We keep hearing about the horrible foreclosure statistics. My God you would think that we are having a complete disaster in Florida because we rank 3rd in the nation. So let's give a little context. So California ranks number 1...well it also ranks number 1 in population among the 50 states. Florida ranks 3rd...in population we rank 4th after CA, NY, and TX. Texas is also in the top 10 for foreclosures but they rank 3rd in population. Now when you talk about Nevada which ranks number 2 in foreclosures while being near the bottom in population rank...that is a significant issue. That is the context. So in a really crappy market it is not out of line to see states like Florida, California, and Texas in the top 10 for foreclosures.
I'm not saying the foreclosure rate is great. But I can't tell you how many times I have had to clarify that statistic and the one about the risk of price decline in Tampa. The media reports that Tampa has a 50% risk of a price decline over the next two years. An I have people saying "wow you got it rough because they just read that home prices are going to drop 50% in the next two years." NO THAT IS NOT WHAT YOU READ!!!!!! What you read was that there is a risk of a price decline...that could be 2% or 10%. Who really knows. My crystal ball is cracked.
It would really help if the media would actually make the effort to put things in context and write clearly.
(edited to correct some early morning grammar)
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Excellent article. I wrote a similar post recently about some of the emphasis on foreclosure stats in our Sacramento market.
Yes, they're a problem, they're driving prices down, etc. But some of the hyperbole that gets thrown around gets a bit out of control.
Hey, it doesn't make for a good story if the media doesn't put a spin on the stories to get those ooohs, ahhhs, and oh no.
In Knox County Ohio we never saw the big appreciation figures that they saw in Phoenix, Las Vegas and other parts of the country. This is actually a blessing in a way because we have not seen the values really adjust down that much so getting realistic appraisals has not been a problem in our market. I have heard of markets where the values have dropped 20% and now the appraisers are having a challege appraising the homes. In this case being in a smaller market has proven to be a benefit.
Good post Rick. Helpful to see some analysis applied to these reports of doom and gloom. keep up the good woek.
I don't think the comparison between foreclosure rank and population rank is valid, but I do agree that the media generally spins these stories a lot more negatively than they really are.
RealtyTrac just issued a press release today saying that Nevada had the highest foreclosure rate (1 in 165 households). California is second (1 in 224) and Florida is third (1 in 243). However if you look at foreclosure filings, CA is first (57,875), followed by FL (33,932); OH (17,793); TX, MI, GA (all over 10,000), AZ, CO, IL, and then NV in 10th with 6,197.
Hi Rick, thanks for posting from a different perspective on this issue. Michigan is in a somewhat unusual situation due to the crisis in the manufacturing/automotive industry. However, West Michgan has been holding it's own despite some very challenging circumstances. We have had inceases in foreclosures and short sales...but also signficant increases in construction of some large commercial buildings. I think it's going to be a while before this whole thing sorts itself out.
This was a great post for me to read this morning - I'm talking about this stuff on TV later today. Thanks for an interesting perspective.
Rick- Great post.. I also recently wrote a post about this problem...These foreclosure cults encouraged by the media are simply blind to what is actually happening.. RealtyTrac is terrible.. the information they provide is not only incorrect but ridiculous.. who in their right mind believes that 1 in 224 homes in CA is in foreclosure.. we have a lot of foreclosures because as you note we have a lot of people.. what fails to get published is that most of these high numbers are very concentrated in the Inland Empire, the Central coast and the Sacramento area because of the large number of new developments..
Great post. Coming from California myself - we hear the proverbial sky is falling everyday on the news here. Isn't there anything else to report on? :)
Rick - thanks for a great post! Everyone can skew the facts if they ignore the background information which supports the facts. Rhode Island falls victim to many of these statistical issues because of the fact that we are the smallest state with a pretty decent population considering the size.
Kaye, 1 in 224 sounds reasonable to me. My own research in the MLS puts a possible range at between approximately 1 in 45 and 1 in 90 for Sacramento County.
Actually Sacramento is #7 in foreclosures, according to one source I read recently.
Interesting theory about the new developments. I may try to prove it and write about it.
Wow John I didn't know it was that bad in Sacramento.. that's scary.. If you think about the developments.. many of them did their own financing.. some of it was probably pretty creative..
Rick .. sorry for hijacking your post..
K
Rick, very well written and explain a lot of what is going on right now. I think that most of the times the information is not completely accurate, they only give you part of the picture. In my experience I have learned that foreclosure statistics are not easy to understand because they are very complex. One home might have more than one foreclosure process, are they counting that as 1 or as multiple foreclosures? How about the ones that do not go all the way to auction because they are sold, are they also counting those? I would not put too much credit on what the media say as long as they are so vague.