Foreclosures of the Future
It’s hard to picture 2.8 million homes. That’s about how many detached homes are in all of Pennsylvania or Illinois. It’s also how many homes were lost to foreclosure in 2009.
There were 3.9 million foreclosure filings last year, RealtyTrac reports today, 2.8 million of which resulted in foreclosure. That’s a record dating back to at least 2005 — when RealtyTrac started keeping track. We say it’s safe to call this one another “worst since the Great Depression” statistic.
Worse yet, RealtyTrac is planning on 3 million foreclosures in 2010. Makes sense – home prices are still way, way below what most people paid from 2003 to today. And 10-20% of the population is out of work… not the seeds of which a housing recovery is sewn.
So check out this bar-napkin math: Census says the average household is 2.59 people… times the 2.8 million homes this year and 3 million guess for 2010… that’s as many as 15 million people up the creek. OK, maybe half of those foreclosures were unoccupied homes… so 7-8 million — equal to the population of Virginia.
“The force of the correction is equal and opposite to the deception that preceded it,” is a dictum of Financial Reckoning Day. With that logic in mind, and the S&P/Case-Shiller Home Price Index, we’d be lucky to just get away with another 3 million foreclosures.