We decided to look at home prices in the nine geographic regions defined by the U.S. Census: New England, Middle Atlantic, South Atlantic, East North Central, West North Central, East South Central, West South Central, Mountain and Pacific. We chose each region’s worst performer in 2009, based on the percentage change in the median home price.
Median home price is estimated, based on U.S. Census data and the percentage change reported by Federal Housing Finance Agency. Unemployment and foreclosure rates (supplied by RealtyTrac) are based on February 2010 data. Affordability index is the ratio of median home price to median household income in a market. Markets are ranked 1 through 10, with 1 being the most affordable.

By Patricia Mertz Eswein

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Cities Where Home Prices Have Fallen Most

Percent change in 2009: -20.6%
Metro population: 158,629
Median home price: $263,456
Median income: $63,500
Affordability index: 4.2
Unemployment rate: 15.8%
Foreclosure rate: 1/7
This city on the eastern (sunny) side of the Cascade Range attracts outdoor enthusiasts. During the real estate run-up, the city’s population grew and construction boomed as vacationers, retirees and investors sought properties here. Since then, home prices have fallen substantially, and unemployment is as high as in Flint, Mich.

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Bend, Ore.

Percent change in 2009: -19.3%
Metro population: 1,902,834
Median home price: $220,553
Median income: $65,400
Affordability index: 3.4
Unemployment rate: 13.9%
Foreclosure rate: 1/3
The Las Vegas economy is driven by gaming, entertainment and tourism. During the real estate boom years, the metro area attracted workers, retirees and speculators. But in 2009, according to U.S. Census estimates, fewer people moved to this city in the Mountain region than left.

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Las Vegas, Nev.

Percent change in 2009: -16.2%
Metro population: 583,403
Median home price: $130,120
Median income: $52,200
Affordability index: 2.5
Unemployment rate: 13.4%
Foreclosure rate: 1/7
The metro area still suffers from the fallout of the housing boom and bust (overbuilding, sprawl, subprime lending, real estate speculation and job loss). Citrus and cattle production is still big in this South-Atlantic-region city. Large employers include Mosaic Corp. (the world’s second-largest fertilizer manufacturer), Publix Super Markets, Wal-Mart, State Farm, Geico and Lakeland Regional Medical Center.

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Lakeland-Winter Haven, Fla.

Percent change in 2009: -12.1%
Metro population: 424,043
Median home price: $111,508
Median income: $58,500
Affordability index: 1.9
Unemployment rate: 15.8%
Foreclosure rate: 1/11
Flint’s fortunes declined with those of General Motors. And unemployment and foreclosures increased in this city in the East North Central region during the recession. Now, with a multimillion-dollar budget deficit and abandoned neighborhoods, some city leaders think that deliberately downsizing Flint may be smarter than trying to build it up again.

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Flint, Mich.

Percent change in 2009: -9.6%
metro population: 271,712
Median home price: $246,765
Median income: $68,400
Affordability index: 3.6
Unemployment rate: 14.1%
Foreclosure rate: 1/17
Atlantic City has been a vacation destination from its start. But the recession and competition from neighboring states has hurt this Mid-Atlantic city’s entertainment industry. The city’s housing market experienced the same speculative boom and bust as Las Vegas, albeit on a smaller scale.

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Atlantic City, N.J.

Percent change in 2009: -7.9%
Metro population: 3,269,814
Median home price: $228,071
Median income: $83,900
Affordability index: 2.7
Unemployment rate: 7.7%
Foreclosure rate: 1/18
Despite the Twin Cities' diverse economy (18 Fortune 500 companies are headquartered here), they experienced a boom in downtown condo development and exurban expansion, followed by a bust.

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Minneapolis-St. Paul, Minn.

Percent change in 2009: -6.3%
Metro population: 464,623
Median home price: $145,079
Median income: $56,000
Affordability index: 2.6
Unemployment rate: 7.0%
Foreclosure rate: 1/10
Although some overbuilding occurred during the boom, the bigger problem in this city in the West South Central region is diminished demand for homes. While job loss has abated, employers haven’t regained the confidence to start rehiring. Migration to the city has also slowed.

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Fayetteville-Springdale-Rogers, Ark./Mo.

Percent change in 2009: -6.0%
Metro population: 901,208
Median home price: $471,887
Median income: $101,900
Affordability index: 4.6
Unemployment rate: 9%
Foreclosure rate: 1/27
Prior to the financial meltdown and real estate bust, Bridgeport, formerly a manufacturing center, had begun a turnaround as home buyers in search of affordability began to rediscover it. Major employers in this New England city include Sikorsky Aircraft, Diageo North America (liquor manufacturer and distributor), Stew Leonard’s (groceries), General Electric Capital, Pitney Bowes and UBS Warburg.

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Bridgeport, Conn.

Percent change in 2009: -4.6%
Metro population: 366,401
Median home price: $120,051
Median income: $57,700
Affordability index: 2.1
Unemployment rate: 10.7%
Foreclosure rate: 1/29
Although the East South Central region avoided much of the craziness of the boom and bust, and local lenders were generally conservative, the housing downturn touched this area, too, followed by the recession. Job loss has been somewhat offset by the stabilizing influence of government and military employment at Maxwell-Gunter Air Force Base. And Hyundai, which has a manufacturing plant here, weathered the downturn better than other automakers.

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Montgomery, Ala.

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