It’s been widely reported that shady lending practices, greedy borrowers and a general lack of wisdom (if not sneaky partisan policies) coming from our elected officials is what brought the housing crisis upon us.
A more apt metaphor may be “down around our ears.”
Since that time, what has been done to improve the system? Have we finally passed the point of increased foreclosures or is the worst yet to come? Many say that recent legislation is a positive step in that direction.
Entrepreneur and Editor of InsiderLouisville.com, Terry Boyd, likes to poke fun at my reliance upon data. I reply, “Numbers don’t lie. Some people just like to hide the damning data.”
Why don’t we just present the numbers at let you decide? We’re complimenting your intellect that way, right?
Back in May, MSNBC wrote a piece titled, Foreclosure flood may not have crested yet. While I borrowed their catchy title theme, they discredit their own premise with this excerpt.
The good news on distressed sales is that they may have peaked, according to the National Association of Realtors. Home prices continued to fall in April, and the median home price was 5 percent lower than a year ago. But the share of distressed sales shrank a bit -from 40 percent in March to 37 percent in April. (Emphasis mine)
Of course, foreclosures won’t stop immediately, but isn’t it of primary importance that there were less in April than the month before? I would think so.
Every distressed property (a home that’s underwater financially) is a drain on every other non-distressed property. If you are current on your mortgage payments, that short sale down the street is still adversely affecting your home’s value.
Wouldn’t it be great that this time next year there were only one or two in your neighborhood instead of the 10 or 12 that are there now? I think you get the picture.
Here in Louisville, the number of distressed properties is much lower than in other parts of the country. Even still, CoreLogic asserts that in Louisville home prices dropped about 1 percent from July 2010 to July 2011, not including distressed sales. Including them, the number rises to 1.9 percent. Not good, but could be much worse.
Where do we go from here?
That’s anyone’s guess but jobs are a major concern.
Inman published yesterday that Unemployment rate drops in nearly 7 of 10 U.S. metros. That’s solid. Not so great is that Louisville unemployment didn’t decline but held at 9.5 percent for the 3rd straight month.
Until the economic outlook (including jobs) becomes sunnier, I think we’ll have to endure these turbulent waters a bit longer.