Foreclosures and the Creative Class

The Boston Globe compared cities with the highest foreclosure rates to the creative class using foreclosure data from RealtyTrac.

The result: Of the 25 cities with the highest concentrations of "creative class" workers, only one also ranks among the Top 25 in foreclosure rate.

Here are the top foreclosure locations with their rank in terms of percent creative class in parenthesis.

1. Detroit, MI (Richard Florida's rank: 42)
2. Stockton, CA (200)
3. Las Vegas (257)
4. Riverside, CA (46)
5. Sacramento (40)
6. Cleveland (71)
7. Bakersfield (115)
8. Miami (99)
9. Denver (17)
10. Fort Lauderdale (99)*

*Richard Florida's list groups Fort Lauderdale and Miami in the same metro area.

They also compared the places with the highest percentage of the creative class to their foreclosure rate in parenthesis.

1. Washington (41)
2. Raleigh-Durham (53)
3. Boston (69)
4. Austin, TX (58)
5. San Francisco (80)
6. Minneapolis (60)
7. Hartford (65)
8. Albany, NY  (94)
9. Denver (9)
10. Seattle (81)

Your thoughts?

Comments

[Stephen Downes]

I think all this discussion would be more interesting were the list of 'creative' cities more, you know, international.

[Michael Wells]

I think this demonstrates a few points. One is that high prices and overvalued property are different things. San Francisco & Boston have notoriously high prices but low foreclosures -- the local Creative Class economy supports the prices. Stockton & Bakersfield were overvalued and the local economy didn't support the prices.

Of the top 10 Creative Class cities in Rise, Sacramento and Denver are on the foreclosure list. I'm not sure what makes them different. None of the rest are above #40.

Look at the SuperStar Cities where housing price appreciation has outperformed the national average for several decades. Most are on the Creative Class list in Rise, none are on the top 10 foreclosure list.

Many of the high foreclosure cities are declining economies with lots of poor people, many of whom had never owned a house and didn't understand mortgages (I've bought and sold several houses and barely follow the realtor/banker gobbledygook myself.) My guess is that the highest correlation with foreclosure is predatory lending and sub-prime loans that were securitized so that the buyers have no lender to negotiate with.

Relating to the earlier discussion about the Foreclosure map, notice that three (Sacramento, Stockton and Bakersfield) of the top 10 are California's Central Valley -- Modesto probably isn't big enough to make the list. The dark side of the Bay Area Creative Class economy is its impact 100 miles away.