The housing slump has generated public pessimism and caused pain for troubled industries and individuals, but is a bad economy ever good?
Yes -- for those companies providing services that deal with its effects.
Auctioneers, bankruptcy attorneys, credit counselors, debt collectors, and so-called repo men or reposession agents are among the workers now seeing a boom in business. In a stark signal of how bad things are for many, or are expected to get, personal financial advisers are sixth on the U.S. Bureau of Labor Statistics list of the nations 30 fastest-growing occupations and are projected to see 41 percent employment growth through 2016.
In times like these, bankruptcies and foreclosures grow and workers go where the business goes, says John Challenger of Chicago outplacement consulting firm Challenger, Gray & Christmas. Theyre just like migrant workers who go to the harvest.
Harv Levin, an auctioneer in New Castle, New Hampshire, specializing in residential real estate, says hes seen a definite uptick in business of 20 percent to 30 percent in the past six months. He and other New England auctioneers agree that the sheer volume of properties for sale in todays depressed market eclipses anything they saw during the 1990-91 and 2001 recessions. I dont see us coming out of this for a minimum of 12 [months], to maybe more than 24, because theres so much inventory out there, Levin says.
A divorce, a medical crisis, a job loss -- theyre all factors that can lead to the increasing number of foreclosure filings, and Levin is not unsympathetic. You see so many sad things out there, he says, it really kind of breaks your heart sometimes.
The Consumer Credit Counseling Services in Worcester is also doing brisk business. Weve seen more people coming in with problems related to housing, spokeswoman Jennifer Morrow says. What happened is that, perhaps, people were using credit cards to pay for groceries, and using the grocery money to pay for the mortgage, and that works out until you dont have any more credit available.
The number of the nonprofits clients in southern New England seeking debt-management plans and intervention with their creditors through the nonprofit counseling service dropped by about 10 percent in 2007, compared with the previous year. During the same period, those using the groups bankruptcy counseling services jumped by nearly 75 percent. We had fewer people that were, essentially, using us to help pay their creditors back, Morrow says, and more people filing for bankruptcy.
And some economists believe things may get darker yet. People see the value of their wealth declining and are cutting back their consumption, says Paul Harrington, associate director of Northeastern Universitys Center for Labor Market Studies. There are a growing number of people that think this may be the worst recession since the Great Depression.