For three years, the real estate market has been going in one direction - primarily down. Some areas, however, have begun to recover. Recent S&P/Case-Shiller data show that among the top 20 housing markets in the U.S., 18 had very modest improvements in sales prices during May. Others, like Washington and Boston, have began to at least stabilize from a year ago.

Few markets, however, can match Washington and Boston. Robert Shiller has been stating that home prices could fall another 10% in the next year. Inventories in some major metropolitan areas would take years of sales to get back to 2005 levels. Then, the normal inventory of homes for sale was replaced on average every six months and it was unusual for a house to be on the market for a year.

Foreclosure rates remain high and only the robo-signing scandal has slowed the process. Once this is resolved, economists fear the market will be flooded with even more vacant, unsold homes. 24/7 Wall St. has taken a new look at the housing market to find the very weakest cities by identifying those with the highest homeowner vacancy rates and rental vacancy rates. These are markets where demand has clearly collapsed. These are cities where the requirement for living space has dropped well below the national average. Further, vacancy rates of many cities were stable during the recession, but accelerated sharply higher in the last year. Similarly, housing prices in several of these markets have decreased at a faster rate in the last three quarters than during the recession. These cities, like Detroit, St. Louis, Dayton, and Atlanta, also tend to be larger and older among the top 75 metropolitan areas. Their economies were damaged long before the recession.

Methodology: 24/7 Wall St. pulled Census data on the 75 largest U.S. metropolitan areas and ranked the cities with the highest overall vacancy rates for both homeowner vacancy and rental vacancy for the second quarter of 2011. We picked the cities with the worst rates in each of the two categories to create meta-data ranks. We then removed the cities that had either improved homeowner vacancy rate in either the last twelve months or the last quarter. We believed that any sign of improvement in homeowner vacancies, the more telling of the vacancy rates, should disqualify a city. To improve our analysis, we also looked at unemployment rates for these cities provided by the Bureau of Labor Statistics. We also used historical median home prices, as provided by the National Association of Realtors.

The analysis shows that some cities have home vacancy rates over 5% and rental vacancy rates over 10%. Obviously, these levels of unused inventory have the effect of driving down both home and rental prices month after month. It also means that there is comparatively little demand for the purchase of new or existing homes. These ten markets are essentially dead as far as real estate prices and sales activity are concerned.

These are America's ten sickest housing markets.

10. Oklahoma City, OK
> Homeowner vacancy rates: 5.2% (6th)
> Rental vacancy rates: 9.6% (34th)
> Total housing units: 539,077
> Unemployment: 4.9%

Oklahoma City had the sixth highest homeowner vacancy rate in the country as of the second quarter of this year. The city's unemployment rate is just 5.3%, but this low rate has not helped improve high home and rental vacancy. From last year, home sales in Oklahoma state dropped by 7.7%, according to the state's newspaper NewsOK. In the city, sales were flat from last year. Between the first quarter of 2010 and the first quarter of 2011, the median home price in the city dropped by more than 8%.

9. St. Louis, MO
> Homeowner vacancy rates: 3.3% (19th)
> Rental vacancy rates: 11.4% (18th)
> Total housing units: 1,236,222
> Unemployment: 8.6%

In 2008 and 2009, the St. Louis area has shed more than 82,000 jobs. This loss had a negative impact on the city's real estate market. Vacancy rates have continued to rise, increasing from under 2% one year ago to 3.3% in the recent quarter. The rise in vacancy rates has occurred while the median sales price for single family homes has fallen more than 19% since 2008. While the rental vacancy rate, which is currently at 11.4%, has decreased slightly since the last quarter, it is still 1.6 percentage points higher than it was last year. St. Louis office vacancy rate is at 12.6%, according to real estate information company CoStar Group.

8. Kansas City, MO (Tied for 8th)
> Homeowner vacancy rates: 3.7% (13th)
> Rental vacancy rates: 11% (22nd)
> Total housing units: 883,099
> Unemployment: 8.4%

Kansas City's rental vacancy rate of 11% is the 22nd highest of any major city in the country, while its homeowner vacancy rate of 3.7% is the 13th highest. The city has a relatively high rate of unemployment, at 8.4%. While it's below the national average of 9.2%, it is well above the state average of 6.6%. The median home price in the city is down by $19,000, or more than 13%, since 2008. Most of that decline came in the last year. Between the second quarter of 2010 and the first quarter of this year, prices dropped by more than $25,000.

Detroit, MI (Tied for 8th)
> Homeowner vacancy rates: 2.4% (32nd)
> Rental vacancy rates: 17.2% (3rd)
> Total housing units: 1,886,537
> Unemployment: 11.6%

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The recession hasn't been kind to Detroit. Part of the Detroit-Warren-Livonia metropolitan area, it has been among the hardest hit cities in the country. Since 2005, the metropolitan area has lost approximately 323,400 jobs. Unemployment in the Motor City almost reached 30% in 2009. According to one estimate, the city had 90,000 abandoned or vacant lots or residential homes in 2010. One of the reasons the city is not at the top of this list is that the city had so many vacant properties that a huge portion of them were demolished. Regardless, at 17.2%, the rate of rental vacancy is still the third highest rate in the nation.

6. Dayton, OH

> Homeowner vacancy rates: 4.7% (7th)
> Rental vacancy rates: 10.7% (23rd)
> Total housing units: 385,160
> Unemployment: 9.3%

Dayton's home vacancy rate of 4.7% is the seventh-highest in the country among major cities. At one time, Dayton was a much larger city and an economic powerhouse. The Ohio city, which was a major manufacturing center, was at one point awarded more patents each year than any other place in the U.S. The city has a particularly bad unemployment rate of 9.3%. Median housing price, which stood at $109,000 in 2008, has fallen by 29%, or $27,000, between 2008 and the first quarter of this year.

5. Baton Rouge, LA
> Homeowner vacancy rates: 3.9% (11th)
> Rental vacancy rates: 13% (12th)
> Total housing units: 329,729
> Unemployment: 8.4%

Baton Rouge did not emerge from the recession unscathed, but it did perform better than many other cities in the U.S., in part because it is the state's capital city and in part because of the money brought in through Hurricane Katrina recovery work. However, according to one local news station, the area has built more housing structures than it could fill following Katrina. The city has not been able to break free of this situation, as both homeowner vacancy rates and rental vacancy rates have increased not only since last year, but since the last quarter as well.

4. Atlanta, GA
> Homeowner vacancy rates: 5.4% (4th)
> Rental vacancy rates: 11.8% (17th)
> Total housing units: 2,165,495
> Unemployment: 9.7%

Atlanta's homeowner vacancy rate of 5.4% is the fourth highest among major U.S. cities. The city, which had a significant influx of new residents, particularly from the northeast, has been hit hard. Atlanta's unemployment rate of 9.7% is well above the national average of 9.2%. According to the Atlanta Journal-Constitution, the city has lost nearly 25,000 jobs between June of 2010 and June of this year. Between 2008 and the first quarter of this year, homes have lost more than a third of their value, dropping in price by nearly $50,000.

3. Memphis, TN

> Homeowner vacancy rates: 4% (9th)
> Rental vacancy rates: 13.5% (11th)
> Total housing units: 550,896
> Unemployment: 10.1%

Memphis's slow economic recovery has kept vacancy rates high. The metropolitan area's homeowner vacancy rate has increased from 2.5% in 2010 to 4% in the second quarter of 2011. In the city's defense, its rental vacancy rate has decreased from a staggering 21.2% in 2010 to 13.5%. This is still among the highest in the country, but it is an improvement. The unemployment rate remains at 10.1%, which is significantly higher than the national average of 9.2%.

2. Indianapolis, IN
> Homeowner vacancy rates: 5.2% (5th)
> Rental vacancy rates: 13.5% (10th)
> Total housing units: 757,441
> Unemployment: 7.8%

The average home price has dropped by $20,000, or 15.3%, between the second quarter of 2010 and the first quarter of this year. Indianapolis's home vacancy rate of 5.2% is the fifth-highest in the country. Its rental vacancy of 13.5% of units is the tenth highest in the country. In 2009, while vacancy had not even reached its worst point, the mayor's office of Indianapolis recognized the serious problem the city faced. The city's plan to help solve the abandoned home issue states: "Indianapolis, like many communities, faces a significant challenge in dealing with vacant and abandoned properties. This challenge is exacerbated both by weaknesses in the local and regional housing markets – including an oversupply of housing relative to demand – and by the high and growing rate of foreclosures."

1. Tucson, AZ
> Homeowner vacancy rates: 6.8% (1st)
> Rental vacancy rates: 15.9% (6th)
> Total housing units: 440,909
> Unemployment: 7.8%

Tucson's homeowner vacancy rate was 3.2% one year ago. It is now over double that. The city had a booming residential housing market before the crash. Since then, demand is so low that median home prices have dropped 18% in the past year and 33% since 2008. In addition, the city has among the highest rate of foreclosures in the country.

Charles B. Stockdale, Douglas A. McIntyre and Michael B. Sauter

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keithmoore127

Interest rates are simply incredible on mortgages right now. It's not uncommon to see 30 year rates down in low fours and 15 year rates in the threes. Week after week, the rates keep dropping If you are looking for rates in three then search online for "123 Refinance" and learn how to do refi.

August 07 2011 at 5:08 AM Report abuse rate up rate down Reply
fmirabelli

Housing prices will continue to fall as the foreclosures work their way through the MERS and ROBO signing mess. Obama still allows ACORN to market properties, benefits and "free" government entitlements.

Now Obama wants to focus upon "pivot jobs"....this is his new term for increasing jobs.

Significant change is required to solve thses problems one at a time:

jobs
housing
defund or eliminate Obamacare
review trade agreements
illegal people living and drawing benefits
immigration
border control
increase social security taxes to match the salary (no end amount of $106,000). This will increase solvency to nearly 100%.

Obama has achieved nothing. I am not favoring republicans, but we have to elect someone who can change our country and assist with problem solving.

August 06 2011 at 12:53 PM Report abuse rate up rate down Reply
cmcclarty

Tucson to the border wants to pull away from the rest of Az and call it new baja great keep your border jumpers and your crime filled dump!

August 06 2011 at 6:19 AM Report abuse +1 rate up rate down Reply
lisabevis77

I just wanted to THANK YOU so much for find 3.17% Rate. You were great! The closing went really smoothly on my Mortgage Refinance. As in the past, I'll continue to tell everyone about "123 Refinance" knowledge is power know your rate before you do refi

August 06 2011 at 6:08 AM Report abuse -1 rate up rate down Reply
vilasegundo

there are always people looking to put the responsability of our problems in someone else.
Greenspam said in from of congress "I made a mistake, I though they (the real state agents, the bankers, the investment houses, etc...) were going to take care of their clients". And that was the problem, greed took over, they were thingking in their own pocket, and there was no regulating to keep them from abusing the system.
We created that perfect storm, all for money, we sold out america in the name of greed. That is this country new name; united state of greed. No wonder the bible describe it as a sin, and then you see a lot of cristians that embrace it like a virtue.

August 05 2011 at 10:25 PM Report abuse rate up rate down Reply
kanus

The government didnt let manufacturing go to China. The American consumer did. The minute we as consumers discovered the joy of buying bulk and buying cheap, American manufacturing didnt stand a chance. If give the choice to buy a widget for 10 buck made here or one for 5 buck made in China, the average American will buy the Chinese widget. They will go home and comfort themselves with the notion, "I have to buy the least expensive thing to give my kids everything" I have a low wage so I cant afford the American widget. I have a low wage because the factory that I used to work for closed. It closed because it went to China. Hummmm.......

The average American didnt have a gun to their head when they signed the loan that they couldnt afford. They did so willingly. They needed a newer bigger home to fill with all the Chinese stuff they keep buying. The Federal Reserve printed money that was financed by the Chinese buying our debt with the money they made selling us all the stuff that we need a newer bigger home to put all the Chinese stuff we bought.

Stop blaming everyone American. Look in the Mirror. Moderation and taking responsiblity for ones actions are what built this country and it is being squandered to buy stuff we dont need with money we dont have. The greatest generation is the greatest generation because they took responsiblity for their actions. They rolled up their sleeves and got to work in the name of progress, community and faith.

All we have to do is work harder, stop dreaming of being the next American Idol and above all, live within your means. Out of the many, one.

August 05 2011 at 10:19 PM Report abuse rate up rate down Reply
Acaciapurpuria

The problem is home prices were artificially high. When the Federal Reserve gave the banks all of that fake money it printed up and told the banks to hand it all out, the banks gave people home loans without checking to see if the people had a job. When lots of people buy homes, the prices keep going up. The Federal Reserve created the housing boom and bust. The low prices are the "real" values, the real prices. Middle class wages have been stagnant for about 25 years now. Only two percent of the population even makes over 200K, and one percent hold 50 percent of the country's wealth. If wages have stayed the same for 25 years, how can homes go from being worth 60K 25 years ago to 300K? They can't. They did for a minute due to the Fed pumping all of that money into the banks to loan out. The Federal Reserve does not have one clue what they are doing. The high food prices is inflation created by the Fed pumping money into the system. End the Fed. Ron Paul 2012. Both parties leave the southern border open and try to pass amnesties. Both Bush and Obama ran up 5 trillion dollars of debt each. All of the politicians just let the U.S. lose its AAA credit rating, so now home loans and car loans will have even higher interest rates. Both parties only work for the mega banks, the corporations and the rich. We have to get rid of all of them. The fake "news" TV channels are conning people into thinking this is a war of just blame one party or the other. Both parties have us at default of our debt, they both let the jobs go to China, that's why there are no jobs. Over 40,000 American businesses moved to China when Bush was in office. Obama is not making anything better. He is now officially a one term president after the country losing it's AAA credit rating today. It is over for Obama. We have got to get rid of all of those corrupt bums and do it now. I fear it is too late. Ron Paul is the only answer. Forget the media hype, forget one party is worse than the other. Look at the debt, look at this country. They ALL did it, the whole lot of of them, Rs and Ds. We have a totally corrupt government.

August 05 2011 at 9:52 PM Report abuse rate up rate down Reply
buggeroffyou666

All red neck city and states. Not a surprise.

August 05 2011 at 9:42 PM Report abuse rate up rate down Reply
Ken Siemers Sr.

The media is such a joke. On the home page of AOL the headline for this article spells it Tuscon. So just where is Tuscon? Everything is sensationalized from the media and they don't even have enough class to spell check or edit spelling. Really speaks tons on the ignorance reporting the "SO CALLED" news.

August 05 2011 at 9:05 PM Report abuse rate up rate down Reply
antiquelenz

Regarding what Vaughn D. Gale said about Bush being in office when the housing crisis started, yes he was in office but the Democrats were in control of the entire Congress. Bush tried to stop Fannie Mae and Freddie Mac from allowing loans to go to people who they knew would not be able to pay the monthly payment or sustain the loan, but he was told by Barney Frank, Nancy Peolosi, Chris Dodd and several other Democrats that THERE WAS NO PROBLEM AND THAT FANNIE AND FREDDIE WERE DOING JUST FINE

August 05 2011 at 9:03 PM Report abuse -2 rate up rate down Reply