FORT MYERS, FL—Florida has only one city listed in Housing Predictors’ Worst Housing Markets Forecast 2012, and the Southeast has a total of only four on the top 25 list. The Southeast cities the index predicts will suffer from the worst housing markets this year are Greenville, SC at seventh (with a 7.5% projected depreciation), Fort Myers at 15th (6.8%), Columbia, SC at 16 (6.8%) and Atlanta at 19th (6.7%).

Leading the dubious pack on a national basis is Las Vegas (which logged an 8.4% projected depreciation), followed by Wilmington, DE and Hilo, HI (both of which tied at 8.2%). Rounding out the top five are Jackson, MS (7.8%) and Kauai, HI (7.6%).

“The good news is that deflation is not as great as it has been in the past two years in the worst 25 markets, which at least a step in the right direction,” Mike Colpitts, editor of Housing Predictor, tells GlobeSt.com. “There are so many markets that are not going to see appreciation for the next 10 to 15 years. But at least things are going to slowly get better.”

According to Housing Predictor, record long high unemployment and underemployment has reshaped housing in the U. and will have a lasting impact on the country as more former homeowners turn to renting, and the percentage of homeowners is largely reduced for the long term. The worst 25 housing markets forecast annually by Housing Predictor are a selection of the worst of the worst markets with the highest probability to reach their projected average home value losses during the calendar year.

“We expect to see the bottom of the market some time in 2014 in the majority of 230 cities that we monitor,” Colpitts says. “We won’t see appreciation in most places for at least a few more years after that. This is an historic period of deflation triggered by Wall Street and the banks. When you play with financial fire the house is going to continue to burn down for a long time."

Housing Predictor reports an oversupply of homes discounted by banks, Freddie Mac, Fannie Mae, HUD and mortgage companies to sell-off the record volume of foreclosures is pressuring home values in the majority of the U.S. Thirty-six states markets are forecast to drop further as an increasing number of homeowners walk away from mortgages, pressuring home prices.

Fort Myers is among the worst. Colpitts has witnessed first hand the state of Fort Myers: neighborhood after neighborhood where few are still occupying homes. He likens some parts of Fort Myers to a ghost town.

“Those people left because they don’t have jobs,” Colpitts says. “Why would you want to buy a home as an investment when you are not going to be able to rent it for God knows how many years? So it’s not a good short-term investment. It might be in 10 or 15 years."

Click to Enlarge