There's no humor in this top 10 list: The states hardest hit by foreclosure.And it's especially unfunny for homeowners and agents in Nevada, Florida, California and Arizona, who've languished in the top four for most of the real estate recession.
"Those states had similar scenarios," says Rick Sharga, senior vice president of RealtyTrac, a California-based firm that tracks U.S. foreclosures. "They all had unsustainably high home prices and had many buyers who really couldn't afford them -- most with toxic mortgages -- followed by (downturn-related) unemployment."
Some of the country's foreclosure problems revolved around a pervasive American mindset of "object identity," says Barbara Fitch of Pacific Star Real Estate in Corona, Calif. "The house is who they are and that is why (so many) are in this jam."
Unfortunately, the foreclosure beat goes on. RealtyTrac reports more than 300,000 U.S. properties received a foreclosure filing in November 2009 for the ninth straight month.
Here's a look at the top 10 states for foreclosure and how they got there:
States 1 through 5No. 1: Nevada -- In third-quarter 2009, Las Vegas suffered the nation's highest foreclosure rate at 5.13 percent, or more than one foreclosure for every 20 households -- almost seven times the national average. Investors, who snapped up one of every three homes sold at the boom's height, were gambling on future gains after watching Vegas-area median home prices jump 122 percent from 2000 and 2006 -- twice the U.S. rise of 49 percent in that span.
The crash arrived, and real estate and construction jobs fell away -- followed by many casino jobs. While foreclosure numbers were improving near year-end 2009, a 13 percent Las Vegas unemployment rate and 12.2 percent rate in Reno/Sparks helped keep Nevada in the top spot.
No. 2: Florida -- In Miami-Fort Lauderdale-Pompano Beach, unemployment soared from just over 3 percent in early 2006 to 11 percent in fourth-quarter 2009, according to the U.S. Bureau of Labor Statistics, or USBLS. Orlando and Daytona Beach posted slightly higher unemployment, while Cape Coral-Fort Myers posted a 13.7 percent rate, helping place it at No. 4 on RealtyTrac's top 10 foreclosure cities. "It's likely that California will recover before Florida does, partly because of its net growth in population and partly because Florida is lousy with condos, which are typically the last to come back," Sharga says.
From 2003 to 2007 Florida prices doubled and tripled based largely on speculation, says Bernard Haddigan, managing director of Marcus & Millichap, a national commercial real estate brokerage specializing in real estate investment services. Homeowners were aggressively borrowing on future values and lenders were happy to cooperate, he says.