nobody knows. I spend a lot of time absorbing data about the housing market. More often
than not, when one news outlet reports, "Foreclosures at All Time
Low," another is reporting, "Foreclosures in Chicago Up 20%
Since Last Year."
How is this possible?
One of the main problems, as Matt Stoller's article (linked above)
points out, is that there is no one entity that is responsible for collecting
data regarding the housing market, and foreclosures in particular.
Many news articles are based upon numbers provided by RealtyTrac, the Woodstock
Institute, or another third party source. However, there's no government
agency that keeps track of foreclosure data on a national level. The Consumer
Financial Protection Bureau is supposed to have a foreclosure database,
pursuant to the Dodd-Frank Act. Unfortunately, Congress has never appropriated
funds to build it, so it remains a mere mandate. CFPB and HUD are now
working on a joint database, but without funding and no mandated deadlines,
there's no telling when that will be completed.
So why does this matter? Is there a point beyond the accuracy of statistics
spewed in news reports?
Yes, actually. We are attempting to develop housing policy to address the
current housing crisis without any data upon which to base policy choices.
Imagine trying to plan the menu and shopping list for a party where you
have no idea how many guests will arrive. Now, multiply that difficulty
by a million or so. That's the current state of housing policy decision-making.
In the past, the U.S. had one stated policy towards housing: "Increase
home ownership." Now, we have to adjust housing policy towards a
market where foreclosures continue to depress property values and where
the number of available rental units cannot keep up with the number of
prospective renters. Knowing how many foreclosures have been processed,
how many are currently in the pipeline, and how many imminent defaults
or non-foreclosed defaults exist would be immensely useful in planning
Yet we don't have solid numbers. So, the next time you see conflicting
news reports about the rise (or fall) in the number of foreclosures or
the stabilization (or continued depression) of housing values, you'll
know why. In a world of lies, damn lies, and statistics, the man with
no data is king.