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Friday, January 27, 2006

State RE Spending Proposed

An answer is shaping up to the question of what is going to happen to all the extra revenue that the state has been raking in thanks to the real estate boom/bubble. If Representative Larry Springer has his way, a big chunk of the (presumably) continuing flow of cash from real estate taxes will be used to fund housing programs.

The hot housing market has been very, very good to state coffers, contributing largely through real estate taxes to a $1.45 billion surplus.

So, a few Democrats figure, it's time to share some of the benefits with those less likely to be enjoying the boom: those needing affordable housing, including farm workers.

House Bill 2418 would spend $25 million each year for the next four years from collections of the real estate excise tax. In the first year, about $8 million would be set aside for an on-farm housing loan program and rental vouchers for migrant and seasonal workers. That sum could change through amendments.

The rest of the money would be set aside for programs ranging from housing for those with developmental disabilities and victims of domestic violence.
It is only a matter of time before all the excess funding being brought in by real estate is spent away by the politicians. And of course when/if real estate slows back down you know they will be complaining about a budget deficit.

(Leah Beth Ward, Yakima Herald-Republic, 01.27.2006)


flat said...

lefties a day late and soon to be a dollar short on FREE HOUSIN fo da po

Anonymous said...

Look at this one:

6/20/2005 $235,000
Now $369,950

Is the remodeling worth $135,000? You be the judge!

Dukes said...

Good one anon, I drive past this area all the time, what a joke.

I am sure some idiot will buy this because he thinks he is getting a deal being close to GreenLake. We will see.

On another note a real piece of shit went on the market near me in Queen Anne for 637K a few weeks ago, I emailed the realtor and told him he would have to be lowering the price. The house is just not that nice and has lousy curb appeal. Anyway on my daily walk I just noticed it is down to 597K - still out of my range, but a reduction nonetheless.

I am absolutely convinced that the consumer is now being squeezed mightily (witness the drop in GDP which a lot of was due to lowered consumer spending) - this too will have an effect, although lagging on housing.

Also, this area will be forced to lighten up on real estate jobs, I personally know of two very unqualified people right now who are in the biz (houses and mortgages) solely because it is "hot" right now. This is ending as well.

I know this isn't a rosy picture, but it is reality.

biliruben said...

What I want to know is how they got a lot with a view of the lake for 235K in 2005! It must have been a real dump.

I've seen 600 sq ft condos around greenlake with no view go for more than 400K.

There's one across the street going for 759K with nearly the same size lot.

biliruben said...

Ah. I see. It's sitting almost right on 99.

SeattleMoose said...

Better hang on to the money made during the "good times". Once the bubble pops (est. 2007) in Seattle municipalities will feel the cash squeeze and that money will be sorely needed.

Of course the excess will all be spent by 2007 and cities will have to "cut back" which will force more people to sell and the whole house of cards will come crashing down at a faster and faster rate.

Yes, the bust was awful, but people don't seem to correlate the 1999 stock "froth" with 2005 RE "froth".

The field is different, the game....the same.

And most importantly, the outcome....the same.

Anonymous said...

By the looks of reductions in asking prices, the powers that be ought to take a cue from Mayor Bloomberg and start figuring in the inevitability of reduced income from property taxes.

They would be foolhardy not too.