More migration leads to more economic stress

Christy Nameche moved with her family to Kendall County, Ill., in 2007, joining thousands of other hope-filled newcomers who made the county No. 1 in population growth in the nation that year.

Mrs. Nameche liked the farms around her new neighborhood, the fact that she could see the stars at night and the chance to raise her two children with other young families who were pioneering this far-flung Chicago suburb.

Like so many other families, their timing was off.

Just two years later, the developer of Mrs. Nameche’s new neighborhood has gone bankrupt, some neighbors face foreclosure, many lots sit empty and the long-awaited conversion of an adjacent field into a town park is stalled. Kendall County is struggling, another once-booming American locale gone bust.

Fast growth from 2007 to 2008, the early part of the recession, turned out to be a strong predictor of problems as the recession dragged on, according to an Associated Press analysis of recently released Internal Revenue Service migration data, which compares where taxpayers filed their returns from one year to the next.

Kendall County’s population more than doubled to 100,000 over the past decade. In the early months of the recession, people kept coming, before it was clear that the economy was starting to sour.

For every 4 percent increase in new taxpayers from 2007 to 2008, there was a 1 point increase in the Associated Press Economic Stress Index scores from the start of the recession until now.

The index calculates a score from 1 to 100 based on a county’s unemployment, foreclosure and bankruptcy rates. The higher the score, the worse off the county. The average county stress score was 10.2 in November 2009, the most recent month for which figures are available.

Kendall County’s score shot up from 8.06 in December 2007 to 17.9 in November 2009, one of the nation’s greatest gains in economic stress since the start of the recession. The county has been socked with a 10.5 percent unemployment rate, a 2 percent bankruptcy rate and a 6.3 percent foreclosure rate.

While its unemployment rate is only slightly higher than the national rate of 10 percent, its foreclosure rate is about four times higher than the national average and its bankruptcy rate is more than 1 1/2 times the national average.

For those who kept moving to Kendall County in the second half of the decade, “it was just bad luck. They didn’t know this thing was going to crash,” said Dennis Stone, vice president of Pilmer Real Estate Inc. in Plano, Ill. “If they bought in the last five years, most of the people, particularly the people who went for all the mortgage bait that was out there … they’re upside down.”

The term “upside down” - when a home’s market value drops below the amount owed on the mortgage - is one that many taxpayers in Kendall County have learned the hard way.

Two years after the start of the recession, signs of the housing bust are everywhere.

Construction jobs have disappeared, the county has seen a wave of foreclosures and thousands of lots that were prepped for building homes sit empty. Houses that are on the market are being offered for 75 percent of what they sold for three years ago.

Mrs. Nameche is still happy she made the move, despite the fact that the 2,400-square-foot house that she paid almost $240,000 for in 2007 is now worth $20,000 to $30,000 less.

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