As President-Elect Obama prepares to take control of the country, he inherits one of the biggest economic and real-estate crisis’s this country has seen since the Great Depression. As home prices continue to plummet and foreclosure rates continue to rise one has to wonder who would want to be President at a time like this. Yet, hidden in the recent election data there is an interesting trend that so far has been widely ignored by most – is it possible that foreclosure rates helped decide who our next President was going to be? Would whoever carried the states with the highest foreclosure levels be our next President?
First of all, why are we so interested in this type of data? Primarily because in this current economy the so-called purple states (the top 10 states with the highest foreclosure rate) represented an identifiable voting bloc of individuals. During normal economic times foreclosures are spread across a highly diverse group of people that in itself may not represent much of a trend. However, during this economic downturn people who face foreclosure share common characteristics: many of them have (or had) a job, many of them had an adjustable rate mortgage, and many of them were managing to make their housing payments before other economic factors (such as rising energy prices and mortgage rate adjustments) took effect.
If we look back to the 2000 and 2004 elections we can see that the top 10 foreclosure rate states (Nevada, Florida, California, Arizona, Georgia, Michigan, Ohio, Texas, Indiana and Colorado) had 97 of their votes going for Bush, and 87 votes for Gore (2000) and Kerry (2004). In 2008 we saw a dramatic shift in votes – 159 went for Obama and only 25 went for McCain. Let’s put that into perspective here: The so-called purple states that make up our list made up 203 out of the 270 total votes a candidate needed to receive to win the White House.
All these states shared not only the common characteristic of massive foreclosures, but they also were facing much lower home values for those who remained in their homes, which meant lower property tax values, that led to cut backs in government services and finally reductions in government workers for the state. Talk about a ripple effect!
The only big difference between the top 10 foreclosure rate states in 2008 versus 2000 and 2004 is that Texas was part of the lineup in 00 and 04, whereas New Jersey replaced Texas on the lineup in 2008. Remember, in 2008 the lineup consisted of Nevada, Florida, California, Arizona, Georgia, Michigan, Ohio, New Jersey, Indiana and Colorado. Would we have seen Texas go for Obama in 2008 if it had remained on the list? McCain led Obama 55% to 44%, meaning that a mere 6% shift would have put the state in Obama’s column. Texas is now ranked 24th for foreclosure in the nation, a massive improvement. However, had this improvement not taken place I believe that we would have seen Texas go for Obama – a massive shift.
We’re not the only ones who are looking at these numbers and analyzing the data. Politicians are keenly aware of the shift and how much the purple states came into play. It’s not unthinkable that in the future we may be placing more emphasis on economic and real estate data to predict our next President than we are on traditional polling methods.
Author Resource:-
Leticia Carvalho has been educated in the finer points of the foreclosures market over 5 years. Read about the following article Did Home Foreclosure Rates Predict the Next President? by Leticia Carvalho.
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