QuoteHousing will drag down metro economies, mayors told
The slowdown in the housing market is expected to cost the Jacksonville area nearly $600 million in gross metropolitan product in 2008, according to a study done for the U.S. Conference of Mayors.
The mayors, meeting this week in Detroit, announced the results of a study conducted by the financial analysis firm Global Insight that says cities nationwide will lose as much as $166 billion in GMP growth, including more than $45 billion from the 10 largest metropolitan markets.
"Not that long ago, economists said housing was the backbone of our economy," said Trenton, N.J., Mayor Douglas Palmer, president of the U.S. Conference of Mayors, in a release. "Today, the foreclosure crisis has the potential to break the back of our economy as well as the backs of millions of American families if we don't do something soon. We must not let the economic numbers mask the face of this tragedy -- the families who are struggling to pay their mortgages and stay in their homes."
The real GMP growth for Jacksonville has been revised down to 2.3 percent, meaning a loss of $573 million.
The study found that the foreclosure situation would result in more than 500,000 fewer jobs being created next year nationwide and the potential loss of $6.6 billion in tax revenue in 10 states.
The report does not predict an economic recession in the coming year, but predicts 128 metro areas will have "sluggish" GMP growth of less than 2 percent in 2008.
Foreclosures nationwide are expected to grow by 1.4 million next year, representing a market value of $316 billion. That's expected to reduce home values by an additional $519 billion in 2008, bringing the total forecast of lost equity for the nation's homeowners to $1.2 trillion, according to the report.
Florida as a whole will have growth slow by 1 percent with property tax revenue falling $589 million, behind only New York at $686 million and California at $3 billion. Sales tax revenue is expected to fall $148 million, while transfer taxes will decline $99 million -- the highest drop in the nation.
http://www.bizjournals.com/jacksonville/stories/2007/11/26/daily13.html