A study released last month by William Lucy, a professor at the University of Virginia, and Jeff Herlitz, a graduate student at the university, indicated that California had 34 percent of the nation's foreclosures last year even though it has only 10 percent of the nation's housing units.
The study also indicated that California, Florida, Nevada and Arizona accounted for 87 percent of "national declines" in housing values.
"California was vulnerable to foreclosures because the median value of owner-occupied housing in 2007 was 8.3 times the median family income, while the 2007 national average was only 3.4 times higher than the median family income (and in 2000, it was lower still at 2.4)," the study observed.
Potential losses in housing values from 2008 foreclosures in all 50 states - if values decline to 2000 levels - were less than one-third of the $350 billion provided to banks and insurance companies to cope with losses in mortgage-backed securities, according to estimates made by the authors of the report.
"Damage to the balance sheets of large banks and AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments," they argued.
Although there are pockets of substantial declines, the report noted that "claims that overall housing values have tanked nationwide are exaggerated": "In the Washington, D.C. metropolitan area, for example, prices have barely changed in the District of Columbia, Alexandria and Arlington County, and parts of Fairfax County in Virginia. The largest price declines (more than 30 percent in 2008) have been in Prince William County, Va., but even there, the range of price declines in its six zip codes ranged from 49 percent to only 6 percent."
Mr. Lucy is Lawrence Lewis Jr. Professor of Urban and Environmental Planning in the School of Architecture at the University of Virginia and Mr. Herlitz is a graduate student in the university's Department of Urban and Environmental Planning.
An article today at therealdeal.com reported that based on data from propertyshark.com "Foreclosures in all five boroughs of New York City decreased by 3 percent between January and February of this year, to 269 from 278 new foreclosures."
"Compared to February 2008, foreclosures have dropped 10 percent. Single- and two-family homes saw the highest number of foreclosure auctions, while condos and co-ops saw the lowest," according to the article.
The study also indicated that California, Florida, Nevada and Arizona accounted for 87 percent of "national declines" in housing values.
"California was vulnerable to foreclosures because the median value of owner-occupied housing in 2007 was 8.3 times the median family income, while the 2007 national average was only 3.4 times higher than the median family income (and in 2000, it was lower still at 2.4)," the study observed.
Potential losses in housing values from 2008 foreclosures in all 50 states - if values decline to 2000 levels - were less than one-third of the $350 billion provided to banks and insurance companies to cope with losses in mortgage-backed securities, according to estimates made by the authors of the report.
"Damage to the balance sheets of large banks and AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments," they argued.
Although there are pockets of substantial declines, the report noted that "claims that overall housing values have tanked nationwide are exaggerated": "In the Washington, D.C. metropolitan area, for example, prices have barely changed in the District of Columbia, Alexandria and Arlington County, and parts of Fairfax County in Virginia. The largest price declines (more than 30 percent in 2008) have been in Prince William County, Va., but even there, the range of price declines in its six zip codes ranged from 49 percent to only 6 percent."
Mr. Lucy is Lawrence Lewis Jr. Professor of Urban and Environmental Planning in the School of Architecture at the University of Virginia and Mr. Herlitz is a graduate student in the university's Department of Urban and Environmental Planning.
An article today at therealdeal.com reported that based on data from propertyshark.com "Foreclosures in all five boroughs of New York City decreased by 3 percent between January and February of this year, to 269 from 278 new foreclosures."
"Compared to February 2008, foreclosures have dropped 10 percent. Single- and two-family homes saw the highest number of foreclosure auctions, while condos and co-ops saw the lowest," according to the article.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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