Wednesday, March 2, 2011

Zombie walk down Foreclosure Lane

To continue my B-Movie monster work, I though we would start in with Zombies, the walking dead. Doomed to roam the earth with no place to stop and call their own wit a deep seeded hunger Wait, we're not talking about zombies, we're talking about the 18+% of people not employed or under-employed. Does that sound high to you? If it does, clean out the wax because this is a brave new world where that shouldn't surprise you. What should surprise you is the media touting a dip to 9.1% unemployment.

In today's Seattle Times, the news actually caught the "catch" in the good numbers released today.  Supposedly, on a seasonally adjusted basis, joblesness in our corner of the country dropped from 9.3% in January to 9.1%.  The state economy added 11,000 jobs in January and everyone should be ecstatic...right?  Well, except if you don't seasonally adjust the numbers we actually had 47,100 jobs disappear.  Poof.

The next number to look at are underemployed and those that have quit looking for work, talk about walking dead.  That number is 18.4%.  That is nearly 2 percentage points higher than the national average of 16.7%.  Since 2009, the state has added only 20,200 jobs and we have an estimated 338,905 (pretty specific number for a government number) that are jobless.  If that is what we have to look at as success, it would take over 15 years to eat up our jobless rate.

In January I lambasted jobs and I believe that is very relevant now.  We still haven't seen the full force of layoffs at the state and local levels. Boeing will add new jobs with the Tanker contract, why that took so damn long I will never understand or at least never accept as being valid.  But those additions are not likely enough to offset the public sector contractions.

The problem that we are seeing here in WA is a stress on the hourly wage and the income of the average family.  That downward stress continues to pull on the housing market.  If you have $15 to $20 an hour workers, it will always be hard to afford $300,000 plus homes.  The loans will always be subprime and we will have a continued depression in housing prices.

Last week, the Oracle of Omaha, Warren Buffet, was quoted as forecasting housing recovery within a year.  I had great respect for that man up until about three years ago, but he has lost his Midas touch and I think that forecast is a self-serving statement.  One of those, I think therefore I am issues.  The indicator are not there for housing recovery as long as it is linked with jobs.  The walking dead will continue to shuffle down foreclosure lane.  Sorry for the downer, but truth isn't always pretty.

So, for an upbeat ending, what can be done?  Well, those that can find work, maybe not in this state, shouldn't be held back by a bad bank loan.  Your economic opportunity shouldn't be put on hold due to a underwater home consisting of WA property.  We have laws in this state that can allow for a worker to walk away from the home with money in his pocket and still get a good night sleep as he prepares for that new job. 

I had a client last month who had tried to work with her bank as her husband left town to find employment.  She came to my office in a fit, the bank, under a deed-in-lieu was going to hold her liable for the whole deficiency.  Not after we got done with them. The bank will be singing nonjudicial foreclosure under the deed of trust and the deficiency goes poof. She now has a clear plan, she will join her husband in his new place, her son will finish school here, and she will sleep like a log for the next couple of months.

The difference for her is a plan... some knowledge... and a pep talk.  We are not walking dead, just asleep because we are afraid to get out of the dreams.  The reality isn't so bad, for those that will go at with their eyes wide open, looking for opportunity, and taking it where they can find it.

1 comment:

  1. Seattle times in just noted that we added 192K jobs last month. But do they mention that the US population grows at a rate of .89% or over 225K people a month. We just shipped 30,000 new graduates to the unemployment line. without actually taking care of the net loss.