Posted on 09/25/2006 8:41:42 AM PDT by GodGunsGuts
A lot depends on where you live and the kind of housing you have.
I bought my house in 1999 for $375,000. Currently, it's worth nearly $900,000 on the market. That's not bad for just seven years.
I am in the Bay Area, near Berkley, in an old, established neighborhood of big houses in the hills with views. There are only so many of these areas. Thankfully, for me at least, I am not worried about a loss of value. Land restrictions around me are so tight that essentially nothing can be built.
The "environmentalists" are determined to "protect" HALF of all the land in the Bay Area from development. It's actions like these that keep property and housing sky-high, and it's not going to change, given the nature of the Bay Area voter. It's all "I have mine and I don't want you anywhere near me".
There is over-building in the Central Valley and in Southern California inland areas. But not where I am. Houses around me are selling briskly and for usually higher than the asking price. If you want an older, large home in a good area with big trees and views, you'll pay for it.
And I'll sell to you...in a couple of years.
Here's some satire I thought you might appreciate:
http://www.austrianenginomics.com/id6.html
Why massive bankruptcy? Are they all suddenly unable to make their payments simply because their house may not be worth what they thought it was?
Ah hah! You're in San Diego.
Me too.
Jobs and wages? Somebody has to be making enough money to pay these prices.
Although satire, there is an awful lot of truth in it.
From an expert realtor (in the family).
I've heard that Taxus is paradise for property tax assessors and collectors - how is that working out for you? At least in California, I own my house (I don't rent it from the government tax collector) and it is never reassessed due to Proposition 13 - and there is a 2% annual cap on tax increases.
Say what you want about California, but unlike Taxans, we are free of skyrocketing and unpredictable tax increases. Maybe tax freedom is why California houses are worth more than Taxus houses.
California is about to face another recession. With the exception of Michigan, which has still not recovered, they were the last to exit the last recession. Now, with the exception of Michigan, they are the first to go into recession.
I may be wrong, but I think it's also because California is basically paradise as far as the climate is concerned.
I thought you'd appreciate it. Go back and click on his forecast for 2006. Very interesting stuff.
On housing anyway; the state legislature is barely held in check by the two-thirds requirement for tax increases, and still some new taxes slip through. God help us if the number of Republicans ever drop below a third.
Even housing taxes are changing somewha. The pro-taxers have discovered the "divide and conquer" approach is working. They put together special assessments like pest abatement, beautification, etc. and since they don't involve a lot of money, voters go for them. They never seem to notice that they're getting charged for stuff that government ought to be doing with the money they already get. It frees that money up so that government can blow it on something else. Classical frog-boiling technique.
You're right about the weather in California (San Diego to be precise) being great but if you can't afford to pay the skyrocketing property taxes, the climate is not important. Proposition 13 protects Californians from the taxraisers.
I know someone who moved from Dallas about ten years ago to San Diego. His property taxes are fixed at about 2,600 a year plus a 2% inflation increase and his Dad's taxes in Dallas (before he had to sell) skyrocketed to $13,000 per year. Taxans have it much worse than Californians but they do not realize it. Taxans desperately need a Howard Jarvis out there to save them from the tax-and-spend politicians.
My Mother lives in Houston. Housing prices are incredibly cheap there. My cousin lives in Corpus Christi, and if you live on the water, prices are still high, but elsewhere, it is not so bad.
Lies, Damn Lies and Statistics...
Not disputing that the market has slowed down, but the perception of imminent collapse is bogus. Take San Mateo county as an example (biggest median decline for resale homes of 6.7%). Digging deeper into the stats shows that while the median sale price is down 6.7%, the price per sqft of home is actually UP 6.1% from $579 per sqft to $615 per sqft. breaking it down to the county level reduces the sample size and increases the impact of the sale (or non-sale) of a few VERY expensive properties. a few 1000 sqft homes that sell for $800K (not unusual for san mateo county) is more expensive per foot than a 10,000 sqft home that goes for $5M. The stats only show a market tendency toward smaller homes. My personal take is that the market is flat right now, and will remain flat to down VERY slightly in norcal... too many people with too much money and not enough development. as interest rates increase, rent prices bound the lower end of the market... a 3 bdrm 2 bath home in the nicer areas of san mateo county is renting for about $3-4K per month. Anyone who bought their home more than a year ago is paying less in mortgage than they could rent it for. It would take a depression, not a recession, to cause a significant drop (>10%) in values. not that it can't happen, but the sky is not falling yet.
I love Prop 13 -- but it definitely doesn't help today's sales much. New buyers don't benefit until well into the future, because of the reassessment upon sale.
Home prices have been insane in California for a while, because all the money wants to move to where it's beautiful. But eventually there isn't enough money out there to chase the high prices being asked. I bet that California is going to be hit hardest by the dip in housing. Maine is already suffering the same way...
True - but at least in California a tax increase requires a 2/3 vote in the legislature. Also, the taxraisers are forced to put property tax increases to a vote. In most states, you find out about the tax increase when you get your yearly property tax bill.
For more info on California tax laws, check out www.hjta.org. It has a calculator that shows you how much you've saved in property taxes thanks to Prop 13.
It's nuts, isn't it? I like it here in Ohio. Average price about $135k.
True.
However, do the math:
House in Ohio - $135,000
Winter Coat - $65
Gas Bill - $600 for the winter
Snow Shovel - $14
House in Cali - $472,000
Hmmm.
See post 59.
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