Creative Class

I’m in the middle of a research project on the relationship between
the creative class and housing markets. So I was especially intrigued
to find this list of the top 10 metro foreclosure rates from RealtyTrac
(hat tip Dean Alexander).  The story reports that: "Nationwide, 318,355
properties entered some stage of foreclosure during the third quarter
of 2006, a 43 percent increase from a year ago and a foreclosure rate
of one new foreclosure filing for every 363 households. In the next 15
months, more than $1 trillion in loans are due to adjust upward," said
James J. Saccacio, chief executive officer of RealtyTrac. "…it is a
trend that definitely bears watching."

Here’s the top ten: Detroit, Fort Lauderdale, Denver, Miami, Dallas, Indianapolis, Fort Worth, Atlanta, Las Vegas and Memphis.

There is a mix of vacation home spots (Miami, Fort Lauderdale), older metros (Detroit, Memphis) , service economy centers (Las Vegas) and some creative class up and comers (Denver, Atlanta, Dallas).  Note that none of these markets are among the highest priced markets, the majority in fact are inexpensive or moderately priced markets. And also note the absence of any of the leading performers on the creativity index.

The underlying pattern seems pretty clear cut.  It’s not the costs of housing that is the key factor, as Joseph Gyourko and others have argued, it’s the demand. Yes, housing prices are high in leading creative centers, keeping those markets unaffordable for many young creatives, but the markets are not tanking because their economies contrinue to grow and demand for housing remains high.

This entry was posted on Friday, December 1st, 2006 at 8:10 pm and is filed under Housing. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.