This is not much of a surprise because these same areas have been doing well for ages.
The areas that are going to be affected for the long haul are those areas that were newly built and would be considered “dead weight” inventory.
Sure, they are reasonably nice homes with desirable amenities. The only problem is that they are not in truly mature and / or affluent areas and could not even be considered “new money” areas.
These communities were built on “bubble wealth” and as such will bear the majority of the weight of the crisis.
Take Stockton, CA. Please take it! Just kidding, but the reality is that two years into the foreclosure crisis and Stockton is a completely different place.
With a 6% foreclosure rate, Stockton has been decimated. City services have been cut and crime is through the roof. Stockton is #1 on the misery index, which accounts for unemployment (16%), inflation (10%).
Factor in the Stress Index, which accounts for foreclosures and bankruptcies, and Stockton scores a 23.55 which is in the top five nationally.
Analysts have absolutely no model to determine how much time it will take Stockton to recover. From a statistical standpoint, Stockton would be considered an “outlier”.
So measure your city and add up your scores. Don’t call up the city or listen to the rhetoric of a politician, do it yourself. The data is readily available.
All you have to do is see how your scores compare to Stockton. You will then get a very good idea of how long your local area will be in the trough.
Appraisal Source is a New York based residential real estate appraisal firm. Their highly-qualified appraisal staff of New York City and Long Island real estate appraisers provide independent residential real estate appraisals for a variety of purposes.
Here’s the original article…Five more years of housing problems, with some stability in local markets