates an unfavorable real estate climate with limited ways to win big.
Flint, Michigan
“The well-documented Flint water crisis was devastating for the city’s real estate market,” Davis said of the natural resource disaster that started in 2014.
“Nosediving property values have left the city still reeling from this crisis,” Davis commented. “The economic recovery has been painfully slow, with many residents leaving the area.”
Problems persistently posed by infrastructure and public health make Flint riskier for purchasing property, especially with the poverty rate hovering at 35.4% the last few years, according to Census records.
Stockton, California
Stockton, according to Johnson, has had its share of unstable economies and a high rate of foreclosure in the past. While this small California city has made a comeback of sorts, it still has tough times ahead.
“The cost of living is pretty high compared to earning an average income that makes it hard to sustain for many of its citizens,” Johnson said. “It seems that Stockton’s economy always booms and then busts, which affects property values greatly.
“To investors, the volatility of the city, as well as its prolonged inability to solve the problem of crime, pointed to a high-risk environment for property investment.”
Rockford, Illinois
According to Davis, this small Midwestern city has languished in economic stagnation accompanied by high unemployment rates. That, in addition to 61.9 violent crimes per 10,000 residents in 2022 (according to the FBI database), makes Rockford a hard sell and bad buy.
Davis added that Rockford “registers a declining population and numerous vacant/separated properties. The local economy remained in slow recovery as manufacturing had declined with a housing marker reflecting this instability.”
“Due to these challenging economic problems, the risks remain in investing in Rockford real estate.”
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This article originally appeared on GOBankingRates.com: 10 Worst Cities To Buy Property in the Next 5 Years, According to Real Estate Agents
- https://www.msn.com/en-my/money/homeandproperty/10-worst-cities-to-buy-property-in-the-next-5-years-according-to-real-estate-agents/ar-BB1plFZu?ocid=00000000
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