AP index: Kern 15th most economically stressed county in nation
| Tuesday, Jul 06 2010 07:04 PM
Last Updated Tuesday, Jul 06 2010 07:04 PM
Counties of at least 25,000 residents that were the most stressed in May were Imperial County, Calif. (stress index of 31.74); Yuma County, Ariz. (29.14); Lyon County, Nev. (27.30); Merced County, Calif. (24.55); and Nye County, Nev. (24.45).
For the first time since the AP began the stress index in May 2009, the four states that have shown the most stress each month -- Nevada (21.75 in May), Michigan (16.22), California (16.14) and Florida (15.26) -- improved from the prior month. These states benefited from declining unemployment and foreclosure rates.
The economically healthiest counties were Ward County, N.D. (3.35); Burleigh County, N.D. (3.66); Grand Forks, N.D. (4.02); Ellis County, Kan. (4.13); and Brown County, S.D. (4.25).
To view each county's results, click on an interactive map at: http://hosted.ap.org/specials/interactives/_national/stress_index/.
--The Associated Press
Kern County has the 15th weakest economy in the nation, according to the Associated Press Economic Stress Index.
The monthly index measures financial strain across the United States by examining unemployment, bankruptcy filings and foreclosures. The latest data cover May. Kern County posted a stress index of 21.14, the AP calculated.
Kern has a 15.7 percent unemployment rate, according to the California Employment Development Department. And 4.77 percent of its residential and commercial properties are in some stage of foreclosure, according to RealtyTrac, an Irvine real estate data company.
About 1.78 percent of adults in Kern have filed for bankruptcy protection in the last year, according to data from income tax returns and court filings.
The county always has wild swings in national rankings, frequently falling into the top 10 or bottom 10 nationally depending on what criteria are used, said Richard Chapman, president and chief executive of the Kern County Economic Development Corp.
Kern will always have trouble competing in an index that factors in unemployment.
"We've got areas of the county that have had 30 percent unemployment for 50 years," he said.
But Chapman pointed out that among the nation's 100 largest metro areas, Kern had the second highest rate of private sector job growth over the past 10 years. That's according to data released last month by the U.S. Bureau of Labor Statistics.
Still, there's just no getting around our housing numbers. Since the recession began at the end of 2007, Kern has consistently had some of the highest foreclosure rates in the country.
The county has been hit hard by two separate waves of foreclosures, said Rick Sharga, senior vice president at RealtyTrac.
The first one stemmed from the housing boom, when unsustainable home price escalation combined with questionable loan practices and overbuilding by developers, Sharga said.
The second wave was related to unemployment. First, residents lost their jobs. Then they lost their homes.
"Unfortunately Kern County, like a lot of the Central Valley, had a lot of its employment tied up in construction, so when the building stopped, those jobs went away," Sharga said.
The lack of jobs here is hurting the real estate market because in some cases, people have had to leave the area, and their homes here, in order to find work, said Gail Malouf, who sells homes for Coldwell Banker and is president of the Bakersfield Association of Realtors.
There has been progress on the housing front this year, however, Malouf said.
"If sellers are realistic in their pricing, buyers are out there," she said.
One major obstacle to recovery is banks have been really stubborn about modifying home loans and permitting short sales, (selling homes for less than borrowers owe on a mortgage), said John Colwell, a San Diego lawyer who sits on the board of the National Association of Consumer Bankruptcy Attorneys.
"They need to change the bankruptcy law to allow for forced modification of these loans," he said. "HAMP (the White House's loan modification program) is not addressing the massive volume of the problem that exists, and there won't be a recovery until we find a way to fix the housing mess."
Colwell added that he thinks the nation is on the verge of a "double dip," or return to recession after a brief period of growth.
"Things aren't better, and I think it's going to be a long time before they are," he said.
