Propelled by falling consumer confidence, little government intervention, an epidemic of record breaking foreclosures, and growing unemployment the long forecast real estate recession has devoured 47 states leaving them with faltering economies.
By and large, the only areas remaining with forecast appreciation in 2008 are local real estate markets that did not experience major booms during the national real estate frenzy, and are isolated to markets scattered throughout 16 states. Few have strong indicators to insure future economic stability in their real estate markets in the near future.
The unprecedented epidemic of foreclosures has weakened housing markets from coast to coast and produced cries for government bail-outs, despite clear public sentiment that a bail-out would be the wrong direction for the country. Housing Predictor forecasts 5.6-million properties will be foreclosed through 2011.
As forecast by Housing Predictor, the crisis has broadened to affect the overall economy and has rapidly worsened in many areas of the nation.
Only three states possess enough real estate markets to remain on the Housing Predictor Appreciation list, and all three are experiencing weaker than expected local economies due to the credit crunch and slow downs in real estate market sales. Oklahoma and North Dakota have rich reservoirs of natural gas to bolster their economies, and Utah remains on the list perhaps more than any other factor because of its strong economic stability and comparatively high employment.
Texas and Washington, long regarded as strong states for projected growth have seen the foundations of their local economies over-whelmed by rapidly declining housing sales and deteriorating economic fundamentals in the majority of their markets.
The two states still rank at the high-end of the nations employment levels, but because of increasing job losses, weakening real estate sales and less other economic activity the two were de-listed from the top appreciating list, which is another clear indication that the economic crisis has spread from subprime mortgages into conventional loans.
All-time record foreclosures precipitated by new creative mortgages have generated major economic problems for the national economy. Job losses are mounting in many areas of the country and as a result many more people will lose homes to foreclosure.
An aggressive effort in Congress offered by House Democrat Barney Frank, Democrat of Massachusetts and chairman of the Financial Services Committee, may pick up steam this week. The plan would provide up to $300-billion in federally guaranteed mortgages to homeowners facing foreclosure, the same type of program Housing Predictor recommended the government enact 6 months ago.