CLEVELAND—The US housing market has begun to rebound, but many areas of the country still suffer lingering effects from the recession. This is especially true in states, such as Ohio, with many older industrial cities that had profoundly troubled markets even before the housing bubble popped. The Federal Reserve Bank of Cleveland recently released a staff report titled Policy Considerations for Improving Ohio's Housing Markets, which puts forward several recommendations to help the state get past these hurdles including:

• Instituting a foreclosure fast track for vacant and abandoned properties
• Eliminating the minimum bid requirements at sheriff sales
• Addressing harmful speculation
• Expanding access to land banks
• Improving data collection and access

The staff report was meant to complement a national housing report issued by the Board of Governors of the Federal Reserve System in January 2012.

The state has two major handicaps, according to the report. One, decades of population loss and economic stagnation has led to an oversupply of housing, much of it vacant and abandoned. Second, “spillover effects from a foreclosure rate that was elevated long before the recent recession. Together, these developments make Ohio a special case that does not fit neatly into the more familiar boom-bust narrative observed on a national scale.”

“It takes a long time--an average of one to two years--for mortgage loans to go from delinquency through the foreclosure process in Ohio,” the authors note. They point out that this can result in physical damage to abandoned properties, crime and push down prices in the surrounding neighborhoods. “Many states have moved to speed up the mortgage foreclosure process in cases where the owner has abandoned the home,” they add.