Just as failing industries marked the decline of the Midwest after WWII (hence the name 'Rust Belt'), the new declining cities will be denoted by their percentage of foreclosures, found particularly in California, the Southwest, and Florida.
Can neighborhoods affected by high rates of foreclosure and declining prices recover? That is the topic of a new report published by the Research Institute for Housing America that concludes that "a new kind of 'declining city' will emerge in the U.S. that will witness neighborhoods with high rates of vacancies and a sustained drop in population."
"Indeed, certain urban and suburban areas in California, Nevada and Arizona will become like the fading old post-industrial cities in the East like Cleveland, Buffalo and Detroit."
Of particular focus is Stockton, CA, a city that saw rapid growth after 1980 but has one of the highest foreclosure rates in the country, with housing values comparable to Detroit.
From A Study of Real Estate Markets in Declining Cities: "What is a declining city? Simply put, a declining city is one in which the people have left, but the houses, apartment buildings, offices and storefronts remain. (T)here are certainly neighborhoods and submarkets within metro areas that have passed a tipping point, and have little prospect of returning to anything close to their previous peaks."
Thanks to Loren Spiekerman
FULL STORY: Ghost Towns: Housing collapse will result in new types of 'declining cities'
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