Despite the many recent signs of life in the real estate market -- one possible explanation for why housing policy
has remained largely absent from the presidential debates -- the reality is still grim. The market is far down from where it was in 2008, when the financial crisis was reaching its peak, let alone the days of the housing boom, according to online foreclosure marketplace RealtyTrac
's "Election Housing Report."
Only 35 percent of nearly 1,000 housing markets are doing better than they were on the cusp of the last presidential election, when the meltdown was bearing down on the economy at full force, according to the RealtyTrac report released Monday.
The rest of the country's housing markets analyzed by RealtyTrac are in worse shape than they were then, hampered by a persistent glut of foreclosures, high unemployment and depressed home prices, according to the report.
"Even though there's a lot of good signs, the housing market is still a drag on the economy in many ways," said Daren Blomquist, vice president of RealtyTrac, adding that it still needs some "TLC."
The report found that home prices are below 2008 levels in a majority of counties and that distressed home sales continue to hog a bloated share of total sales. At least 10 percent or more of sales were distressed in most counties, and at least 25 percent were distressed in 1 out of 5 counties, according to the report. That's even considering that existing home sales and home prices are up significantly from last year, and home construction is higher than it's been in four years.
RealtyTrac looked at more than 900 counties nationwide and found that 65 percent of counties measured lower on at least three of five metrics that gauge market stability. The metrics were foreclosure starts (the number of foreclosures initiated), foreclosure sales, foreclosure inventory, the unemployment rate and home prices.
Stubbornly high unemployment and still-rock-bottom home prices appear to be the most consistent drag on the markets examined, Blomquist said.
Some Marked Improvements
Despite the sobering findings, the report also points to marked improvement since the height of the foreclosure crisis. Today, 1.5 million homes are in some stage of foreclosure, down from a peak of 2.2 million in January of 2011, Blomquist said. And foreclosure filings in September, at 180,000, were only about half of what they were in March of 2010, he said.
The markets that have made the most progress are often located in states that allow banks to repossess homes efficiently, Blomquist said. It's partly for this reason that conservatives oppose heavy-handed government action in the housing market and call for -- as Mitt Romney put it -- allowing the housing market to hit bottom, rather than nudging banks to eschew foreclosures.
"Judicial" states, which require a judge to sign off on a foreclosure, are generally moving towards recovery at a slower pace than in non-judicial states, Blomquist said.
"The delays have ensured that people aren't being improperly foreclosed on," he said. "But I also see the other side: 'Well, these foreclosures still have to be dealt with at some point.' "
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