[Source: Alan Zibel, Associated Press] — The nation’s foreclosure crisis is centered in four states. But taxpayers across the country will feel the pain of bailing them out. California, Florida, Nevada and Arizona generated about half of all foreclosure filings nationwide last year, according to RealtyTrac Inc., even though residents in those states hold just a quarter of U.S. mortgages. Since mid-2007, skyrocketing foreclosures in those states have been magnifying the national rate.
As lawmakers prepare to spend up to $100 billion in financial bailout money on a sweeping foreclosure prevention plan pushed by President-elect Barack Obama, the discrepancy is adding another layer to a problem already confounding economists, politicians, and homeowners.
Just this week, RealtyTrac, an Irvine, Calif.-based foreclosure listing service, reported that more than 2.3 million American homeowners faced the loss of their homes last year, an 81 percent increase from 2007. And Goldman Sachs chief economist Jan Hatzius said in a report that the number of unsold homes on the market is so large that prices are likely to keep falling by an additional 20 percent to 25 percent by mid-2010. But there’s more to it than that. The Sun Belt states now in trouble are the same ones that for decades have taken jobs and residents from states in colder climates…
The risky loans that were prevalent in Las Vegas and Phoenix are “just completely foreign” to North Dakotans, said David Flynn, an economics professor at the University of North Dakota. [Note: To read the full article, click here.]
[Source: Stacy Mitchell, Hometown Advantage News] — The number of shuttered box stores and empty strip malls has expanded dramatically over the last six months, according to data compiled by commercial real estate brokers and investment advisors. And the situation is likely to get much worse. Chain retailers have announced plans to close more than 6,500 outlets by year’s end, even as shopping center construction continues at a furious pace. Developers are on track to bring an estimated 137 million square feet of new retail space online this year. That’s more than the average annual growth during the first half of the decade.
“Alarming” is how one commercial brokerage described the unabated pace of shopping center construction. It is an indication of the degree to which the forces driving retail expansion have become untethered from actual consumer demand. Communities that have not taken steps to limit retail sprawl through their land use policies are at risk of seeing growing numbers of buildings become derelict. Already, vacancy rates at strip malls have reached a twelve-year high, according to the research firm Reis. For the first time since the firm started gathering data in 1980, the total amount of occupied retail space has begun to decline in absolute terms…
In regions that have experienced a major housing boom and bust, such as Phoenix and Florida, the amount of ghost retail has risen sharply and includes stores that were built in advance of new outer-ring subdivisions but never occupied. [Note: To read the full article, click here.]