15 US cities where real estate won't be a great investment over the next few years

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  • Data from GoBankingRates looks at the US cities where home values are falling, including several months into the coronavirus pandemic. 
  • As Americans change where they live and work, several cities near San Francisco take top spots as they continue to lose value. 
  • And several cities in the southeast — namely in Mississippi, Georgia, and Louisiana — are facing home value drops that could continue into 2021 and beyond. 
  • Expensive northeastern cities outside of New York City, like Edison, New Jersey and Stamford, Connecticut, are also losing value.
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Everyone wants to believe that their home is an investment — for most Americans, home equity makes up a large percentage of net worth.

But just because real estate is expensive doesn't mean it will appreciate in value. Real estate values can be influenced by demand, the economy at large, and the specific area where you live. Oftentimes, where you live has a large influence on your home's value. And as Americans' lives changed drastically at the start of the coronavirus pandemic, where people live has started to change, too. 

Data from GoBankingRates looks at the cities where buying a home isn't such a great investment anymore, where homes are losing value and are expected to keep falling over the next two years. In addition to home value forecasts over the next two years, the data also considers how many mortgages are underwater (where home values are lower than a loan) and a high number of people are late on their mortgages. 

These cities are expected to see change in the 2020s as well. The typical home in the US is expected to appreciate about 7% in the next year, according to estimates by Zillow. But homes in these cities are largely expected to appreciate at a lower rate.

Here are the cities where real estate hasn't been such a good investment and may not be soon, along with the typical home's price and forecast from Zillow, and data on foreclosures and price changes over the past two years from GoBankingRates. 

15. Irvine, California

Irvine's typical home values are approaching $1 million, but a fair number of residents are facing foreclosure.

Typical home value: $910,038

One-year value forecast: 6.6%

Price change over the past two years: -0.26%

Foreclosure ratio: One in 6,172 homes

14. Baltimore, Maryland

Unlike Irvine, Baltimore homes are relatively affordable, and the typical home is less than $200,000, according to Zillow data. But nearly one in every 3,000 homes is facing foreclosure.

Typical home value: $156,106

One-year value forecast: 6.6%

Price change over the past two years: 3.51%

Foreclosure ratio: One in 2,816 homes

13. New Orleans, Louisiana

New Orleans homes are losing value, and foreclosures are relatively high.

Typical home value: $240,091

One-year value forecast: 6.2%

Price change over the past two years: –0.22%

Foreclosure ratio: One in 3,379 homes

12. Peoria, Illinois

Peoria, Illinois has affordable homes, but the values have been falling over the past two years.

Typical home value: $89,001

One-year value forecast: 7%

Price change over the past two years: –0.19%

Foreclosure ratio: One in 4,159 homes

11. Edison, New Jersey

Edison, New Jersey residents are seeing their home values drop significantly.

Typical home value: $402,393

One-year value forecast: 7.2%

Price change over the past two years: –0.62%

Foreclosure ratio: One in 8,168 homes

10. Albany, Georgia

This small town in Southern Georgia has home values increasing, but many families are facing foreclosure. And homes here are expected to appreciate much slower than the typical US home.

Typical home value: $86,092

One-year value forecast: 4.8%

Price change over the past two years: 1.74%

Foreclosure ratio: One in 4,323 homes

9. Stamford, Connecticut

This waterfront community just across from Long Island has expensive homes, but over the past two years, values have fallen by over 1%. 

Typical home value: $486,816

One-year value forecast: 7%

Price change over the past two years: -1.18%

Foreclosure ratio: One in 5,286 homes

8. Lake Charles, Louisiana

Lake Charles, Louisiana was badly devastated by Hurricane Laura in 2020, and home values have been falling over the past several years. 

Typical home value: $214,145

One-year value forecast: 6.6%

Price change over the past two years: -1.74%

Foreclosure ratio: One in 4,148 homes

7. Santa Rosa, California

North of San Francisco, Santa Rosa, California has dealt with wildfires over the past several years, and home values have fallen by almost 5%. 

Typical home value: $590,826

One-year value forecast: 6.2%

Price change over the past two years: -4.82%

Foreclosure ratio: One in 3,893 homes

6. Laredo, Texas

The border town of Laredo, Texas has seen home values fall by almost 2% in recent years.

Typical home value: $168,783

One-year value forecast: 4.6%

Price change over the past two years: -1.79%

Foreclosure ratio: One in 5,296 homes

5. Fremont, California

The typical home in Fremont, California is worth over $1 million, but home values have fallen almost 5% over the past two years.

Typical home value: $1,101,997

One-year value forecast: 7%

Price change over the past two years: -4.79%

Foreclosure ratio: One in 10,811 homes

4.San Mateo, California

The foreclosure rate in San Mateo is low, but prices are dropping rapidly. 

Typical home value: $1,429,595

One-year value forecast: 7%

Price change over the past two years: -6.09%

Foreclosure ratio: One in 10,118 homes

3. Redwood City, California

Across the bay from Fremont and south of San Francisco, Redwood City's home values are dropping quickly. 

Typical home value: $1,101,997

One-year value forecast: 7.2%

Price change over the past two years: -5.20%

Foreclosure ratio: One in 6,529 homes

2.Longview, Texas

Longview, Texas is a small town in eastern Texas. Homes there are appreciating much slower than the typical American home, and values have plunged about 3% over the past two years. 

Typical home value: $149,952

One-year value forecast: 5.2%

Price change over the past two years: -2.91%

Foreclosure ratio: One in 5,158 homes

1. Jackson, Mississippi

Jackson, Mississippi homes have been rapidly losing value over the past two years, and may not recover quickly.

Typical home value: $45,789

One-year value forecast: 6.1%

Price change over the past two years: -9.95%

Foreclosure ratio: One in 5,004 homes

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