Monday, September 29, 2008

House rejects bailout bill; Dow plunges 500+ points.


Anonymous said...

What does this mean from a local perspective?

Jay Moreno said...

As I understand it, just as in the rest of the nation, it will mean that mortgages will be hard to come by, if not impossible to come by without gold plated credit, high income,a nd much larger percentages of the purchase price as downpayments than before. Young, first time buyers and GI buyers will be particualrly hard hit.

Developers will be pulling in their horns even more - and longer.

Consumer loans - from autos to appliances - will be negatively impacted.

Realtors will be looking for other jobs. Construction workers will be hurting even worse than they are.

Restaurant owners and workers will be hurting as people trim their discretionary spending.

Nothing good will come of the status quo.

Jay Moreno said...

And don't forget: as tax revenues and property values and housing starts decline, in the absence of millage rate increases, local government revenues will continue to shrink.

Anonymous said...

when i bought my 1st home my dad was the co buyer with gold credit.and we still had to put 20% down. then when i bought 3 lots of land i put 15% down.. my banker told me that until 99 that was a must a down payment and a dept to income ratio was looked at very hard as was the persons credit.
so you people can save as we did back then

Anonymous said...

We have a silverspoon society,its time to go back to the basic's, we don't need to be paying for a mess someone else made, while they still draw their big salaries, we'll still be scratching to get by, and they will still be throwing money to the wind like theres no end. This crap needs to stop, and if we suffer, so what. We will suffer anyway, let the high end mucky muc's suffer with the rest of us.

Anonymous said...

I guess its a good thing they are now providing housing on base for the military. This is going to have a lasting effect on the local economy as well. I know three families that are moving to base housing because they can't afford the 20% down payment and they can't afford the three bedroom apartments offered in town anymore.

If this trend continues and there is no money available for others to purchase the vacant homes; what will happen to the local tax digest?

Jay Moreno said...

Yeah, I'm glad you mentioned that. I was pondering the effects of the new base housing when I saw it in the paper the other day.

Back when credit was easy, I can remember Park Place, where I live for now, having a vacancy problem.
Now that credit - particularly for 1st time home buyers - is so tight, Park Place is, for all intents and purposes, at 100% occupancy. Between that and new owners, rents have gone way up.
The base housing may give some temporary relief to are renters - operhaps forestalling any rent increases in the near future.

When the bank takes possession of a home after a default, the bank continues to pay the taxes until such time as a new buyer is found.

However, in the case of VA defaults, where the VA pays off the bank and takes psossesion of the house, I don't believe the VA pays local property taxes, but I could be wrong. Anyone know for sure.

I do know that he lack of revenues from new building starts and the subsequent taxes on the finished structure are surely going to hurt local governments, especially St. Marys where the council does not have the political courage to admit they're overstaffed and let people go.

Anonymous said...

i have to pay the same tax on my place weather its vacant or not.
worth the same with same millage rate.
and with the navy paying what they pay plus housing allowance,unless mismanaged should have the money.
i was in usmc we only got half their pay.

Jay Moreno said...

True enough, but you are not a governement. It is a general rule of law that one government entity can not tax another. NSKB, for instance, does not pay a lick of property tax. Given that the VA becomes the owner on defaulted VA financed properties, it follows that the VA would not be obliged to pay taxes, but MAY, if that is the will of Congress. Does anyone know for sure?