Three Trends Leading ECONOMY DOWNWARD - DEMCAD from Flint, Michigan
In some of the conversation I had with my colleagues this week, we looked at a few issues being pushed forward in our community and the unintended consequences of the way certain information is being marketed and spun to what we see as a detriment.
Over the last year in driving down Highway 70 in the Hickory Furniture Mart area, there is a sign that markets real estate by showing the number of foreclosures that this real estate company has available. The number was over 100 the last time I looked.
Now, this blog has been railed against as being negative from the get-go when all we have done is provide what we feel is relevant information to educate the public. We will readily admit that we have an agenda. If you are breathing you have an agenda. Our agenda is to spur economic growth in the area for the masses.
When we look at this sign sitting at one of the highest traffic areas in Hickory, we are amazed that a company would look to market itself in this fashion. This sign sticks out like a sore thumb and I really don't understand what this company is trying to accomplish. Let's say I'm an out of towner looking to move to Hickory and I come off of I-40 Exit 125 and head towards Valley Hills Mall. Is that sign going to spur my interest in moving to the area? And if I have already chosen to move to the area and I go to this company to inquire about real estate, then I am going to lowball any quote they give me, because you have already shown me that you have 119 properties that you are desperate to unload. What does this do for the value of the property of those of us meeting our monthly mortgage in a timely fashion?
Another issue that I have spoken of in the past is marketing ourselves as a low labor cost/low cost of doing business area. I don't believe that this is a positive. It says a couple things. It says that we don't have highly skilled labor in the area and that people are ripe for the taking. Also, what does this say to younger people looking to possibly move to the area, when the people marketing the area talk about how low the labor cost is? Would you want to move to that area? How much income can a youngster look to make here in an entry level position?
I have also addressed the obsession with the tax rate in the area and how it isn't a realistic indication of setting the area up for future growth. This is always pushed at the middle class as the local government looking out for their interests. Well, if you own/have a mortgage on a $100,000 evaluated home for each 1-cent/$100 evaluation the property tax is raised it costs you $10. The Real Estate moguls around here have a lot more to lose. If they control $10 million in property, then each 1-cent raise in property tax costs them an additional $1,000 in property tax. Who do you think the local government is looking out for and answering to?
I'm not arguing for higher taxes. I'm just pointing to the obvious. If money is needed for economic growth and infrastructure, don't let the the government tell you that property taxes need to be continued to be held in check for your benefit. They will be held in check for those who own and control substantial amounts of property. Another hint is to keep an eye on tax assessments on industrial and commercial properties versus residential properties.
