Effects Of Economic Downturn Still In Progress

With the "housing depression" the country is experiencing, the full effect still hasn't been felt. Why? For one thing, many local government entities, including schools, across the country rely on property taxes for a big source of their funds. Around the Greater Cleveland area, property taxes were adjusted two years ago, based on the inflated values of the "housing bubble," as it is now called. With all of the foreclosures and the drop in new and existing home sales, prices have plummeted; in some cases by 75%, in the inner city!!! Suburban values have also dropped, but more like 20% to 25%. Reality will soon hit home, as these new appraisal values will have to be used for property taxes. The amount of decline will be staggering!!! The county and school systems will be in crisis, and it won't only be around these parts, but nationwide.

This is just an example of what has happened: A house on my street (inner city Cleveland) was appraised for tax purposes at nearly $100,000 in 2006. The owners lived in suburban Cleveland and the property was foreclosed on last October, and the renters forced to leave. It was sold at a sheriff's auction for about $50,000. I "assume" some investor or investment group bought it, but I don't know that to be a fact, but a bank was appointed as trustee. From last October until recently, the house was vacant, but during winter, a snow plow crew would arrive to plow snow from the driveway and shovel snow from the sidewalk. In May, the house was sold to an individual for the stunning price of $36,500!!!!

Keep in mind, similar is taking place all over the country; sometimes with less of a drop in value, and sometimes with an even bigger drop in value. How will all of this affect the community where you live?