Loss of tax revenue due to high rates of foreclosures
There are large number of foreclosures in bay area. In the month of March alone, as many as 11,000 homes are reported to be in some stage of the foreclosure process. The increasing foreclosure rate has significantly led to the decrease in the property tax revenue generated by the government and an estimate of about $9 million to $12 million is predicted to be the deficit in property taxes in the Solano County.
There has been a drastic change in the scenario of the real estate market in counties like Solano. From nearly no foreclosures in 2005 to the county with the highest rate of foreclosures, the change is really astonishing. More than 4% of the housing loans in the county were reported to be on default. Meanwhile, the home prices also witnessed the greatest decline ever of about 19% from last year. With the increase in foreclosure numbers and the decline in home values going about together, the Solano County alone is expected to incur a loss of assets about three billion dollars in 2010.
Not just Solano, many areas in the bay area like Fairfield are experiencing this trend. Fairfield and Vallejo recorded high decline in the home values. This has resulted in loss of revenue for the government who might face trouble to cater to the basic needs of the people.
Keeping this in mind, a lot of incentives and attractive offers designed for first time home buyers are currently being held back. But the funding given by the HUD to encourage first timers and at the same time get rid of the foreclosures is affecting greatly.
