The foreclosure crisis in USA that has so far been focusing on Arizona, California, Nevada and Florida is spreading its wings to engulf new other states. This will cause further extension of the effects of the housing crisis, more chaos in the economy, increasing unemployment and can be dubbed as a “bubbly thy neighbour” syndrome.
Across the country foreclosure postings increased by 9% to touch 1.5 million borrowers during the first two quarters of this current year according to RealtyTrac. It is the highest since the firm has been tracking the progress of the market from 2005.
The most notable pattern of the foreclosure activity is that the activity has been concentrated in the states of Arizona, California, Florida as well as Nevada. During the last two quarters of 2008 there were 730,000 foreclosure postings marking a 16% spike from the first six months of the same year according to the compilations of ReatlyTrac.
The question being asked is from where did this growth begin? In 2008 all the increases in foreclosure numbers came from the states where the housing bubble had been the most prominent – Arizona, California, Nevada and Florida. Here the increase shot up to 730,000 during the last six months of 2008 – a spike of 16% from the last half of 2007. For the rest of the country the foreclosure numbers surprisingly declined by 5% to 667,000 during this same period.
Currently the foreclosure numbers in states other than the big four are starting to pick up. For the big four the numbers have shot up to 12%. It is 6.5% for the other regions. In some of the sates like Hawaii and Idaho the pick up has been by as much as 53% and 46% respectively. Their speed of increase has been faster than even the big four states.
The recession is largely to be blamed for this shift. Oregon noting an increase of 56% in foreclosures is battling one of the highest unemployment rates in the country. It is superseded in unemployment by Michigan and South Carolina.
In Georgia there was an increase of 18%. Here unemployment has not been rampant but nevertheless the rate of foreclosures is more or less level with the average of the nation. Perhaps this can be explained by its nearness to one of the bubble states – Florida. This same explanation can be applied to Utah with remarkable low unemployment but recently witnessing foreclosure increases; it is close to Nevada.
Other determining factors are differences in state laws and moratoriums.