Subprime Spillage - How might it play out in Spokane?

Oh what a difference two years makes.  Last week the Center for Responsible Lending (CPL) released an analysis of the ripple effects of forclosures on surrounding properties and communities overall.  As usual, we pulled out the data speaking to our neck-o-the-woods and compared it to others in the region.

King, Pierce, Clark, Spokane and Kootenai counties look to lose about $2.4 billion in housing value/tax base due to foreclosed homes financed with subprime loans during '05-'06 (see chart above).  Out of the five counties Spokane and Kootenai fell well below King, Pierce, and Clark at $128 and $20 million in lost housing value respectively. In terms of average decrease in affected housing units we were again at the bottom with Kootenai and Spokane at $2K and $1.7K respectively. Nationally they project, "the total decline in house values and tax base from nearby foreclosures will be $223 billion." While the study's projections are grim, it's important to remember they're just that:  projections.  Let's just hope for a softer landing around here.

• Impact of Subprime Foreclosures on Neighboring Homes and Local Tax Bases

Comments

[leio]

Thought you guys might be interested.

http://www.walkscore.com/

[Rachel]

let's see percentage not dollar amount. Spokane housing is a lot more affordable that King County. if they dropped 10% in value it would be a lot more than Spokane dropping 10%. I think on the average we are looking at the same percentage as the rest of the country.

[METROSPOKANE]

What's to consider is how a scenario like this can impact property tax revenues/tax base with such a drop.

[sustainable]

Metro - this shouldn't affect our property tax revenues. Spokane County's property tax system is budget based. They tax enough to raise the amount in the budget, if property values go down you will simply pay a higher percentage of your assessed value in taxes, if property values go up you will generally pay a smaller percentage of your assessed value in taxes. Ralph Baker explains it better: http://www.spokanecounty.org/assessor/default.asp

[METROSPOKANE]

Good clarification sustainable. On the revenue side the pain won't be felt, but for the private property owner it might be noticed. Especially in areas with higher levels of default.