Dec
6
Home losses to cost $482M
Filed Under Housing News
Memphis to feel effects more than county
Commercial Appeal: Real Estate
Home foreclosures will drain $482 million from the Memphis area economy next year.
That’s the conclusion of a U.S. Conference of Mayors study of 361 metropolitan areas done by Global Insight of Lexington, Mass.
“That includes reductions in activity in the construction sector and retail sales, then all the smaller economic activity that depends on those,” said James Diffley, who headed up the Global study group.
There was no breakdown on those categories or on lost property or sales taxes, he said.
“Some of that (economic loss) would be reflected in lost tax revenue,” Diffley said.
The metro area figures were based on Global’s models of each city economy, he said.
The findings make sense, said John Gnuschke, director of the Sparks Bureau of Business and Economic Research at the University of Memphis.
“It seems reasonable that we would have a lot of losses, primarily because subprime mortgages are a substantial proportion of the mortgages made here since 2000,” he said. “We have a lot of poor people who were more inclined to take out a subprime mortgage.”
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