The Housing Crisis Is an Employment Crisis
According to Providence Business News, foreclosures continue to increase:
The number of foreclosure notices in Rhode Island rose 9.2 percent in the first three months of this year compared with 2009, RealtyTrac Inc. said Thursday.
The Irvine, Calif.-based real estate tracking firm said one in every 242 homes in the Ocean State received a foreclosure notice in January, February or March. …
Nationally, RealtyTrac said 1 in every 138 homes received a foreclosure notice during the first quarter, up 16 percent from a year earlier and up 7 percent from the prior quarter.
One difference, locally, is that Rhode Island’s foreclosures actually decreased from the fourth quarter of 2009, while that number nationwide is up. By any measure, though, it seems relevant to predict that the housing market will continue to be a perilous place until people are working again, and that includes a bit of a shift of leverage back toward employees, whose employers will have to worry, once again, that they’ll be able to go elsewhere if they’re not happy.
Surely, some folks were supplementing their income with real estate equity, so even their jobs were insufficient, previously, and also surely, some people are walking away from housing purchases that aren’t now worth as much as they paid. I still think, however, that people will pay their mortgages when they can, so solving the housing crisis will require solving the employment crisis.
Unless, of course, the federal government proclaims a right to own a home and steps in with more Chinese money from the future to pay off consumer loans.