I can offer some anecdata on this, as two people who have put places up for sale in the last few weeks had offers on the table within a day or two.
Supply is at its lowest in a decade, new housing construction is at its highest in a decade, and prices are rebounding. All of which is good news, economy-wise. And also good news for governments budgets, since local and state governments are highly dependent on property taxes (and thus property values).
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Signs of a Housing Recovery Point to a Stronger Economy
The United States housing market is not yet in good shape, but it is getting better, and in that there may be hope for a surprisingly strong economy this year.
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As property values rise we'll see a huge influx of refinancing as well. I'm underwater in my house and have been dying to take advantage of the really low rates out there but lenders won't touch my house with a 10' pole.
I didn't buy more than I can afford, so I'm not in danger of losing my house or falling behind, but it'd be really nice to be able to drop my interest rate from 7.1% to even 4%
Indeed. The housing market and everything about it a huge component of our national and individual economies.
Your mentioning of local communities and property taxes got me thinking. A lot of communities have been looking to supplement the lost tax revenue from properties by finding where other places have been slipping through the cracks.
We've seen things like sales tax laws on Internet purchases and penalties for web-based education that doesn't get certified by the state.
I wonder if that stuff will drop off as the smaller government coffers start to refill with property values going up and if they will return to complacency, or if their "eyes are now open" to where they need to check their perceived losses.
I think there's a constant push for revenue (or tax reduction), which means all those things remain on the table.