A lot of economists are concerned about the housing problem in the United States.  Some are saying this could lead to a recession, while a few say it could be a significant recession (depression).  One thing is for certain, this problem did not occur overnight, nor will it be solved overnight.

Wells Fargo CEO John Stumpf said Thursday that housing is in the worst shape since the depression of the 1930s.  It’s a rather interesting article, and you can read it here.  Mr. Stumpf does not think we are near the end of the housing troubles, nor do I.

As you may know, I live in Ohio.  Actually a suburb just west of Cleveland.  As I drive around, I see a lot of empty commercial buildings.  Whether it is office space or industrial buildings, the growing number of vacancies can not be ignored.

There is talk of a “regional” effort to deal with the economic problems in my area, but I feel this would just be the creation of another tax district.  You know, how can the region accomplish its goals without money?  Fooey on that!

Just last year, the Fire Department requested funds for a new Fire House.  They said it “would not be a tax increases because the sanitary property tax would expire this year.”  Yes, they were right.  The sanitary property tax did expire and now they are talking about 10% sanitary sewer rate increases each year for the next four years!  Four years from now, our sanitary rates will be 40% higher.  This almost qualifies as bait and switch scheme.  But I’m not done complaining yet…

This year, Cuyahoga County Commissioners had a brilliant idea to help revitalize the Cleveland area.  To accomplish this goal, they took more of our money.  They raised the sales tax to build a new convention center.  To help the poorest city in the nation, the Commissioners took more of their money.  How brilliant is that?

This is a sign of the times.  Money is scarce and it seems most people are oblivious to the world around them.  Until their own little bubble is popped, everything is just fine.

Unfortunately with the housing problem, most of us will probably see some hard times ahead.  And just as you think the housing problem is over, the baby boomers will start moving in with their kids, going to nursing homes, or passing away.  What will this do?  Not only will it stress Social Security, Medicare, and Medicaid.  This will dump even more homes onto a market that has a huge surplus as it is!

In future posts I will expand on some of the issues I have mentioned here.  Especially the local taxes, because it will be a hot topic in the upcoming months.  With property values decreasing, so will city and state revenues.  There will be a lot of pressure to maintain the status quo by raising taxes to offset the decline in housing values.

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