A Warning Light on OC's Dashboard

Submitted by Rich Toscano on January 20, 2006 - 10:31am

The OC Register has an interesting piece on a surge in delinquent property taxes that has the Orange County treasurer a little worried. The treasurer, who seems like a pretty sharp guy, wonders, "[A]re we observing the beginning of a trend or is this a blip?"

People who rely on "traditional" measures of economic health, such as wage growth or unemployment, are missing a big piece of what makes the SoCal economy go: home equity extraction. Lacking a good city-specific way to measure home equity extraction, one of the best ways to get a handle on the health of a given area's homeowners is by observing rates of change of property tax and mortgage defaults. We are only now beginning to see increases, but I believe that with the amount of adjustable-rate debt out there, we will start to see a lot more homeowner fiscal trouble in 2006 and beyond.

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Submitted by barnaby33 on January 21, 2006 - 4:51pm.

Isn't that a lagging indicator though? Aren't banks in some way required to show which revenue streams they are profitable by, and can that be extrapolated into how much equity is being drawn out?

Josh

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