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Letter to the Editor: Housing Deflation Takes Economic Toll
The following letter was written in response to the May 20 edition of “Eye on the Economy:"
Dear Editor:
Regarding the Federal Reserve’s prognostication that deflation is not in the cards for the economy in general, the flood of foreclosures and short sales in this housing market is having a significant downward pressure on all home values. Custom-building a new home in any price range has become a crazy luxury few families can afford.
Four-year-old homes are selling for 25% below the original sale price (because of foreclosure and short sales); there are record numbers of property assessment appeals based upon downward market pressures; manufacturing jobs are gone and new jobs are not being created; state and local governments continue to increase fees and taxes on the few producers left rather than cut taxes and fees to stimulate growth. Fewer consumer dollars are chasing an oversupply of housing, forcing prices down on existing houses and accelerating the downsizing trend for the new houses that are built.
It is going to take years for homeownership to return to the economic status it had achieved before the current meltdown started, if it ever does.
Dennis Sweeney
Executive Vice President
Home Builders Association of the Greater Rockford Area
Rockford, Ill.
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