According to data made recently available by Trulia.com we still haven’t reached the bottom of the mess. In real estate there is still no recovery in sight, because many of our country’s largest cities are still struggling with weak demand, high foreclosure rates and maybe worst of all, negative equity is spreading like a wild-fire .
Most of the trouble concerns–the state next door–California, because in the good times expenses tends to let budgets balloon and in today’s leaner times, there is little political will to make the necessary cuts.
And while California as a state has (not) been ‘dealing’ with a looming bankruptcy for quite some time by just dodging it.
Living on the edge seems to be the ‘new normal’ and many Californians just seem shrug the impending doom and gloom off. But apparently kicking the can down the road is obviously not a sure-fire concept to handle the situation as Stockton, Mammoth Lakes and San Bernardino have shown. These three cities have one fate in common, they are now all bankrupt.
Stockton is located in the Central Valley; Mammoth Lakes is close to the Yosemite and the Sierras landmark; and San Bernardino, is in the sprawling Inland Empire–locally know as the I.E.–which is just east of Los Angeles.
Municipal bankruptcies used to be extremely rare, but that’s no longer the case and in states like California the bureaucratic red tape has grown so rapidly, that cutting back is easy to advocate, but very hard to implement. Republican Governors like Arnold Schwarzenegger and Democratic counterparts like Jerry Brown had to recognize that cutting back the expenses to a sustainable level is a rather sisyphean task.
And–according to Huffington Post–the next bankruptcy is just looming around the corner: Compton, CA has to decide until September 1st whether it needs to file for bankruptcy.