Foreclosures continue to be a problem in many cities across the country, but in some areas foreclosure rates are slowly beginning to see improvement. A new article from the Washington Examiner discusses the general improvement of foreclosure rates in the Washington D.C. metro area. The authors attribute these improvements to a stronger economy in the DC area then in other cities and the end of the first time homebuyer’s tax credit, which was the primary driver of new home sales in the last year.
The improvements were not uniform across the DC metro area however, one area that continues to see a significant number of home foreclosures is Prince George’s County in Maryland, where foreclosures rates remain twice as high as other Metro DC areas. Eli Lehrer, National Director of Heartland’s Center on Finance, Insurance and Real Estate argues that foreclosure rates are higher in Price George’s County due to its high unemployment.
“I think the major driver in Prince George’s is high unemployment,” said Eli Lehrer, who runs the Washington office of the Heartland Institute. “The county’s unemployment rate is above 7.5 percent.”
He pointed out the District also has a high unemployment rate but has fewer homeowners and not as many low-income families.
Crime, however, is not a factor in the foreclosure market, Lehrer said, adding it is irrelevant to the situation in Prince George’s. “Yes, it has a higher crime rate than other suburban counties but not on a level of serious violence that would scare people away,” he said.
It may well be years before the market recovers. Foreclosure rates will continue to be a problem until the market is able to adjust housing prices to their true value. Foreclosure moratoriums or forced renegotiations will only prolong the crisis.
