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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Dan3 who wrote (186404)	2/25/2009 9:32:29 AM
From: ChanceIs	Respond to of 306849

>>>Most municipalities assess property taxes by "assessed value" rather than market value, so real estate taxes don't go down even when housing prices collapse.<<< I have yet to see a municipality follow Keynes' advice to put a penny away for a rainy day and spend to stimulate when the sky is dark and stormy. Stated differently, the munis should have imposed special annual excise taxes on real estate during the boom to pay down municipal debt. They also should not have added any new services/personnel at all during the boom. That would have helped damp the real estate bubble -good for everybody as the taxes would have cut demand as you have pointed out. Now we have layoffs - reducing local/state income and real estate prices. The munis are no doubt begging the states, and the states are begging the Feds. There is little mention of this species of moral hazzard - and it is rampant. Nobody values smooth stable growth. Got to have it now baby.