Where the housing crisis is worst
So where's ground zero for the U.S. housing crisis? California, where the prices were perhaps most out of control? Nevada, where new construction was perhaps most out of control?
Try Mississippi, according to one unconventional measure. It's called the "housing misery index."
Readers who are old enough might remember talk in the 1970s of the "misery index," a combination of the inflation and unemployment figures. (Hey, we ought to bring that back, if only the government kept honest inflation and unemployment numbers. Oh well…) Now, Orange County Register real estate columnist John Lansner has come up with what he calls the "housing misery index" — a combination of the unemployment rate and the mortgage delinquency rate.
So by this measure, Mississippi, with an unemployment rate of 6% and a delinquency rate over 9% (!) is in the worst shape, followed by four Great Lakes states — Michigan (no big surprise), Ohio (ditto), Indiana, and Wisconsin.
California ranks 26th by this measure, Nevada 30th.
The states in the best shape are Idaho, Montana, and — taking the top spot — Hawaii.
It would be even more interesting to break down the figures by metro area instead of by state. A quick review reveals the worst delinquency rate in the nation is Merced, California at 8.1%… where the unemployment rate is 8.4%. I suspect the housing misery index might be even worse in El Centro, California and — right across the state line — Yuma, Arizona. Unemployment there is in the 15-20% range, but I can't pin down delinquency figures.
But no matter where you are, the value of your own home is at risk. By one calculation, it could be worth as much as 43% less just four years from now. Details in this special report.
(Hat tip to my beautiful bride for bringing this to my attention.)
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I think that the key will be TTPN (things that people need). In that case, Florida is probably going to surpass the misery index, since nobody needs the things that Florida produces in its cities. (entertainment, NASA, more entertainment)
Right now, there is still a lot of spending going on. When the collapse really comes, and necessities start to take priority, many of those states in the charts will be much better off relative to others that seem to be doing ok now. Especially the midwest, where manufacturing can switch to other products (cars to windmills), food can be produced with more manual labor instead of fossil fuels (organic movement already growing at 10% or more per year), and much of the initial fall in housing starts simply means that those fields with big subdivision maps will stay fields.
Comment on November 2, 2007 @ 3:10 pm
Having lived in Hawaii for the past 16 years it is accepted here that the home prices in Hawaii lag changes on the mainland by about 18 months. We are just starting to see a significant increase in deliquencies and repossetions (and the auctions of homes that follow). Prices have just started to stop rising/drift lower and realestate professions here are still saying that we will not be effected by the mainland bubble. My wife want us to buy a home but I tell her - wait a year or two and maybe 3 and we will have a much better chance on price and location.
Comment on November 5, 2007 @ 3:50 pm
ANY parallels? CEV version —–
Isa 5:8 You are in for trouble! You (lenders) take over house after house and field after field, until there is no room left for anyone else in all the land.
Isa 5:9 But the LORD All-Powerful has made this promise to me: Those large and beautiful homes will be left empty, with no one to take care of them.
Isa 5:10 Ten acres of grapevines will produce only six gallons of juice, and five bushels of seed will produce merely a half-bushel of grain.
Isa 5:11 You are in for trouble! You get up early to start drinking, and you keep it up late into the night.
Isa 5:12 At your drinking parties you have the music of stringed instruments, tambourines, and flutes. But you never even think about all the LORD has done,
Comment on November 12, 2007 @ 10:53 am
[...] “By this measure, Mississippi, with an unemployment rate of 6% and a delinquency rate over 9% (!) is in the worst shape, followed by four Great Lakes states — Michigan (no big surprise), Ohio (ditto), Indiana and Wisconsin. California ranks 26th by this measure, Nevada is 30th. The states in the best shape are Idaho, Montana and — taking the top spot — Hawaii.” Post your comments here [...]
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