The recent credit crunch is having a noticeable effect on the real
estate market both nationally and locally. The third quarter 2007 Office
of Federal Housing Enterprise Oversight's House Price Index (HPI)
indicated a 1.8 percent national home price appreciation, which is 0.4
percent lower than the third quarter 2006. That is the first seasonally
adjusted percentage decline since 1994.
Despite the national decline, the Memphis Metropolitan Statistical
Areas (MSA) HPI for the same period indicated an appreciation of 3.4
percent. Although MSAs in Florida, California, and Michigan have seen
notable depreciation, markets in the Pacific Northwest, the Rocky
Mountains, Texas, and North Carolina are still appreciating well above
the national rates. (1)
Foreclosures filings for the U.S. were up 75 percent from the 2006
to 2007 calendar year with fourth quarter filings up 86 percent. Shelby
County's filings were 2.7 times the national average. (2) Bear,
Stearns Inc., predicts the foreclosure starts for 2008 will reach 1.8
million, about three times the annual average prior to 2006. The spike
foreclosures should occur between the second half of 2008 and the first
half of 2009. By the end of the second quarter of 2009 it is expected
that 90 percent of the existing subprime loans will be refinanced,
modified, or defaulted. (3)
[ILLUSTRATIONS OMITTED]
(1) Corinne Russell and Stefanie Mullin. "House Prices Weaken
Further in Most Recent Quarter; First Quarterly Decline for U.S. Since
1994." United States Office of Federal Housing Enterprise
Oversight. 29 Nov. 2007.30 Jan. 2008
.
(2) "U.S. Foreclosure Activity Increases 75 Percent in
2007." RealtyTrac. 30 Jan 2008
.
(3) Dale Westhoff and V.S. Srinivasan. "The Impact of Rising
Foreclosure Supply on the Housing Market." 30 Jan 2008
.
Text and Maps by Ryan B. Hanson, GIS Services Programmer, Center
for Real Estate Research, Sparks Bureau of Business and Economic
Research, Fogelman College of Business & Economics, The University
of Memphis
COPYRIGHT 2008 University of
Memphis Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
Copyright 2008 Gale, Cengage Learning. All rights
reserved. Gale Group is a Thomson Corporation Company.
NOTE: All illustrations and photos have been removed from this article.