PA Must Reads: A Foreclosure Crisis In Homes Near You

A blog post by Mark Price, originally published at Third and State.

The Harrisburg Patriot News ran a story on Sunday carefully detailing the extent of the foreclosure crisis here in the midstate; it is well worth a read.

Nationally, about 8 percent of homeowners are delinquent, not counting people already in foreclosure.

In the Harrisburg region, less than 7 percent of homeowners are delinquent, according to Lender Processing Services.

One of the biggest causes of a foreclosure is a job loss; with unemployment still very high in the Harrisburg-Carlisle region, the number of foreclosures will remain high. Another factor likely to make the foreclosure crisis in the region worse would be the failure to extend federal emergency unemployment benefits.

The figure below shows the housing price index for the all transactions (new purchases and home refinances) for the Harrisburg-Carlisle region. I present the index without adjusting for inflation. Since the third quarter, housing prices in the region have fallen by 3% compared to a 4.8% decline statewide and a 9.8% decline on average in the nation over the same period. As long as unemployment remains high, home prices will continue to be under pressure to fall.

Of course, as overall inflation has continued to grow during this period, this means that if you consider your home in the Harrisburg-Carlisle region as a store of value, that value on average has fallen by 6.7% since the third quarter of 2008.

Remember, these numbers are averages so you can always hope that your home is below average!