Monday, April 09, 2007
Housing Slump Pinches States in Pocketbook
The effects of a slowdown in housing will be far and wide.
You might want to steer clear of bonds that depend on tax revenues from the biggest bubble states.
Chris McCarty, survey research director at the Bureau of Economic and Business Research at the University of Florida, said it would be foolish to “underestimate the effect that the inability to extract equity from homes is going to have.”
In one hint of how much Floridians were relying on property wealth during the real estate boom, 16 percent of new car purchases here were being made with home equity loans in 2006, compared with 7 percent nationally, according to CNW Marketing Research, an automotive research firm in Bandon, Ore. In California, the percentage was even higher — about 30 percent, said Art Spinella, the firm’s president.