JEFFREY BROWN: And we turn to housing, its impact on millions of Americans and the national economy.
The news on the home front today was less than encouraging. It showed a new surge in foreclosures. The private firm RealtyTrac reported repossessions rose nine percent from June to July. All told, almost 93,000 homes were taken over by lenders.
RealtyTrac also estimated that more than one million U.S. households will lose their homes to foreclosure this year. The Obama administration has created several programs to try to help people stay in the their houses, but with only limited success. In its latest step, the government announced yesterday it would provide $3 billion in housing aid, $2 billion of that will go to federal grants for states with the highest levels of unemployment aimed at providing bridge loans for homeowners to pay their mortgages.
And for a barometer of where housing stands across the country, we’re joined by four reporters for public media.
Karen Kasler is bureau chief for Ohio Public Radio in Columbus. Gene Grant is a correspondent for the public television station KNME in Albuquerque, New Mexico. Erik Anderson is an editor and anchor for KPBS Public Radio in San Diego, California. And Mark Quinn is producer and anchor of “The Big Picture” on South Carolina’s ETV.
Let me get you all in here first on the foreclosure problem and today’s report. Karen Kasler, you start. What are you seeing in your area?
KAREN KASLER, bureau chief, Ohio Public Radio: Well, this report, the RealtyTrac report, 13,511 foreclosures and filings in Ohio in July. That’s a 27 percent increase over June. And one in 376 Ohio homeowners received a foreclosure notice in July.
What I couldn’t believe, though, in this information was a 68 percent increase in the amount of share of sales in Ohio. So Ohio’s housing problems, we’ve been in the top five or top 10 for years. It’s obviously still a problem in Ohio.
JEFFREY BROWN: And Mark Quinn, let’s go to Columbia, South Carolina. What are you seeing?
MARK QUINN, SCETV Public Television: This is something that is just now really emerging in the headlines. We did not have a huge housing boom like states like Florida and Nevada and in California, so we didn’t have a huge housing bust. But as unemployment has continued to drag on here over the last two years now, two years into the great recession, we’re seeing a lot of people with those unemployment benefits begin to expire.
Those are the folks that are having real problem. So, just now here in the last several months, many of our major metropolitan areas like Greenville, Spartanburg, the city I’m in, Columbia, starting to report more and more home foreclosures.
JEFFREY BROWN: Gene Grant in Albuquerque, something new or something still lingering out there?
GENE GRANT, KNME Public Television: I would say something still lingering. Not so much new, that’s for sure.
Where we sit out here, we’ve got one out of 675 homes have had foreclosure filings. That’s certainly not like you’re hearing from our guests we just heard in Ohio and other places, Nevada, Florida, but it’s still relatively problematic.
We’ve got other 3,800 homes here statewide in foreclosure. And when you factor in all the other economic pressures that are out there for jobs and everything else, particularly construction jobs, it starts to get a little sticky. But we’re holding tight compared year to year, July ’09 to July ’10, and we’re doing a little bit better than last month, just under a percentage point on foreclosure filings. But as your setup said, the rest of 2010 for us here in New Mexico is going to be pretty dicey.
JEFFREY BROWN: Well, Erik Anderson, California, of course, has been an epicenter of the foreclosure problem. Give us an update.
ERIK ANDERSON, KPBS Public Radio: Well, here in California, what you found is that foreclosures are actually down sharply from just a year ago. More than half of the sales here in San Diego County a year ago were involving foreclosure activity, and now that number is down to about a third. So that picture is getting better.
And in addition to that, when you look at notices of default, the foreclosure is kind of the end of this housing process. The notice of default is sort of the beginning, when people first start to have trouble. They start to miss that payment. Those notices of defaults are down sharply as well. Two reasons for that.
One is, is that mortgage companies are starting to be a little bit more flexible in working with the existing owners that run into trouble and they’re reworking some mortgages. And also, there are more short sales in the market as well. So, still distressed properties and still foreclosures going on there, but not quite so much as we had last year.
JEFFREY BROWN: Karen Kasler, let’s go around and broaden this out a little bit, the issue of home sales and prices. What are you seeing?
KAREN KASLER: Well, yesterday we got some good news that the National Association of Realtors announced that the U.S. city with the highest jump in home prices this spring was in Ohio. It was in Akron, a 36 percent jump over a year ago.
And all of our cities — Cleveland had an 11.5 percent jump; Columbus had a 9.5 percent jump; and Cincinnati had a 1.2 percent jump. So home prices are actually increasing, but we still have a lingering problem.
Our unemployment rate is a point above the national average. And Ohio just received the third-largest allocation of the hardest-hit funds from the U.S. Treasury to help unemployed homeowners to pay for their mortgages. That’s hoping to help some 35,000 Ohioans stay in their homes.
So, while home prices are moving up, we still have a long way to go because we have, as I said before, been involved in this at the very beginning. We didn’t make the headlines that some of the other states like California and Florida and Nevada did, but we’ve been here for quite a while.
JEFFREY BROWN: But is there any sense, Karen, as to why home prices are edging up or at least stabilizing?
KAREN KASLER: Well, I think that when you start to feel like there’s a bottom there, maybe that there’s an opportunity to move up. Maybe that’s it.
There are some pockets of stability in Ohio. In Columbus, where I am, we have a lot of government, we have Ohio State University, we have a lot of very stable employment here. But the rest of the state is pretty widespread. We have huge swathes of the state with unemployment levels above 10 percent, above 14 percent in some areas.
JEFFREY BROWN: And Mark, when you said you haven’t really felt bottom the way they have in Ohio, what is happening to values there and sales?
MARK QUINN: Well, one of the things Karen brought up that I hear over and over again in the real estate market in South Carolina is consumers looking for stability. We’ve had a lot of people here who do work in the government sector, it’s being slashed, wondering if they’ll have a job next year. Not the best time to go out and purchase a new home.
Prices have remained pretty stable across most of South Carolina, but there is a huge drop-off in terms of the amount of sales. Charleston, just this week, reported that home sales there down 37 percent compared to last month. So there’s a lot of inventory out there, and it’s a great time to buy, but there’s a lot of people just not really willing to get out there and write that check just yet.
JEFFREY BROWN: Gene Grant, land prices, home prices, what’s happening there?
GENE GRANT: It’s all a big jumble. You know, for us out here, going from last year, July ’09 to July now, we’ve got a 14 percent decrease in pending sales and a 24 percent decrease in close sales. And what’s tied to that, what’s stitched to that is our average home prices are actually dropping.
July of last year, it was $196,000. It’s gone down to $186,000. And, in fact, also, for the average sale price, a $10,000 drop as well. And I think all those factors those other folks just spoke about are very much in play here.
Now, we have a lot of government and federal employment and all that kind of thing, but we’re downsizing in that — in those areas. We’ve got a big, big budget crunch here. We’re shedding employees at state, city, and all levels of government, county government.
And so for a lot of homebuyers out there, the sense is — I’m getting in my reporting — is folks are holding back. They’re waiting to see what’s going to happen a little bit to see how much maybe some of the new federal programs — of course, the $26 billion that was just passed last week, and it’s coming to New Mexico like other places — a little more stability for teachers, for some other folks. How that plays out in home buying is still yet to be answered.
JEFFREY BROWN: And Erik Anderson, are people able to sell a home if they want to, or are they sitting there on the market?
ERIK ANDERSON: Well, there is activity on the market. People are selling homes, people are buying homes. But the way the analysts kind of look at the situation is, is that we’re sort of trawling along this plateau.
We have the peak in ’05, the market crashed in ’08. We’ve kind of bounced back just a little bit, and now it’s kind of holding steady. A little bit up one months, a little down the next month. No real change. A couple of factors are contributing to that.
One is this idea of a jobless recovery. Companies that shed jobs during the recession, during the hard times are not replacing those jobs now that the economy is getting better. Without that additional employment in the area, it makes it a little tougher to buy a job. It also puts more stress on the people who own homes and may have lost a job.
And then there’s the tight financing. People are — you know, great rates out there if you can find them, but people are having a tough time getting the financing they need to buy the homes. The banks aren’t being as loose with the money.
For example, a lot of the refinances a year ago were requiring about a 20 percent equity stake before you can do the refinance. Now that’s up to 30 percent. It makes it a lot tougher for a homeowner who’s looking at a low appraisal and not much equity to get that lower rate that would help them pay their mortgage or to buy or sell a house.
JEFFREY BROWN: Karen, I just want to build a little bit more on this whole connection between housing and the broader economy to the extent that construction, homebuilding are often major sectors for a local economy. What do you see happening?
KAREN KASLER: Well, our home prices — actually, our home sales statewide — were up 14 percent, according to the National Association of Realtors. And our home price average was just below $147,000.
So, Ohio’s home prices are a little bit lower, I guess, than the nationwide averages. But a lot of what’s driving Ohio right now is the unemployment rate.
As I said, we’ve got big areas of the state which have unemployment rates that are much higher than the national average, and the highest is in Clinton County, where DHL moved out of the area about a year ago, and 16.8 percent unemployment in that area alone. So there’s definitely a connection here.
And in Cleveland, we still have that problem with the urban unemployment in that that area. And in Cleveland, you see whole areas of communities where there will be one two homeowners on a street, and every other house on the street is boarded up, everything of value has been stripped out.
One homeowner told me that the concrete steps in front of a house had even been stolen. So there are huge areas where the foreclosure impact has hit really hard.
JEFFREY BROWN: And Mark Quinn, do they make that connection where you are between the housing slowdown such as you see it there and holding back the potential for growth in your region?
MARK QUINN: Well, absolutely. There were an awful lot of jobs tied to the housing sector when the great recession hit.
And when it did, toward the end of 2008, the start of 2008, our unemployment rate here in South Carolina skyrocketed. It was the third-worst in the country, almost 13 percent by some estimates. If you counted the underemployed, a lot of economists tell me it was even over 20 percent.
And they attributed a lot of that to the slowdown in the housing market. There was so much growth that was going on in our coastal regions, places like Myrtle Beach and Charleston, that once that stopped and once that came to a halt, an awful lot of people were looking for work. So there was a very close link between housing and unemployment here in our state.
JEFFREY BROWN: And so, Gene Grant, how does that, for example, play out in the statehouse? How does all this play out when you get to budget issues?
GENE GRANT: It’s very interesting. We’ve got a governor’s race, of course, and that’s been the topic for both of our candidates. And for Governor Richardson, our governor currently, you know, he’s so much concentrating on getting those budget issues correct with the legislature, not kicking the can down the road, which we’ve done the past few times in our legislature. And what’s happening is just like those folks just said, employment in the construction industry is not unlike a lot of western cities where you’ve got a big footprint, a big spread, a lot of roof top communities.
And when things were going well a few years ago, there were plenty of jobs for those folks. And now that there are not, there’s a cascading effect. It’s affecting so much so many industries: suppliers, subcontractors. Anything you can imagine connected with construction are being heavily impacted, and those jobs are not necessarily replaceable.
When you talk about retraining and all that kind of thing, that’s kind of a difficult throw when you’re talking about construction. So, until and if this market comes back, for a lot of construction folks, they could end up a lot like — last week Paul Solman’s report on 99-weekers, those folks that just run out of unemployment benefits, and at that point you just don’t know what’s going to happen.
JEFFREY BROWN: All right. We will have to leave it there. I want to thank you all four very much — Karen Kasler, Gene Grant, Mark Quinn, and Erik Anderson. Thanks a lot.