Housing market continues to tank as unemployment rises
Despite assurances from government officials that the recession is gradually loosening its grip on the U.S., statistics released today by Zillow, Inc. paint a very different picture. Zillow is a real estate marketing site founded by former Microsoft executives that maintains a database of real estate information from around the country. The latest figures, from the first quarter of this year, show that the housing market continues to suffer ever-deepening consequences from the years of questionable lending practices that created the recession.
Average home values have dropped in every quarter since they peaked at around $240,000 in the summer of 2006, a year before the bottom fell out of the market and values began to plummet. A downturn, therefore, is nothing new — housing values have gone nowhere but down for nearly five years now. What is new is the accelerated rate of fall. Tumbles became a slow trickle in 2009, but the pace at which values are now dropping approaches that felt during the panicked early months of the recession.
The only housing market in the country that has actually seen rising prices since the start of 2010 is the Honolulu metropolitan area. The Pittsburgh area saw prices remain fairly constant from 2010 to the first quarter of 2011. Meanwhile, Detroit, Atlanta, Ocala, Fla., and a number of other metropolitan areas that have otherwise seen economic stagnation and a mass exodus of residents were particularly hard-hit.
Zillow has this chart, among others, depicting overall losses in value:
Image has not been found. URL: http://images.americanindependent.com/zillow.jpgImage courtesy Zillow.com
The foreclosure rate is also up from last year and is approaching peak levels of more than 0.1 percent (that is, one in a thousand homes being foreclosed upon each month), for a total of two million homes mired in the foreclosure process during the first quarter of this year. In a sign that the foreclosure trend isn’t looking to get any better, the country saw a further 1.5 million homes in serious mortgage delinquency and therefore on the brink of foreclosure during the quarter. A record 28.4 percent of homeowners were underwater on their mortgages.
The troubling housing numbers aren’t the only recent sign that the economy is getting worse rather than better. On Friday, the Bureau of Labor Statistics (BLS) released its latest unemployment figures, showing that new unemployment filings are way up. The BLS has determined that the overall unemployment rate is now back to 9 percent, up from 8.8 percent at last reckoning.
The hard numbers betray a grim economic outlook perhaps no better exemplified than by McDonald’s recent national job push. Several commentators have noted that out of an applicant pool of 1 million people, McDonald’s hired 62,000, leaving the fast food giant with a lower acceptance rate than that boasted by Harvard. The fast food industry compensates employees at around half the national median salary for all workers in the job force.
Meanwhile, the Chinese yuan continues to rise against the dollar, driving increased consumer prices in the U.S. and, some prognosticators have argued, a quickening of the year in which China finally overtakes the United States as the world’s top economic superpower.