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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: regli who wrote (29239)3/23/2005 3:22:43 PM
From: benwood  Read Replies (1) of 110194
 
It's the property tax burdens to prop up the gigantic big city infrastructure which I think will cause the real estate bubble deflation to go on for many years. The costs of living in the city continue to climb faster than inflation, and when people hit the exit ramps, it will accelerate that cost of just being there. This has already happened in a backwater where my parents live where their water service has skyrocketed (well over 100% in three years) plus property tax mushrooming. Coincidentally, last year saw a record for foreclosures there.

This effect will be magnified by the twin headwinds of increased costs for being there with decreased discretionary monies (which itself will be amplified by getting religion -- saving rather than borrowing).

This city exit should be of no surprise to anyone -- it's already happened to retail in most cities, sometimes to such a significant degree that the downtown core has all but collapsed.
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