The housing and foreclosure crisis in America is an underlying issue that wasn’t covered during the presidential debates. Given that 4 out of the 14 swing states are still facing high foreclosure rates, compounded by a still-stagnant economy, housing situation is still a major issue that is at the back of the minds of voters. Housing is a politically sticky issue that neither side wants to tackle and further compounds the image of class division in America.
The latest poll by Public Policy Polling (PPP) finds that Mitt Romney and President Obama are both tied at 49% in North Carolina. In Florida, they find President Obama ahead by one percentage point.
One of these crucial states, Florida faces high foreclosure rates at nearly 12% while the national average is at 3.40%. The Miami Herald has an interactive feature and provides an interesting overview of the economic, jobs, and housing outlook of the nation. Real estate market differs for each region, but what complicates the foreclosure process are the different rules that defines foreclosure for each state.
As you can see from this graph, the U.S. foreclosure rate in 2012 has been the lowest on record.
Sales of new homes rose 5.7%in September (the best pace since April of 2010). But the problem still remains that more than 20% of homeowners owe more on their mortgages than what they are worth. The silver lining here is that, like the economy, the worst seems to be over with upward trend in house sales increasing and optimism that home values are no longer in free-fall. Bloomberg News estimates that new-home sales have increased from 370,000 to 410,000. This should be good news for President Obama. Yet voters may not see this improvement as much as they’d like.
According to Jim Carr, senior fellow at Opportunity Agenda, a non-profit organization, the foreclosure crisis resulted in $7 trillion loss of housing equity which has not been re-gained as of yet. Furthermore, the housing and foreclosure crisis is a long-term issue that needs to be dealt with by policymakers.
That neither side really has any viable solution to the foreclosure crisis is a major problem. With a growing population and young people trying to achieve the American Dream of home-ownership, foreclosure doesn't only represents a loss of property tax revenue. It destabilizes communities. For example, a study points to approximately 8.3 million children that have been affected or are at risk to lose owner-occupied homes since the 2008 foreclosure crisis. Given that these kids will grow up to be members of our future workforce, it's imperative that the housing situation be looked at.
This is a long-term problem that deserves national attention. Politicians on both sides of the aisle need to work together to ensure that people can retain ownership of their homes, especially in light of Hurricane Sandy and the horrific loss of homes that's been shown on television screens across America.
This graph shows at a quick glance the overall housing situation of swing states. States that are facing high foreclosure rates are shown in red and those that fare better are shown in green.
Now, just look at the property values comparing Florida and Virginia (Increase of 4.7% vs 1.4% respectively).
The economic outlook for Virginia is above average as compared to the rest of the state and job growth for the state is chugging along.
The unemployment rate for Florida, as of June is slightly higher than the national average. Still, it's too close to say whether the swing states will go for President Obama or his Republican challenger, Mitt Romney.
Here's a recent video clip from PBS Newshour discussing the large problem of foreclosure in America: