These are the Most Vulnerable Housing Markets in America Right Now

There are some savvy money moves to make if you earn $5,000 a month, including saving up to buy a home. However, the real estate market has been volatile in recent years, meaning there are a lot of unpredictable factors folks have to consider.

One of them is where you purchase your property, as some markets are poised to become hard-hit if there’s a recession. Here’s where and why.

Coming in at No. 15 is Orlando, the first of several Florida cities on this list. Migration in the area was on the higher side in 2021, plus a higher percentage of properties in Orlando are second homes, 8.7%.

There were also more house flips in Orlando in 2021 than average, which indicates vulnerability.

Knoxville takes the No. 14 spot in large part because migration to the area was high in 2021, with more than 4,500 new residents being added to the mix. Prices also grew steadily in 2021, though they cooled significantly more quickly than in Orlando in 2022.

Residents also have a high home-loan-to-value ratio in Knoxville, as do all of the cities on this list.

Stockton is not a place where a lot of people buy second homes, but its proximity to the pricey San Francisco Bay Area makes it a popular place for migration. That’s likely part of the reason property prices rose 19.3% throughout 2021.

Unfortunately, those prices cooled extremely fast in the first half of 2022, which isn’t good news for folks who bought in.

In the northeast corner of Florida is Jacksonville, which gained over 4,000 new residents in 2021. New residents along with a higher-than-average rate of flips and vacation homes in the region drove real estate prices up a fair deal in 2021.

Unlike Stockton, however, Jacksonville house prices didn’t drop quickly in early 2022, which is a good sign.

The gorgeous climate and location on the Pacific coast have made San Diego an extremely desirable place to live, historically driving up home prices. They increased by 17.5% in 2021, which is not an insignificant number.

However, property costs in the area dropped in 2022 almost as much as they did in Stockton, a concerning indicator for those who purchased in 2021.

This sunny desert city comes in at No. 10, where second homes and flips are much more common than in your average city. Housing prices jumped 21.5% throughout 2021, which is also higher than most other places.

Fortunately, these prices held on in early 2022, more so than any other city on this list.

This Florida city may be known for its famous football team, but its high rate of migration and insane pandemic housing prices are also notable.

In fact, the cost of buying a residence in Tampa increased more than anywhere else in the country since May 2020 — 28.1% — except for one other city, also in Florida.

Once dubbed one of the more affordable cities in the U.S., Phoenix saw one of the biggest population increases in the country in 2021. Housing prices also skyrocketed from an average of $300,000 to $485,000 from May 2020 to May 2022, and that’s a lot.

There are also many more flips in Phoenix than anywhere else on this list, which indicates vulnerability.

This Southern California city has the highest home-loan-to-value ratio on this list, a solid indicator of risk if a recession hits. And though you won’t find a ton of vacation homes or flippers working in the city, migration is high here, which is not surprising in SoCal.

Real estate prices stayed on par with Tampa in 2022 in Bakersfield, so there’s one good sign, at least.

Sacramento is close enough to the San Francisco Bay Area to have its housing market seriously impacted by the regional migration in the area. Real estate prices soared by a whopping 40% from May 2020 to May 2022 there, up to $610,000 per home on average.

They then fell faster than any other city on this list, which is bad news for folks who recently purchased property there, even after shopping for the best mortgage lender.

Housing costs in Las Vegas increased by 26.8% from May 2020 to May 2022, the third-highest increase of all cities in the U.S. Those prices then turned around and cooled dramatically in the first half of 2022.

Couple those numbers with the astounding migration levels in Sin City (on par with Phoenix) and you can see real reason for concern.

If you don’t live in the Sunshine State, you might never have heard of North Port before, but plenty of pandemic buyers swept in to raise home prices by 23.3% in 2021. Prices then chilled out in 2022 in this Gulf Coast city with higher-than-average migration.

What really sticks out about North Port is the fact that a fifth of all homes there are vacation homes, the second-highest number on this list.

Right around the corner to the south of North Port is Cape Coral. The stats for this city are very similar to its neighbor, although it does have the highest number of second homes on this list: 23.4%, a truly staggering amount.

The cost of residences also dropped faster and harder in early 2022 than it did in North Port.

Boise occupies the No. 2 position, as property prices increased there by 30.9% in 2021, by far the highest number on this list. Overwhelmingly, this was due to cash buyers from California pouring in to gobble up houses they could now work from.

That rush was short-lived though, and prices plummeted on par with Stockton during the first half of 2022.

The No. 1 most vulnerable housing market in America if a recession hits is Riverside, California, a Southern California city east of Los Angeles in the Inland Empire. 

The primary reason for this is staggering migration levels — the highest on this list by far — as people flocked to the area during the pandemic.

People relocating from Los Angeles and San Francisco were the primary drivers of home price increases, which could be poised to drop dramatically in the future.

There are a variety of housing markets at risk if there is a recession, many of them in Florida or impacted by folks leaving California for cheaper pastures. That movement caused prices to soar, then in some cases plummet.

While common first-time homebuyer questions include when to buy a home, conventional wisdom went out the window during the height of the COVID-19 pandemic. That shows that you sometimes can’t predict what can impact real estate.