Recently there has been a lot of talk about the correlation between foreclosures and unemployment. It stands to reason that in areas with higher unemployment that there would be higher foreclosure rates. While the theory makes sense it is not always the case. Taking a look at local Cincinnati real estate data and foreclosure data there is not necessarily as direct a correlation as you would think.
Cincinnati Real Estate Foreclosures
The foreclosure rate across the Ohio Counties that make up Cincinnati varies greatly. Each county is considered to have a high foreclosure rate (greater than .1%) but even here there is a large gap. Butler .36%, Clermont .28%, Hamilton .19%, Warren .28%.
When you look at recent data the four Ohio counties in the Cincinnati metro area have relatively similar unemployment levels. Butler 8.8%, Clermont 9.3%, Hamilton 8.5%, Warren 8.4%.The entire Cincinnati region is, for the most part, better off than the rest of the nation which has an average of 9.1% unemployment(May 2011).
The correlation between unemployment and foreclosures
Looking at the data the only trend that we can see is that the Cincinnati region is fairly slightly better than the national average in employment but less favorably in foreclosures. What is driving this divergence? There could a be a number of factors such as lending practices during the housing boom, the types of jobs lost during the recession, and the home ownership levels. What is important to realize is that real estate is truly a local business and no matter what the national trends and data points say the important thing to understand is that your local market is the only market to consider and evaluate when looking at a home purchase or sale. To see more counties and search the information yourself click on the link to the interactive foreclosure map on the NPR news site.