Foreclosures Hastening in Twilight in the Sun Belt region - By: John Lassar

The name Sun Belt conjures up pictures of sunny prosperity but foreclosures are hastening in twilight in this balmy region. At one time there was a scramble for a place in the sun here – different industries set up shop ranging from aerospace, defense, oil and you name it. Entrepreneurs wanted to cash in on low key labour unions and nearness to military bases and good quality products as well as quality services.

Afterwards San Jose in California and Austin in Texas took on the baton and became nerve centres of high technology. Houston became a centre for oil works. Nashville turned into music recording and production pilgrimage, Charlotte focused on banking and finance and various other places basked in the sun copying the wonders started in the Sun Belt.

For more than a generation the Sun Belt prospered like no other area in USA. The growth was so sure and steady that it defied all rules of economics and seemed that the boom would remain eternal. But the bust came leaving behind many pockets desolate and devastated by foreclosures.
The two big questions rattling commoners and pundits are – what caused this sudden bust and how long will it stay? The answers are rather pessimistic.
The areas that linked themselves to housing bubbles and got caught in a frenzy of development, like Las Vega, Phoenix and Fort Myers, suffered the worst jolt falling to depths from dizzy heights. The development could not be sustained and was non-productive. These regions have suffered the most and are continuing to do so as measured on stress indexes. In Maricopa County the stress index high jumped from 5:12 in December 2007 to 12.67 in March 2009. In Clark County the stress index was 10.5 in December 2007 but shot up to 19.3 in March this year. In Lee County it jumped from 10.5 to 19.98 during the same period.

Foreclosures and unemployment have been marching ahead hand in hand. In Florida the growth of the housing boom has been described as a “giant ponzi scheme”. It was a growth machine that has fed on fanciful thinking rather than harsh reality. It was thought that the flow of new arrivals would continue apace and they would go on pumping money into development of real estate.
But without real fuel to maintain the push, the engine spluttered and choked coming to a standstill. In the Sun Belt the sunny parts have been dark spots of haunted foreclosed houses.

About the Author

John Lassar, has been working on ForeclosureRepos.com studying the foreclosures market, helping buyers on the finer points of repo homes for sale.

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