Today in the mail was notifications by my county government tax office of the new property appraisals. I am now over $50,000 down in equity in homes that I own. One property, is worth $20k less and another is down $30k or more. Now maybe I am not smart enough to understand high finance like what is playing out in Washington or Wall St., but I know what this means to me.
It means that I have less equity and less of a reason to own those properties. It means that my mortgage is no longer as advantageous as it was. It means I will be less inclined to spend money on them. And it means that the rental rates will probably come down.
There are 300,000 plus citizens in my county, all of them have lost value and equity today. What of those that purchased property in the last few months or years? They may now be underwater. For sure, all of the properties that were purchased with government backing are! So, tell me how this is good for real estate?
Will this cause many of the new investors of foreclosed properties to look elsewhere for gains? Will the current listings, most which are now going to have to come down in list price going to make agents look incompetent?
I am just a county boy. My view is that with the government not cutting spending, we are going into a hole. Nothing business can do will stop this. Other countries, like the US are devaluing their currency. Inflation is here, only the government can't see it. Food prices increases have been put off by just reducing package size. Gas prices are still going up. Nowhere in my world is the price of health care going down. I just paid $1800 for two crowns on two chipped teeth (too much popcorn) Most people are putting off fixing cars, or buying big ticket items other than TV's.
Obama jets to Palm Beach and plays golf with Tiger. Politicians create an issue that isn't an issue and gun sales go through the roof. Those sales are just money that will not be spent elsewhere. Credit card use is going up, people are taking what little equity they can out of their homes. Education is still costing more, unpaid student loans are rising while our young adults can't find jobs. I believe I heard Obama talk about jobs being his #1 priority, but it seems that campaigning is.
The GOP isn't any better. If you think that there is a cover up in the State dept, start criminal proceedings. Stop talking, do. The best defense is a good offense. Make the case for your ideas, not just bashing others.
The other main source of wealth in the country for thge middle class is the stock market. We all know that the massive amounts the Fed is pumping into the economy is the reason for the most recent gains. The question isn't how far it can go up, but how far it will drop when the spending stops.
Just in my county, 20-30% drops in real estate values. When other counties across the nation have to reassess their real estate values, do you think it wll be any different?