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Housing Misery in the Swing States
In Nevada, Florida and Michigan, the Presidential Candidates Will Have to Talk About Housing
Housing got little play during the Republican primary season, as we predicted, but will it get any attention in the presidential election? With the general election campaign now underway, we updated our Housing Misery Index to see if — and where — the candidates will focus on housing.
The Most Miserable Housing States
Our Housing Misery Index takes two important indicators of a state’s housing market and adds them together. These are:
1) The percentage change in home prices from each state’s own peak during last decade’s bubble until today, from FHFA. Big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery.
2) The percent of mortgages either severely delinquent or in foreclosure, from CoreLogic. Defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures hurt not only the people who lose their homes but also their neighbors.
Four states continue to stand out from the rest for their housing misery: Nevada, Florida, Arizona and California. In these four states, home prices are 40% or more below their peak – and almost 60% in Nevada. In addition to big price declines, Florida has, by far, the highest share of homes where borrowers are either delinquent or in foreclosure; the state’s judicial foreclosure process means that foreclosures take much longer to complete than in most other states. But things are slowly improving: in three of these four most-miserable states – except Nevada – the Housing Misery Index has fallen several points in the last year.
0 commentsMisery Loves Campaigning: The Housing Misery Index and the 2012 Election
According to Trulia’s Housing Misery Index, next week’s Arizona and Michigan primaries could be the last we hear from candidates on housing until California votes in June.
The housing crisis hurt some states especially hard. In those states, like Florida and Nevada, the Republican presidential candidates couldn’t ignore housing. But in states that weathered the housing crisis better, the candidates won’t spend precious money and attention on housing policy.
To see which states are suffering most, we created a Housing Misery Index. Like the original Misery Index, which adds together unemployment and inflation, our Housing Misery Index takes two important indicators of a state’s housing market and simply adds them together. For every state, we add (1) the percentage change in home prices from the peak until today, from FHFA, and (2) the percent of mortgages either severely delinquent or in foreclosure, from CoreLogic.
Why these two indicators? First, big price drops lead to more underwater borrowers and less household wealth, which hurt the housing market and hold back economic recovery. Second, defaults and foreclosures damage consumer confidence in the housing recovery, and foreclosures cause pain not only for people who lose their homes but also for their neighbors.
States That Are Most Miserable When It Comes To Housing
| State | Housing Misery Index |
| Nevada | 73 |
| Florida | 62 |
| Arizona | 55 |
| California | 54 |
| Michigan | 37 |
| Idaho | 35 |
| Rhode Island | 34 |
| Georgia | 34 |
| Washington state | 33 |
| Maryland | 32 |
Note: Index is sum of peak-to-2011Q4 price decline (FHFA) and 2011Q4 delinquency (90+ days) plus foreclosure rate (CoreLogic). Top ten states ranked by the housing misery index are shown.
0 commentsIf It’s Florida, It Must Be Housing
Ahead of next week’s Florida primary, Trulia’s Chief Economist weighs in on why housing matters so much to the remaining Republican presidential hopefuls.
Republican presidential candidates have kept housing on the back burner – until now. Next Tuesday’s Florida primary is moving housing front-and-center. Bold new proposals? Don’t be silly. (Hey, I’m an equal-opportunity critic – I said the same about Obama’s State of the Union.) But Romney did hold a housing roundtable, and the candidates are using housing as a scoop for slinging mud at each other. At least that’s something.
Why does the Florida primary thrust housing into the limelight? Four reasons:
1) The housing bust took Florida down.
Prices in most of Florida have fallen by at least 40% since their peak. Along with Nevada, Arizona and inland California, Florida was ground zero for the housing bubble, and now its residents are deep underwater.
2) Florida is in foreclosure purgatory.
It takes more than two years for homes to go through the foreclosure process in Florida, longer than any other state except New York and New Jersey (which have far fewer foreclosures to begin with). That means 14.0% of Florida loans are stuck in foreclosure, compared with 6.3% in Nevada, 3.2% in Arizona, 3.2% in California and 2.7% in Michigan, according to LPS. This keeps Florida’s housing market in limbo and prevents Florida from benefitting from a plan to sell government-owned homes to investors after a foreclosure is complete.
3) Searches and prices are bubbling.
Despite the bust and the foreclosure backlog, demand is stirring in Florida. Our Metro Movers Index shows that far more house hunters are looking to move to Florida – especially to North Port-Bradenton-Sarasota, Fort Lauderdale, Cape Coral and West Palm Beach –than they are looking to leave. Thanks, baby boomers and investors. And prices rose more than 2% in the third quarter of 2011 in West Palm Beach, Fort Lauderdale and several other Florida metros.
4) What happens in Florida doesn’t stay in Florida.
Florida is a national housing story. One-third of all the searches for Miami homes on Trulia.com are from people living more than 500 miles away. What’s more, Chicagoans and New Yorkers can’t seem to get enough of Florida. Three of the top 10 long-distance search destinations from Chicago are Florida metros, as are five of the top 10 search destinations from New York. You or someone you love cares about Florida.
The Florida housing market represents the worst of the bubble and hope for recovery. Let’s hope the Republican candidates have something to say about it, because Florida voters will.
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