Explaining the Obvious

This New York Times articles discusses the rise in foreclosures and the relationship to house sales. The areas that had the huge growth during the Great Housing Bubble are now having record number of foreclosures. Additionally in the west - the number of sales is just above the number of foreclosures. Here are some interesting parts of the article -

California led the country in number of properties affected by foreclosure moves, but was only fourth in terms of the percentage of homes affected. Nevada led in that dubious category, with 3.4 percent — or 1 in 30 — of the housing units affected. It was followed by Michigan, which missed out on the housing boom but is playing a large role in the bust, and by Florida, which like Nevada experienced a wave of speculative building amid rapidly rising prices.

The states with the lowest rates of foreclosures tend to be states that missed the boom in housing prices and now have reasonably good economies. In South Dakota, there were only 50 homes involved in foreclosures last year, a minuscule 0.007 percent of homes in the state. Vermont, Maine, West Virginia and North Dakota also turned in rates below 0.1 percent.

So then we can see that all bubbles eventually bust. Here is a copy of the interesting graphs that accompanied the article -