Housing Foreclosures: An Economic Indicator

There is a 3-year inventory of unsold houses in Henry County. The Henry Herald reports

the number of foreclosures in Henry County has increased 327 percent from 2000 to 2006, the highest increase in the 10-county metro area.

One traditional indicator of economic health is the housing market. When an industry is represented by the Chamber, the HCQG and provides 24% of the county's workforce - and prices are falling - it is a bad omen for everyone.

Think about the financial game. There are only losers! Real estate agents are leaving the business. Builders are filing for bankruptcy. People are allowed to buy houses they cannot afford. The value of existing houses decline because the market is flooded. This is the result of government’s best efforts to save this "economic indicator" from years of bad policy!

With over 4,500 unsold houses already built it is bewildering why builders continue to seek building permits and zoning for high density housing - which means more units per acre. Foreclosures are the economic indicator begging for action.

The County and Cities have seldom taken a responsible position. Although real people lose employment, businesses and their homes, the official position is apparently grounded in expanding the tax base. When the County refuses a zoning change, the Cities stand ready to approve annexation. In fact, our cities have annexed residential areas that make the maps look like disjointed fingers across the county.

Our elected officials know that a $100,000 house will generate only one-third the property taxes needed to offset costs of government services. The County has succeeded in raising the bar to increase the average selling price on new houses. But the $300,000 median has not been reached. And, unfortunately, the high-end market is now in the most trouble.

The thing officials should be proud of doing is providing caps and ceilings on new development. The county's infrastructure cannot support more cars on the roads, more kids in school, more water consumption, more foreclosures. We cannot support more residential development. The economic harm done to business and quality of life affects everyone. We all lose.