Chief
10-03-2007, 04:47 PM
http://www.iht.com/articles/2007/09/26/bloomberg/bxinvest.php
Contrary to the slogan, what happens in Vegas may not stay in Vegas, at least when it comes to the housing market in the Nevada city.
Tumbling prices in the gambling center will demonstrate how far and how fast U.S. property values will fall in 2008, said William Wheaton, an economics professor at the Massachusetts Institute of Technology.
"Las Vegas is an important barometer for where the rest of the nation's home prices are going, because it's going to show us how quickly the investors head for the doors," Wheaton said. "It will put the floor under the housing correction."
Futures contracts on the housing market, which trade at CME Group, based in Chicago, indicate that Las Vegas will have the largest decline in the country. Investors expect a drop of 5.6 percent by next May, said Justin Walters, co-founder of a money management and research firm, Bespoke Investment Group.
Home values in Nevada fell 1.6 percent in the second quarter from the level a year earlier, the biggest drop in the United States, according to the Office of Federal Housing Enterprise Oversight. Michigan, hard-hit by auto industry layoffs, was second, with a 1.42 percent decline, followed by California, with a drop of 1.38 percent, the government agency said in a report last month.
**SCHNIPP**
Deflation of housing prices is Washingon State's Achilles Heel, because 72% of the money the state collects comes from residential property taxes. If housing prices start to slide in the state, so do State revenues, and you can kiss all those so-called "surpluses" goodby.
Another thing to consider is all of the public debt that is being discussed in the state, and the fact that if tax revenues fall, along with existing home prices, all of that Loot Rail up in Pugetopolis will take a lot longer than 50 years to pay for.
Contrary to the slogan, what happens in Vegas may not stay in Vegas, at least when it comes to the housing market in the Nevada city.
Tumbling prices in the gambling center will demonstrate how far and how fast U.S. property values will fall in 2008, said William Wheaton, an economics professor at the Massachusetts Institute of Technology.
"Las Vegas is an important barometer for where the rest of the nation's home prices are going, because it's going to show us how quickly the investors head for the doors," Wheaton said. "It will put the floor under the housing correction."
Futures contracts on the housing market, which trade at CME Group, based in Chicago, indicate that Las Vegas will have the largest decline in the country. Investors expect a drop of 5.6 percent by next May, said Justin Walters, co-founder of a money management and research firm, Bespoke Investment Group.
Home values in Nevada fell 1.6 percent in the second quarter from the level a year earlier, the biggest drop in the United States, according to the Office of Federal Housing Enterprise Oversight. Michigan, hard-hit by auto industry layoffs, was second, with a 1.42 percent decline, followed by California, with a drop of 1.38 percent, the government agency said in a report last month.
**SCHNIPP**
Deflation of housing prices is Washingon State's Achilles Heel, because 72% of the money the state collects comes from residential property taxes. If housing prices start to slide in the state, so do State revenues, and you can kiss all those so-called "surpluses" goodby.
Another thing to consider is all of the public debt that is being discussed in the state, and the fact that if tax revenues fall, along with existing home prices, all of that Loot Rail up in Pugetopolis will take a lot longer than 50 years to pay for.