“All great things are simple, and many can be expressed in single words: freedom, justice, honor, duty, mercy, hope.” Winston Churchill

Thursday, July 22, 2010

Arizona's Recovery Plan--Lower demand & raise taxes

I recently saw a blog with the title, "Summer of Recovery?". I didn't read it so I'm just reacting to the title. For Arizona, I don't think so. We must have the most treacherous real estate market. Repos are still available really cheap, and those fixing them up are facing low and uncertain appraisals.. This makes selling tough and profitability uncertain. Those investors in the market are having to bring lots of cash and facing uncertain liquidity. Homes may remain on the market or go into the rental pool. Cash investors tend to have their capital tied up and leveraged investors are stuck paying hard-money rates. Either way, a demand checked by poor credit, tightened rules, and under-employment keeps prices and activity down.
There are some qualified buyers, but the prices of fixed-up repos are still low enough to discourage new building. I still don't see much of that happening. There is a little bit in areas buyers have found incredible lot deals where they want to live.
Arizona politicians have found a way to help squash the recovery. SB 1070 is working. Illegal aliens and their families are moving out of Arizona taking their spending with them. These people buy homes, rent apartments, and spend money on all kinds of things. Many pay taxes through payroll deductions, sales taxes, and property taxes, just like the rest of us.
I'm all for just laws, but I'm for actually allowing legal immigration. It doesn't make sense just to say, "Let them follow the rules and come legally." There is virtually no legal immigration allowed from Mexico, Guatemala, etc.
To those who say we just want to follow the law, as if being legal were the same as being right, I remind them that until a few years ago there was a law in Missouri which made it illegal for my people to live in that state. It said that "'my people' were an abomination and should be "exterminated, or driven from the state." Should every other state have "mirrored" the extermination order? After all, it was the law of the land. That law worked too. And there was no "amnesty plan", no loopholes to let "those people" stay in Missouri while they got their legal papers. Just like today, there is no alternative to moving out.