State budgets axed by housing downturn

Florida, Rhode Island hurting for tax revenue
Business Week reports that at least 29 states and Washington, D.C., have budget shortfalls for the 2009 fiscal year that total $48 billion, and that some state and local governments that "were flush with tax revenue during the five-year housing boom" are now scraping for revenue with the housing downturn.

According to the report, Arizona, Florida, Nevada, Rhode Island and California, which are among the states that are reeling from a real estate downturn, are also topping the list among states with revenue shortfalls.

UBS analyst predicts housing 'depression'
Tom Zimmerman, who heads up a mortgage research division at UBS Securities, reports that the housing market "has been in a recession for the past year" and there is a likelihood that the housing market is headed for a "depression" once the "overall economy slips into a recession," according to a Reuters report. Zimmerman also said during a Wednesday conference call that housing finance "is really in a disaster situation right now and I see no change in that very quickly," according to the report.

Fairfax County to convert foreclosures into affordable housing
Officials in Fairfax County, Va., approved a program this week to spend about $10 million in tax revenue to assist in the purchase of as many as 200 foreclosed homes to fill a demand for affordable housing, according to a Washington Post report. The county has plans to buy 10 houses outright, according to the report, and "the rest will be purchased by qualifying buyers with the help of government-backed, low-interest loans." Most purchase prices will be limited to $385,000, and condos will be excluded from the program, according to the report.

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