H/tip Deipnosophist/David Gordon
On a Losing Streak
The effects of America’s worst property crash go very wide
TO THE many dubious distinctions of Las Vegas, add one more: foreclosure capital of America. According to RealtyTrac, a property-listings firm, one in every ten homes in the city was in some stage of foreclosure last year, almost five times the national rate. In North Las Vegas, a poorer suburb, the figure was one in five. These statistics would be even grislier were it not for lenders’ inability or reluctance to eject all those who are in default at once. People who have managed to hold onto their homes are far from lucky: property prices are around 60% below the peak they reached in 2006, leaving 70% of homeowners in the area owing more on their mortgage than their property is worth. (Nationally, the proportion of homes that are “under water” is a still-awful 23%.)
All this makes Las Vegas the most extreme example of the many cities in America’s sunbelt that grew rapidly thanks to the cheap and abundant credit of recent decades, only to suffer fearsome property crashes during the subprime crisis and the ensuing recession. The ten most foreclosure-afflicted cities in the country are all in Arizona, California or Nevada, notes RealtyTrac. Of the ten most foreclosure-prone states, only one—Michigan, with its car-related problems—lies outside the sunny south and west. As these places are now discovering, it is not just unfortunate property-owners who feel the reverberations of such monumental busts, nor are their effects confined to pocketbooks.
Full article here: America’s property market: On a losing streak | The Economist.
