More Financial And Housing Layoffs

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

Overview

• Las Vegas gambling falls in tandem with housing market.
• Despite declining home values, property taxes will still be high next year.
• NYC financial sector layoffs will set off a chain of layoffs in other sectors.
• Major real estate brokerage lays off 20% of employees.
• Construction worker numbers could fall 23% in NYC.

Macro Effects of the Housing Slump                   

Losing Las Vegas Shows How Americans Crap Out in Housing Casino. “Las Vegas leads the nation in falling home prices, foreclosures and stalled construction projects… More than $10 billion of hotel and casino projects with 10,000 rooms have been delayed on Las Vegas Boulevard, [“The Strip”], according to locally based real estate and economic consulting firm Applied Analysis LLC. Gaming revenue for casinos on the Strip fell for the eighth straight month in August from a year earlier, the longest streak of declines since records began in 1983, according to the Nevada Gaming Control Board in Carson City. The 16% drop in May was a record. August revenue fell 7.4%.”  (Bloomberg, Oct. 16) 

Home Prices May Plummet, But Taxes Won't. “January’s… property assessments for 2009… won't reflect any of the steep home price declines [of] the last year or so. And even if property assessments do drop, property tax bills won't necessarily be any lower… Property taxes climbed relentlessly earlier this decade as home prices rose, according to the National Taxpayers Union. This year Americans will pay more than $400 billion in property taxes, up about 25% from levels in 2004 and double what they paid ten years ago.” (CNN Money, Oct. 14)

NYC Construction Slowdown Seen in 2010. “Layoffs in the financial sector, which accounts for 15% of New York City’s private-sector employees yet 40% of its wages, have challenged the market, said Seth Pinsky, president of the New York City Economic Development Corp.” (Globe St., Oct. 14)

Redfin Blames Economy In Layoffs. “Real estate brokerage company Redfin has laid off about 20% of its employees. CEO Glenn Kelman: The downsizing has more to do with "drastic economic changes" than the company's business model. There are 75 to 80 employees remaining at the company, which means the layoffs announced Tuesday morning affect up to 20 employees. [Kelman] said the company has increased its market share by about 50% in the past year.” (Inman News, Oct. 14)

Construction Will Peak This Year, Then Fall. “New York Building Congress: Construction spending in NYC will set a record of $33.8 billion this year, before declining through 2010. The trade organization predicts spending will fall to $33.4B next year and $26.2B in 2010 because of the credit crunch and government budget cuts. The number of people employed in construction could fall 23% to 100,250 from 130,100 this year, the group said.” (The Real Deal, Oct. 14)

                                                             

                                                                               

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.

Comments

[billddrummer:]

Hi, Judy,

Thanks for the compilation!

In Northern NV, the municipalities are constrained by state law that limits property tax increases. With home values falling now after rising sharply in 2005-2007, many homeowners are seeing increases in their assessed valuation and taxes even as their houses drop in value.

It's a cruel joke.

I don't have any specific statistics on the number of people affected, but reappraisals are scheduled for the majority of properties in the next 18 months. I wouldn't be surprised if the tax rate changes to maintain revenue, since values are down about 20% overall.

Thanks again for this resource!

2008 Oct 17 12:59 PM

[Joshua Lacey:]

As our country sinks deeper and deeper into financial crisis little is being said about the direct link of our dependence on foreign oil. The exorbitant cost of fuel has strained every aspect of our economy. It doesn't stop at filling up the family vehicles to get back and forth to work and tend to the necessities, as if that were not enough of a sucker punch to our budgets. Utility bills have also seen record rate hikes to cover their increased production costs. Every consumer product has seen sharp rises in both production and shipping costs that are readily passed on to us. Manufacturing companies are finding clever ways to try to conceal the fact that they are making products in smaller packages yet they are costing us more. Who would have thought that the term "half gallon of ice cream" would become an oxymoron in 2008 as most "half gallons" are a pint low now? There is little to no money left over for savings or investing. Jobs and homes are being lost at a record high rate. School districts are strained as to how to make up the budget deficits as the transportation departments now eat a huge chunk of available funds just gassing up the buses. Police departments are trying to offset the additional costs of keeping cruisers on the road. Even animal shelters are feeling the strain as pets are being surrendered in record numbers due to the economy.

We have many natural resources of energy that could be easily tapped such as wind, solar and wave. We also have many advanced technological resources available such as hybrid cars; plug in cars, and alternative fuels. There is obviously no easy and fast solution but we need to be proactive as a nation to devise a plan to incorporate all that is available to us to get ourselves out from under the iron grip of our dependence on foreign oil. We continue to pump hundreds of billions of American's hard earned dollars overseas to countries that hate us with each gallon of their oil we pump. We act dumbfounded as we are swept up in our economy as it goes down the tubes. We are an intelligent nation; we are a technologically advanced nation. We are a nation with the resources we need to end this but we are a nation without a plan.

I just purchased a newly released book by Jeff Wilson called "The Manhattan Project of 2009." What an eye-opener the revelations in this book are to me and should be to our nation at large.

2008 Oct 17 04:47 PM

[Lin:]

I feel the exploding property taxes across the country , with no limit on state + county spending is one of the prime reasons for the forclosure rate in the US ! Why should senoirs on limited income + no kids in school pay these outragous property taxes ! Do notice , the #1 group of foreclosures + bankrupsies in the US today is the folks over 65 , next highest group folks 45-55 .Teachers have only a part time job , 9 months a year , 6-6 1/2 hours a day ! The dumbest students in my high school class were education majors ! The teachers union is the largest union in the US . Let it go the same way as the auto union workers union has . Make these folks actually have to work for their money , + give them the SAME pay + benefits as the other private sector workers get in the US !

2008 Oct 18 05:28 PM

[MacroEconomist:]

The irony of higher taxes on homes is that they force home prices down further.

2008 Nov 23 05:01 PM