History is being made in the 15 markets that made our list of the weakest in the nation. (Last week, we listed the 15 healthiest markets, which you can see by clicking here.) While virtually every major metro market took a blow last year, the weakest markets were decimated by an unprecedented and lethal combination of job losses, falling home prices, and rising foreclosures.
The fundamentals are so poor in many of these markets that they are likely to be among the last to recover from the national housing downturn. As you’ll find as you click through the list, the weakest markets for 2009 are comprised primarily of bust markets in Florida and California, along with a few rust-belt cities with longer-term economic difficulties.
To compile this ranking, BUILDER magazine worked with Hanley Wood Market Intelligence to analyze the 75 largest housing markets in the country. The markets were ranked based on population trends and job growth, perennial drivers of housing demand. We also examined the rate of home price declines. And finally, we considered the rate of building permits, which may be the single best ongoing indicator of builder confidence in a market. We combined all these metrics to produce a score for each market.
Next week, we’ll present rankings for all 75 markets. In the meantime, here are the bottom 15.

61. San Francisco, Calif. 2008 total building permits: 11,979
Builders in the Bay Area can find no peace from a housing recession in its fourth year. Hanley Wood Market Intelligence, which tracks new-home sales in communities of 10 homes or more, reports that new-home sales were off 40 percent in December, compared to a year earlier. To their credit, builders have responded to sky-high prices in this notoriously unaffordable market by ratcheting down the median price of a new home; it fell 20.6 percent last year to $595,000. That’s pretty close to the median price of an existing home, which dropped 22.8 percent last year to $622,000. Permit levels here are less than half of what they were in 2005. The metro area, home to 7.36 million people, hasn’t had much population growth over the last five years, due to its high cost of living. Now, the local economy is contracting again. The region lost 4,200 jobs all told last year, but job levels in December were down 72,000 from a year earlier.
Busiest builders: KB Home, Pinn Brothers Fine Homes, Summerhill Homes, Standard Pacific Homes, Pulte Homes. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's San Francisco, Calif. Local Market page.

62. Lakeland, Fla. 2008 total building permits: 3,240
Retirees can spot a bargain when they see one. Back in 2003, when the median price of an existing home in Lakeland was a mere $97,000, they rushed into this metro area halfway between Orlando and Tampa. After a boom in the middle part of the decade, building permit activity has fallen 76 percent since 2005 and 24 percent in the last year. Existing-home prices, $140,000 in 2008, seem affordable, but remain well above 2003 levels. Forty percent of the jobs in Lakeland, which suffers from below-average per capita income, are in services, and they’ve been declining at a rapid rate. Employment in the metro area was running 2.7 percent below a year before in December, a loss of 5,700 jobs. Publix Supermarket is the largest local employer, followed by Wal-Mart.
Get local housing data and more on Builder's Lakeland, Fla. Local Market page.
63. Sacramento, Calif. 2008 total building permits: 5,488
Thanks to the ninth highest foreclosure rate in the country, existing-home prices are in free fall in Sacramento. Median existing-home prices last year dropped to $216,700, down 36.8 percent from a year before and 44 percent from a 2005 peak of $376,000. Competition from bank sales has made it extremely difficult for builders to compete, though the ones that remain are valiantly trying. John Laing Homes halted sales and construction a month ago. Builders have dropped median new-home prices in the last year, according to Hanley Wood Market Intelligence. But at $301,420 in December, they remain well above existing-home prices. It’s no wonder that permits are running at less than one-third of 2005 rates. The population here continues to grow, but the city is losing jobs, thanks to state government cutbacks, reversing a trend of the previous three years. The owner of one of the largest private home building companies, John Reynen, filed for personal bankruptcy last year.
Busiest builders: Pacific West Companies, Beazer Homes, Centex Homes, Taylor Morrison, JMC Homes. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Sacramento, Calif. Local Market page.

64. Cleveland, Ohio 2008 total building permits: 3,361
Cleveland may be one of the most affordable places to live, but that’s because a growing number of people don’t want to live there. The metro area has been shedding jobs and population since 2005. The lack of demand pushed down existing-home prices 16.5 percent in the last year to an incredibly affordable median of $108,500. (A recent NAHB-Wells Fargo affordability survey found that Cleveland was the 9th most affordable major housing market in the country.) Even so, permit activity in Cleveland is half of what it was in 2004. The foreclosure situation, which was really bad in 2007, improved slightly last year, according to statistics compiled by RealtyTrac, though the metro area still has the 28th highest foreclosure rate in the country. Jobs are the problem here—the area lost 23,000 last year, comparing job levels in December 2008 to the same period a year before—continuing a multi-year trend. Even the service sector, the area’s anchor, is recording job losses. Cleveland’s sixth largest employer, National City Corp., was sold to PNC Financial Services Group to avoid having to shut down.
Busiest builders: Pulte Homes, Hovnanian Enterprises, Unmistakably Premier Homes, Epcon Communities Franchising, Petros Homes. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Cleveland, Ohio Local Market page.

65. Miami, Fla. 2008 total building permits: 7,846
During the housing boom, the Miami skyline was littered with construction cranes, as developers sought to cash in on the condominium craze. Much of the new-construction energy is gone today in this cosmopolitan city of 2.46 million. Builders pulled only 7,846 permits last year, nearly a 50 percent decline from the year before, and a 70 percent fall from 2005. A surplus of homes and condominiums is driving down existing-home prices, which fell 27.2 percent in the last year to a median of $276,600. Economists at Moody’s economy.com believe it will be two years or more before prices bottom out in Miami. The metro area, which was adding jobs at a phenomenal rate during the boom, is now shedding them just as quickly. Construction employment fell 16.9 percent in the last year.
Busiest builders: The Related Group of Florida, Lennar, Centrum Properties, Shoma Development, D.R. Horton. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Miami, Fla. Local Market page.

66. Reno, Nev. 2008 total building permits: 1,929
The Biggest Little City in the World, it is now clear, got too far above its raising. Regarded during the housing boom as one of the hottest markets in the country, Reno now ranks among the 10 weakest, with existing-home prices retreating 20 percent within the last year to $253,000 and jobs disappearing at an alarming rate. The unemployment rate spiked to 9 percent in December. As you would suspect, 73 percent of the residential activity here is single-family. Permits may be down only 9 percent in the last year, but they are off 70 percent from the 2005 peak.
Busiest builders: Lennar, D.R. Horton, Centex Homes, Tanamera Homes, Lifestyle Homes.

67. Melbourne, Fla. 2008 total building permits: 1,599
A metro area of 542,000, Melbourne has been shedding jobs since 2006, longer than most metro areas. Last year it lost 5,700 jobs, comparing December 2008 to December 2007 figures, a 2.7 percent decline. Home to Patrick Air Force Base, Melbourne depends on major defense contractors for its jobs. Job losses contributed to a 21 percent drop in existing-home prices last year. Median home prices fell dramatically late in the year: They averaged $153,400 in 2008. Permits, which came in at 1,599 for 2008, have declined a precipitous 82 percent since 2005 and 45 percent in the last year alone.

68. Fresno, Calif. 2008 total building permits: 2,208
Fresno may be a great place to farm, but it’s a lousy place to build homes. New-home sales declined 41.5 percent last year as new-home prices fell 17 percent to $234,000. New-home prices remain well above existing-home prices which dropped 23 percent to $208,100 for the year. As a result, builders pulled only 2,208 permits here last year, down 72 percent from 2005 levels (7,366 permits). That’s very few permits for a market with a population approaching 1 million.
Busiest builders: Lennar, D.R. Horton, Wathen-Castano, McCaffrey Group, Centex Homes. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Fresno, Calif. Local Market page.

69. Ft. Lauderdale, Fla. 2008 total building permits: 2,172
The housing market in Ft. Lauderdale never really got that big. Back in 2005, builders pulled only 6,951 permits in this metro area, not that many for a population of 1.74 million people. Nevertheless, activity here declined by nearly 50 percent in the last year alone as the market dealt with a massive foreclosure problem. One in 17 housing units received a foreclosure notice last year, according to RealtyTrac, the sixth highest rate in the nation. Foreclosure sales helped push down existing-home prices nearly 23.4 percent in the last year to $278,000. Ft. Lauderdale, which enjoyed some of the biggest job growth in the nation back in 2005, lost 27,000 jobs at the end of last year, a 3.4 percent decline, comparing December 2008 to December 2007 levels.
Get local housing data and more on Builder's Ft. Lauderdale, Fla. Local Market page.

70. Naples, Fla. 2008 total building permits: 951
It’s not cheap to live in Naples, a retirement paradise with a median existing-home price of $463,500 last year. Moreover, prices here have fallen only 8.3 percent in the last year. That’s in part because the population has kept growing at a 2 percent annual clip, reaching 320,000 lucky souls. But job growth has turned sharply negative, contracting at a 4 percent annual rate last year, and builders willing to journey to the county permit office have gone into hiding. Permits have dropped roughly 75 percent from 2005 levels.
Busiest builders: Lennar, Elias Brothers, Centex Homes, Pulte Homes, Divosta Homes. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Naples, Fla. Local Market page.

71. Daytona Beach, Fla. 2008 total building permits: 1,316
Home building in Daytona Beach, home of the Daytona 500, has hit the wall. With a population of more than a half million people, the metro area produced a scant 1,316 residential building permits last year. Existing-home prices never really spiraled out of control in Daytona Beach as they did in other Florida cities. As such, they are off “only” 16 percent in the last year. The problem is that the city has been losing jobs, at about a 1 percent rate since 2006, after some strong employment growth from 2003 to 2005. Many of the job losses, not surprisingly, were in construction. The financial sector experienced a decline as well.
Get local housing data and more on Builder's Daytona Beach, Fla. Local Market page.

72. West Palm Beach, Fla. 2008 total building permits: 2,182
Despite its many luxury stores and hotels, not much is going on in West Palm Beach anymore, at least from a home building perspective. Permits here are off by 82 percent from their 2005 peak of 12,491. With 1.27 million residents, West Palm has more than twice the number of people that Daytona Beach does. Yet it produced roughly the same number of permits. The population here has stopped growing, due to a high cost of living and job losses. Existing home-prices plummeted 18 percent last year to a median of $302,800, but they were running well below that level late in the year. Moody’s economy.com, in a report issued two weeks ago, doesn’t think existing home prices will crater in West Palm Beach until the second quarter of 2010, when they will have fallen 60 percent from their peak.

73. Port St. Lucie, Fla. 2008 total building permits: 1,249
Port St. Lucie, located near the Atlantic Ocean, about 120 miles north of Miami and northeast of Orlando, earns our honors for the weakest market in one of the weakest states for home building, Florida. Back in 2005, builders pulled 10,782 permits in this area, which was considered one of the next big markets as development moved up the Florida coast. Last year, builders beat a fast retreat, pulling only 1,249 permits, a 49 percent drop from already low levels the year before. What makes builders so pessimistic about this recreational paradise? Existing-home prices are falling like an anchor; they dropped 32 percent last year to reach $153,600, below 2003 levels. That happened even as population increased another 3 percent last year. The former fishing town enjoyed some pretty heady job growth during the boom—employment increased at a 7 percent rate in 2005—but now it has slowed to a trickle.
Get local housing data and more on Builder's Port St. Lucie, Fla. Local Market page.

74. Stockton, Calif. 2008 total building permits: 838
Builders working in subdivisions of 10 homes or more sold a mere 15 new homes during the month of December in Stockton, a town of 680,000 people. That was 83 percent below levels one year earlier, according to figures compiled by Hanley Wood Market Intelligence. Stockton has been absolutely rocked by foreclosures; it has the highest rate per capita of any of the 100 largest metro areas in the country, according to RealtyTrac. One in 11 housing units received a foreclosure notice here last year. With all the competition from foreclosure sales, permits plunged 65 percent in the last year. Existing-home prices dropped an unheard of 43.2 percent last year to a $211,000 median, below 2003 levels. By comparison, the median price of a new home had fallen to only $299,900 by December, suggesting continued difficulty for builders. Unemployment in Stockton has reached an alarmingly high 10 percent.
Busiest builders: Del Webb, Lennar, Pulte Homes, Atherton Homes, FCB Builders. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Stockton, Calif. Local Market page.

75. Detroit, Mich. 2008 total building permits: 3,085
If you are searching for the bottom of the housing market, look no further—it’s right here in moribund Detroit, Mich. Very few builders were willing to bet on selling a home in the Detroit area last year. With a population of 4.4 million, making it the 11th largest metro area in the country, Detroit accounted for a mere 3,085 permits, down 42 percent from already depressed levels in 2007. Detroit isn’t even among the top 50 largest home building markets in the country anymore. Job growth here has turned sharply negative, dropping nearly 3 percent in the last year as 53,000 jobs disappeared. And the metro area has lately joined other rust belt cities in losing population, even though housing prices here remain very affordable--$123,500 for a median-priced existing home. They fell 12 percent last year. Detroit had the 10th highest foreclosure rate of any major city in the country last year. Centex last year announced that it had sold its Detroit operations to Lombardo Companies.
Busiest builders: Pulte Homes, MJC Companies, Crosswinds Communities, Lombardo Companies, Centex. Courtesy: Hanley Wood Market Intelligence.
Get local housing data and more on Builder's Detroit, Mich. Local Market page.
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Learn more about markets featured in this article: Miami, FL, Cleveland, OH, Deltona, FL, Detroit, MI, Miami, FL, Fresno, CA, Lakeland, FL, Naples, FL, Port St. Lucie, FL, Stockton, CA, Reno, NV, San Francisco, CA, Palm Bay, FL, Orlando, FL, Los Angeles, CA.