This is a video from Bloomberg Television yesterday. It underscores the fragility of this incipient recovery. You will notice that California is leading the way in terms of foreclosures, one reason the state will 00 bankrupt or be bailed out. Here are some tidbits from the related Bloomberg News story:
- 342,000 homes were seized, foreclosed on, or auctioned in April
- 1 of every 374 homes received a foreclosure filing.
- Foreclosure filings were up 32% from last April.
- California was #1 in filings (it is the largest state, of course). Florida, Nevada and Arizona were next on the list.
- Florida and Nevada led the way in percentage increase in states with lots of foreclosures. Nevada’s April figure is up 111% and Florida’s 75% in one year. This compares to 42% for California and 40% for Arizona.
The increase in bankruptcies in Florida should be of particular concern for those tracking bank failures. The FDIC has just opened an office of 500 there to handle the wave of expected FDIC seizures.
Incongruously, this article quotes from Nicolas Retsinas. If I am not mistaken, he was a bubble denier when prices were going through the roof. His organization provided statistical research cover for those who thought real estate was going to the moon. Here’s what they say:
“What you’re seeing is the inevitable result of severe iob losses,” Nicolas Retsinas, director of housing studies at Harvard University in Cambridge, Massachusetts, said in an interview. “Until we stem the job losses, we can expect to see continuing foreclosures.”
Stating the obvious is not going to help regain credibility now. Just this past February, Dean Baker, who did call the housing bubble and crash, also noted that the media continued to go to Retsinas despite his track record during the bubble.
Nicolas Retsinas, Housing Bubble Denier, Is USA Today Expert On the Housing Market
When USA Today wanted to speak to a housing market expert on the rise in the housing vacancy rate, it turned to Nicolas Retsinas, the head of Harvard University’s Joint Center for Housing Studies. This was an interesting choice since Mr. Retsinas is perhaps best known as one of the people who denied the existence of a housing bubble in 2003 and encouraged low and moderate income families to buy homes.
Some of the assertions that can be found in this publications are:
“More importantly, it takes concentrated job losses – the likes of which have not been seen during this business cycle – to drive down home prices;” and
“Moreover, when house prices deflate, they do so slowly.”
–Dean Baker
I point this out because you might be inclined to believe what you see written in our newspapers. However, more scrutiny is often warranted.
Sources
U.S. Foreclosure Filings Hit Record for Second Month – Bloomberg