The Housing “Recovery” is a Total Sham
Forget the happy talk about the housing crisis being over. The stories from this Florida community will shock you
LAKE WORTH, Fla. – Out on the alphabet streets in this once-thriving Florida community, the houses are dotted with black mold. Some have buckled roofs. Others are hollowed out by fire, or the wiring has been stripped. Pests and critters have moved in as the people moved out. On some streets, half of the homes feature boards along the windows, and ubiquitous “No Trespassing: No Traspasar” signs in English and Spanish. “Those are to keep the drug sales out,” says my tour guide, Lynn Szymoniak of the nonprofit Housing Justice Foundation. “I’ve been stopped doing these tours, cops have told me, ‘you’re not supposed to be here.’”
At one time, these homes were exciting products sold by Option One, Ameriquest, New Century Financial, and other mortgage lenders who sprouted up during the housing bubble, and disappeared just as quickly. The explosion of lending pumped up this community, one of the oldest in South Florida (Lake Worth turned 100 this year), and raised property values to improbable heights. Houses that traditionally sold for $75,000 were suddenly going for $250,000 and $300,000. When it all crashed, prices fell 60% and the foreclosures rolled through. In one development called Strawberry Lakes, made up of nice, 2- or 3-bedroom masonry homes on quarter-acre lots, Szymoniak culled through records and found almost 1 in 3 homes in foreclosure. “You can find whole blocks gone here,” she said.
While nationally, home prices have bounced back, as analysts delight in what they call a housing recovery, in places like Lake Worth, prices remain buried. There’s not much chance for appreciation when you have reams of abandoned properties in the neighborhood. Lake Worth is one of those places across the country where the foreclosure crisis never ended.
Despite the handsome main drag in Lake Worth, full of nice restaurants and coffee shops, two blocks away, the streets denoted by letters of the alphabet (A Street, B Street, C Street) are simply devastated. Even some of the shopping centers and commercial buildings off the main drag are in foreclosure. “It’s like a flu spread through and everybody had to leave,” Szymoniak remarked. Practically all of the residential neighborhoods resemble a distressed city after a hurricane, with the landscape seeking to reclaim the properties. In fact, some are covered with FEMA tarps from hurricanes dating back to 2007 and 2008.