The fallout from last year’s events in Ferguson, Missouri continues including this look at the changes in property values:
For the city’s 2014 budget, approximately 20 percent of the city’s revenue came from the city’s courts, and 17 percent came through property taxes. But after a Department of Justice report found the courts were profiting off racial discrimination, the State of Missouri took over to implement reforms. Couple that with rapidly falling property values (which are used to calculate owed taxes) and it seems like key parts of the city’s business plan are falling out from under it…
The average selling price of a home in the city has been on a steady decline since the shooting of Brown last August, according to housing data compiled from MARIS, an information and statistics service for real estate agents. Prior to Brown’s death, the average home sold in 2014 was selling for $66,764. For the last three and a half months of the year, the average home sold for $36,168, a 46 percent decrease.
The trend has continued on through this year, with the average home selling for only $22,951 so far in 2015. Another negative indicator: in the eight and a half months leading up to Brown’s death, the average residential square foot in 2014 was selling for $45.82. In the eight and a half months since Brown’s passing, the average residential square foot in the city has sold for $24.11. That’s about a 47 percent downtick in one of real estate’s core indicators.
In the suburbs, where quality of life (including factors like crime, the quality of the houses, performance of the local schools) is paramount in (1) influencing housing values and buying and selling real estate and (2) building a tax base through attracting businesses and organizations, infamy is not a good thing. But, given the patterns of local treatment of people by police in the area, it is hard to see how this wouldn’t affect housing values and the tax base. When given options across the suburbs of St. Louis, how many homeowners or companies would choose to move to Ferguson? And, if we’re honest, hitting suburbanites where it really matters – property values and their tax base (the double whammy of housing and land values going down while property taxes may need to increase to close the gap) – may be what is needed to prompt change.