Foreclosure List Problem Batters Wealthy High-Tech Regions
The effects of foreclosure list inventories have spread to high-technology regions, which were initially thought to be too rich and too strong to be affected by the downturn. Food pantries are now being opened in communities where $175,000 is the median income.
Regions that were initially protected from the effects of the nationwide housing collapse because of their high-tech industries are now suffering the economic difficulties brought about by loads of foreclosure list inventories.
As shown in the Associated Press Economic Stress Index for over 3,000 counties in early 2008, foreclosure list inventories, bankruptcies and jobless rates were not apparent in high-technology regions such as the Silicon Valley in California and the Research Triangle in North Carolina.
But in the last months of 2008, foreclosure list inventories in high-technology regions began to drastically rise, leading to significant bankruptcies and jobless rates.
In the last 12 months, Santa Clara County, where the Silicon Valley is located, experienced a nearly 60 percent increase in bankruptcies, and the numbers are still growing.
In North Carolina, the jobless rate has risen to the 10.7 percent record level, with nearly 200,000 jobs cut down across the state. Around 20 percent of these occurred in the high-tech Research Triangle area, which covers Raleigh, Durham and Chapel Hill.
In Boston, foreclosure list inventories in high-tech communities around the city are rising to their record high levels.
Ohio State University digital economy professor Ed Malecki said the high tech sector is experiencing financing difficulties because angel investors and venture capitalists have been holding on to what is left of their personal wealth as the economy declines.
Digital economy analysts have also observed that high technology regions, which survived most of 2008 with negligible financial problems, are now suffering from the same or higher level of jobless rates, foreclosure list rates and bankruptcy rates faced by regions with no or only few high tech companies.
Russell Hancock, president of Silicon Valley Network, said he thought high tech industries would never be touched by the loaded foreclosure list problem. But he said he clearly was mistaken as every major high tech company previously untouchable, such as Microsoft, Hewlett Packard, Yahoo, Google, Sun and Intel are now laying off workers.
By Cassiano Travareli