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alstry (36.32)

We All Live In A Condo Now!!!!!!!!!!!!!!!!

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May 19, 2009 – Comments (1)

“For the construction industry, the timing couldn’t have been worse: new, expensive subdivisions opened for sale just as the housing bubble was bursting, leaving entire developments with a huge inventory of unsold units. Now some local Realtors say these subdivisions are facing a new, equally serious challenge: collapsing homeowner associations that can no longer afford to pay basic bills, because so few of the remaining homeowners are sending in their monthly HOA dues.”

“‘The HOAs are a mess right now,” said Sean DePasquale, a senior loan officer with Florida Mortgage Partners Inc. He said this is a particular problem for condominiums that have a lot of unsold or foreclosed units, and it’s tough to get a mortgage these days for anyone interested in buying one of these units at a bargain basement price. ‘Condos are not even on the radar right now for loans,’ he said.”

http://www.theledger.com/article/20090517/REPORTER/905185004

Just like condo associations....most of us are residents of cities, counties, and/or states...... and the tax revenues to our local and state governments is drying up.  States like California are in such a mess, there may be no easy solution without structural changes.

Alstry has been blogging about companies firing 5, 10, and 15% of workforces for the past year over and over again.  And over and over again to the point where many of you thought Alstry was blogging the same thing.  On a number of cases it was the same company firing workers time and time again.  Sometimes the company fired so many it simply shut down. 

Pretty soon, it could be you or your neighbor fired....maybe a bunch of your neighbors who are about to join the unemployed.

As this process continues, so many may become unemployed that the entire tax burden will have to be supported by a few.....and that could be you.

Just like the condo examples above when so few are paying their association dues, the association fails......but unlike the example above, your government officials have taxing authority on you and your property.  What do you think they are going to do if it comes down to a choice between their jobs and your property?

Pay special attention to declining tax revenues and California as it is the state at the forefront of this issue right now.

As Alstry said before......just 12 months........but Alstrynomics is all about being right.

Prepare..........The FACTS are the FACTS.

1 Comments – Post Your Own

#1) On May 19, 2009 at 7:42 AM, alstry (36.32) wrote:

2008

Sales for the first quarter totaled $17.9 billion, a 3.4 percent decrease from the first quarter of fiscal 2007, reflecting negative comparable store sales of 6.5 percent

2009

Comparable store sales for the first quarter were negative 10.2 percent

http://ir.homedepot.com/phoenix.zhtml?c=63646&p=irol-newsArticle&ID=1289742&highlight=

The above is two years consecutive Q1 reports for Home Depot.

Let's break it down to make things easy...and since HD has been closing underperforming stores....the actual declines would have been worse had those stores remained open.

If we assume 2007 same store sales were 100, after a 6.5% decline SSS would be reduced to 93.5 in 2008 and after a 10.2% decline in 2009 sales would be reduced to about 84.

Thus, in a couple years, the sales tax being generated by the average HD store is likely down about 16%....that is a lot of sales tax.....and based on the likely layoffs going foward, sales tax receipts are likely going to go much lower.....

unfortunately your political officials budgeted for much higher receipts to make their voters happy with lots of promises.

Do you think your political officials are going to break their promises to their constituents and risk losing their jobs.....or simply tax you more???????

Prepare.....as many lose their jobs and revenues evaporate......there will be few left to pay taxes.

How few???   You may be surprised.

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