I heard a story on NPR this morning and found the local news link here:
http://www.pittsburghlive.com/x/pittsburghtrib/news/s_590186.html
Following is an excerpt from the story:
There were 2,516 home sales last month, compared with 3,364 a year ago. The median sales price declined 4.9 percent, said RealStats, a South Side-based real estate information company. The report covers Allegheny, Beaver, Butler, Washington and Westmoreland counties.
It's not just California, Florida, Nevada, and Arizona any more. While we will most likely not be subjected to 25-50% house price declines as some of the other higher growth areas have been, deteriorating home prices are decreasing wealth. Deflation has no friends.
Let me point you back to an article I linked to on August 9th. I point out a number of issues with the overall economy and severely reduced tax receipts by government bodies. The Center on Budget and Policy Priorities released an update the information I quoted here. Here is a quote from the updated release:
New gaps have opened up in the budgets of at least 13 states just two months after they struggled to close the largest budget shortfalls seen since the recession of 2001. These 13 states make up a significant share of the 29 states that have already moved to cut spending, use reserves, or raise revenues in order to adopt a balanced budget for the current fiscal year, which started July 1 in most states. Now, their budgets have fallen out of balance yet again.
I don't want to beat on an already beaten drum when it comes to the economy. Clearly, this week alone we are seeing a lot of news with Congress trying to pass some kind of bailout/stimulus program to make sure banks can continue to lend money. But I do want people to understand the impact that is already starting to hit home to local governments. Counties from New York to California are reeling from the fallout of the crisis on Wall Street. Much like the home price declines, I expect that Pennsylvania will not be impacted as severely as other places, but make no mistake, the crisis will eventually hit Western Pennsylvanians. It will have an effect on tax receipts to all local governments at some point. It will have an impact on the ability of some local government agencies ability to borrow. While no one can predict the exact effect it will have on us locally, we do need to keep this in mind when thinking about future budgets.
Thanks for reading.
James
