Unemployment Batters Housing Market

Foreclosure activity continued to hit Florida, California, Nevada, and other parts of the Sun Belt region in the first six months of this year. However, RealtyTrac noted in its latest report that rising unemployment is escalating the trend elsewhere in the nation as well.

RealtyTrac CEO James J. Saccacio confirmed that "some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, while new markets like Provo, Utah, and Boise, Idaho, have seen large increases."

Established foreclosure hubs, including Las Vegas and Orlando, may actually be experiencing some improvement as deep price discounts and first-time home buyer tax credits draw more people into the market.

The shift from a foreclosure crisis driven by risky loan underwriting to one based on job losses and salary cuts, meanwhile, has increased activity in states like Oregon, Arkansas, Illinois, and South Carolina that previously were relatively insulated. "

As unemployment rates increase in different parts of the country, it's very likely that we'll see similar patterns develop elsewhere," says Saccacio.

Source: Reuters, Lynn Adler (07/30/09)