FROM EIR DAILY ALERT
‘Silent’ U.S. Housing Crisis: High Costs, Debt, Rates of Eviction, and Homelessness
May 4, 2018 (EIRNS)—All housing data reports have begun to use the words “affordability crisis”; and evictions and homelessness are surging.
The March report of CoreLogic Inc. found average home prices (new and existing combined) 7% higher than one year earlier. This rise was also experienced in 2013-14; a 5-6% annual rise has been a “floor” since 2011. Home prices are now higher in absolute terms than in 2006. However, new home prices have become so high (the national average is about $375,000) that construction of new homes has dropped off, resulting in an actual shortage relative to demand. Homebuilders are extremely debt-leveraged, and lumber prices have risen by 40% over the past two years. So prices keep rising, while total home sales are dropping at about 4%/year because of a larger fall-off of new home sales.
In the 50 largest U.S. cities, 26 are now designated as “overvalued” locations for houses, meaning average prices are 10% or more above the level at which the average household would pay one-third of its monthly income to own the house. This again from CoreLogic. Its CEO Frank Martell is quoted April 29,
“The dream of homeownership continues to fade away for the average prospective buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis progressively worse.”
One million households were evicted in 2016, or one in 90, counting only those in which an eviction order was issued, not when tenants were removed merely by threats or forms of harassment. From Illinois across the Rust Belt to Pennsylvania and south through Appalachia through the Carolinas, the rate of eviction was between 1 in 50 and 1 in 25, rising as high as 1 in 9 in the Richmond area, according to data reported in the New York Times April 7.
Homelessness in Los Angeles was at just about 35,000 people in late 2017, a 20% increase in one year according to a Bloomberg April 16 story about Mayor Eric Garcetti proposing a fund to provide shelter (in the larger metropolitan area, 55,000 according to the Department of Housing and Urban Development, HUD). San Francisco has a Department of Homelessness, and its data are that 20,000 people there have been homeless for some time during the year, in each of 2016 and 2017. It is currently a major, perhaps the major, issue in the June 5 San Francisco mayoral race. Homelessness in New York City is more than 75,000, which is 4% up from 2016, and 14% higher than 2015 according to HUD. The New Orleans government says the number of chronic homeless has been decreasing, but new, “affordability homeless” numbers are increasing.
