Underwater America

The Hot Spots

The Hot Spots 

THIS REPORT DOCUMENTS where the most serious housing crises persist. It identifies those metropolitan areas, cities, and ZIP codes that face the most extreme levels of lost equity, where the most underwater homes are located, and where families are most acutely vulnerable to foreclosure. In brief, below are the hot spots that are under the greatest stress.

Table 4 showcases the 15 Hardest-Hit Major Metropolitan Areas

HARDEST-HIT METROPOLITAN AREAS

We first examined the 15 hardest-hit major metropolitan areas with populations over one million. The 15 metropolitan areas span across 16 states. In these 15 areas—Las Vegas, Atlanta, Jacksonville, Orlando, Chicago, Tampa, Detroit, Miami, Memphis, Virginia Beach, Riverside, Kansas City, St. Louis, Cleveland, Milwaukee—between 23 percent and 35 percent of homeowners have negative equity (see TABLE 4). In these troubled metropolitan areas, home prices remain up to 45 percent below their peak levels.

HARDEST-HIT CITIES

In the 100 hardest-hit cities (those with populations over 100,000), between 22 percent and 56 percent of homeowners have negative equity. 

A full 57 of these cites still have at least 30 percent of mortgaged homes UNDERWATER.

Almost one in ten Americans (28.7 million) lives in these 100 cities. There are more than 320,000 homes in these cities that went into default or foreclosure in 2013. Home prices in these cities remain up to 57 percent below their peak levels. In eight of these cities, home prices are still more than 50 percent below their peak levels. In another 23 cities, home prices are between 40 percent and 49 percent below their peak. In other words, in 31 out of the 100 hardest-hit cities, home prices are still at least 40 percent below their peak levels.

Table 5 showcases The Ten Hardest-Hit Cities

TABLE 5 lists the 10 hardest-hit cities in the U.S. with populations over 100,000. Appendix B has the full list of the top 100 hardest-hit cities. 

The 100 hardest-hit cities are located in 27 states, but some states have more troubled cities than others. Eighteen cities in California—Richmond, Sacramento, Stockton, Vallejo, Antioch, Victorville, Lancaster, San Bernardino, Palmdale, Visalia, Fresno, Moreno Valley, Modesto, Fairfield, Bakersfield, Rialto, Fontana, and Salinas—are among the nation’s 100 hardest-hit cities. Sixteen cities in Florida are among the 100 hardest-hit. These are Miami Gardens, Palm Bay, Jacksonville, Port Saint Lucie, Hialeah, Miramar, Orlando, Tampa, Brandon, Tallahassee, Gainesville, Saint Petersburg, Miami, Pompano Beach, Clearwater, and Fort Lauderdale. Ohio has six of the nation’s hardest-hit cities. Five cities in both Illinois and Arizona rank among the nation’s underwater hot spots.

This infographic includes a map of the The 15 hardest hit-major metropolitan areas. These are the 15 metropolitan areas with more than 1 million residents that have the highest share of underwater mortgages in the country

The overwhelming majority of these cities are lower-income communities, with median household incomes below the national median of $51,371. In fact, as FIGURE 1 illustrates, two-thirds of the 100 hardest-hit cities have median incomes below $50,000, and 34 percent have median incomes below $40,000. The hardest-hit city of all, Hartford, CT, is also one of the poorest, with a median household income of just $28,931. The so-called recovery has left behind lower-income communities

Figure 1 includes a pie chart of the Median Household Incomes of the 100 Hardest-Hit Cities

This infographic includes a map of the 100 hardest hit cities. These are the 100 cities with more than 100,000 residents that have the highest share of underwater mortgages in the country.

What also distinguishes the 100 hardest-hit cities is that almost all of them have African American and Latino populations that are significantly higher than their representation in the nation as a whole or in their metropolitan areas. As FIGURE 2 shows, in 14 of the 100 hardest-hit cities, African Americans and Latinos comprise more than 75 percent of population. In another 38 cities, these two groups comprise between 50 percent and 75 percent of the city populations. In another 19 cities, they make up between 40 percent and 50 percent of city populations. In other words, in 71 of the 100 hardest-hit cities, African Americans and Latinos account for at least 40 percent of the residents. This is not surprising because—as noted earlier—banks and mortgage brokers targeted African American and Latino neighborhoods, homebuyers, and mortgage consumers with predatory and subprime mortgages.

Figure 2 includes a pie chart of the Percentage of African Americans and Latinos in the 100 Hardest-Hit Cities

Even in those hard-hit cities with the highest median household incomes, African Americans and Latinos comprise a significant proportion of the city population. In Chesapeake, VA, with a median household income of $70,244, African Americans and Latinos account for 36 percent of residents. In Fairfield, CA ($66,363), these two groups comprise 44 percent of the population. In Henderson, NV, a suburb of Las Vegas with a median household income of $66,141, they constitute 21 percent of residents. In Antioch, CA ($65,494), 53 percent of residents are African American and Latino. In Fontana, CA ($64,195), 78 percent of residents fit that description. African Americans and Latinos account for 84 percent of the population of Miramar, Florida, whose median household income of $63,898 is substantially higher than the national figure.

HARDEST-HIT ZIP CODES

Within every city, however, some neighborhoods are worse than others and many have been particularly hard-hit by the housing crash and not lifted up by the broader recent trend of rising home prices. These communities were the most devastated victims of Wall Street’s predatory and subprime lending practices. They are now among the worst hot spots in terms of the proportion of families who are underwater and unlikely to survive without assistance.

To identify the hardest-hit neighborhoods, we examined the 500 ZIP codes with the highest percentage of homes with negative equity. There are 29,762 general ZIP codes in the entire country. ZIP codes vary in size from a handful of residents to more than 100,000 residents. The average population size is roughly 7,500. To remove ZIP codes that are in primarily commercial areas, we eliminated the ZIP codes with fewer than 5,000 residents. That left 395 residential ZIP codes with the highest percentage of homes with negative equity. These 395 ZIP codes are home to more than 10.4 million people.

In the 395 hardest-hit ZIP codes, between 43 percent and 76 percent of homeowners have negative equity. Home prices in these 395 ZIP codes remain up to 66 percent below their peak levels. Among these 395 ZIP codes, the median decline of home prices is 41 percent. There nearly 113,000 homes in just these 395 ZIP codes that went into default or foreclosure in 2013. Appendix C contains the full list of the 395 hardest-hit ZIP codes.

This infographic includes a map showcasing the 295 hardest-hit zip codes. These are the 395 ZIP codes with more than 5,000 residents that have the highest share of underwater mortgages in the country

The median household incomes of the 395 hardest-hit ZIP codes range from $9,895 (ZIP code 43604 in Toledo, OH) to $118,622 (ZIP code 20607 in Accokeek, Maryland near Washington, DC), but the vast majority of hardest-hit ZIP codes have median household incomes significantly below the national figure of $51,371. As FIGURE 3 shows, 32 (8 percent) of the 395 ZIP codes had median household incomes below $25,000. Another 137 (35 percent) ZIP codes had median household incomes between $25,000 and $40,000. Another 111 (28 percent) ZIP codes had median household incomes between $40,000 and $50,000.4 In total, 71 percent of the hardest–hit ZIP codes had median household incomes below $50,000.

Figure 3 includes a pie chart of the Median Household Income in the 395 Hardest-Hit ZIP Codes

Again, not surprisingly, what distinguishes the 395 hardest-hit ZIP codes is that almost all of them have African American and Latino populations significantly higher than their representation in the nation as a whole or in their metropolitan areas. They represent an even higher proportion of residents than that in the hardest-hit 100 cities.

 As FIGURE 4 shows, in 146 of the 395 hardest-hit ZIP codes, African Americans and Latinos comprise more than 75 percent of the population. In another 107 ZIP codes, these two groups comprise between 50 percent and 75 percent of the populations. In other words, in almost two-thirds (64 percent) of the 395 hardest-hit ZIP codes, African Americans and Latinos account for at least half of the residents. Once again we see the severe consequences of the banking industry’s predatory practices of targeting African American and Latino neighborhoods, homebuyers, and mortgage consumers.

Figure 4 includes a pie chart of the Percentage of African Americans and Latinos in the 395 Hardest-Hit ZIP Codes

This image is of a house with 2 signs on the door - one notice from the city and one that says no trespassing

The 395 hardest-hit ZIP codes are found in 23 states. They are not all located in central cities. Quite a few are found in suburbs and in small towns in rural areas. TABLE 6 shows the states with particularly high numbers of hardest-hit ZIP codes. 

Table 6 includes a chart of States with Large Numbers of Hardest-Hit ZIP Codes

These 395 hardest-hit ZIP codes, however, are just the tip of the iceberg. There are thousands of neighborhoods in hundreds of cities that have been devastated by the housing crash and have no prospects of significant improvement. It is in these neighborhoods that the epidemic of foreclosures and the tide of underwater mortgages have had the worst impact. These are just some of the nation’s hot spots that continue to suffer in the wake of the recession and ongoing housing problems in the U.S. These findings reveal that these crises are hardly over. Market forces and federal initiatives are clearly not solving the problems. Local actors are understandably trying to address what the federal government and other forces have been unable to resolve. The findings, unfortunately, demonstrate why such local actions are necessary.