I just ran across a story in the AJC about a bill before the legislature that would force cities and counties to not ignore foreclosures when they are appraising homes for tax purposes.
Basically, currently and historically, cities and counties don't count "distressed sales" when they calculate the value of a property for tax purposes. When the market is rocking, that is fine... there aren't that many of them in relation to other sales. But that isn't the case currently. There are subdivisions and neighborhoods that have as many as a third of the homes in foreclosure, and almost that many on the market at depressed prices.
And that effectively resets the value of homes in the neighborhood that AREN'T distressed. Buyers don't ignore those distressed properties as they decide the value of the homes they are viewing. Why should the county?
Of course, counties and cities are going to freak out if this passes... they will be looking at lower tax revenues. They don't like that...