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  • 8/20/2019 Mortgage Meltdown: The Financial Impact of the Housing Contraction in the Southern Legislative Conference States

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    A SPECIAL SERIES REPORT OF THE SOUTHERN LEGISLATIVE CONFERENCE

    Sujit M. CanagaRetna Senior Fiscal Analyst Southern Legislative Conference

    Mikko J. Lindberg

    Research Associate Southern Legislative Conference

    The Financial Impact of the Housing

    Contraction in the Southern Legislative Conference States

    Mortgage Meltdown

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    Contents

    Introduction ...........................................................................................................................................................................................1 Background......................................................................................................................................................................................2 Methodology ...................................................................................................................................................................................4

    Chapter 1: Economic and Statistical Data Reecting a Collapsing Housing Sector ...................................................................5

    Background......................................................................................................................................................................................5 Housing Bust and the Mortgage Meltdown ..............................................................................................................................7 Gross State Product (GSP) ...........................................................................................................................................................9

     Table 1: Contribution of Construction Sector to SLC State GSP .................................................................................10  Table 2: Percentage Change in Contribution of Construction Sector to SLC State GSP .........................................11

    Figure 1: Percentage Change in Construction Sector’s Contributions to SLC State GSPs........................................12 Employment in the Housing Market .........................................................................................................................................12

     Table 3: Total Employment and Construction and Extraction Employees in the SLC States ............................13-14

    Housing Starts ...............................................................................................................................................................................15Figure 2: New, Privately Owned Housing Units Started .................................................................................................15  Table 4: Housing Units Authorized by Building Permits ................................................................................................16

    Housing Values .............................................................................................................................................................................17  Table 5: New Privately Owned Housing Units Authorized in the SLC States ............................................................17  Table 6: Valuation of New Privately Owned Housing Units 2002 to 2007 ................................................................17

     Table 7: Valuation of New Privately Owned Housing Units Jan to Oct 2007 and Jan to Oct 2008 ......................18  Table 8: House Price Index (HPI) 4th Quarter of 2002 to 2007..................................................................................19  Table 9: House Price Index (HPI) 3rd Quarter of 2007 and 2008 ...............................................................................20

    Home Sales ....................................................................................................................................................................................20  Table 10: Negative Equity Mortgages by SLC State (as of October 2008) ..................................................................21

     Table 11: Total Sales of Single-Family, Apartment Condominiums and Co-operative Homes ................................21  Table 12: Foreclosures in the SLC States ...........................................................................................................................22

    Foreclosure Activity  .....................................................................................................................................................................23 Table 13: Foreclosures in the SLC States ............................................................................................................................24

    State and Local Government Retirement Systems ..................................................................................................................24  Table 14: Proportion of Mortgages and Real Property in Government Retirement Portfolios ...............................25  Table 15: Role Played by Mortgages and Real Property in Government Retirement Portfolios ..............................26

    Chapter 2: SLC State Revenue Trends .............................................................................................................................................27 Figure 1: Percentage Change in Total Revenues ...............................................................................................................27

     Table 1: State Government Tax Collections from Documentary and Stock Transfers ..............................................29  Alabama .........................................................................................................................................................................................30

     Table 2: Six Major Revenue Categories in Alabama .........................................................................................................31  Table 3: Revenue Percentage Changes in Alabama ..........................................................................................................31

     Table 4: Major Housing and Construction Sector-Related Taxes in Alabama .............................................................31  Arkansas .........................................................................................................................................................................................32

     Table 5: Five Major Revenue Categories in Arkansas ......................................................................................................33 Table 6: Revenue Percentage Changes in Arkansas ..........................................................................................................33  Table 7: Revenues from the Real Estate Transfer Tax in Arkansas ...............................................................................33

     Table 8: Real Estate Transfer Tax Revenue Percentage Changes in Arkansas .............................................................33 Florida ............................................................................................................................................................................................32

     Table 9: Five Major Revenue Categories in Florida ..........................................................................................................35  Table 10: Revenue Percentage Changes in Florida ...........................................................................................................35

     Table 11: Major Housing and Real Estate Related Revenue Categories in Florida .....................................................35  Table 12: Housing and Real Estate Related Revenue Percentage Changes in Florida ................................................35

    Georgia ...........................................................................................................................................................................................36  Table 13: Five Major Revenue Categories in Georgia ......................................................................................................36  Table 14: Revenue Percentage Changes in Georgia .........................................................................................................36

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    Kentucky ........................................................................................................................................................................................36  Table 15: Six Major Revenue Categories in Kentucky  .....................................................................................................37

     Table 16: Revenue Percentage Changes in Kentucky  .......................................................................................................37 Louisiana ........................................................................................................................................................................................37

     Table 17: Six Major Revenue Categories in Louisiana ..........

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