Skip to comments.California home prices dive 38%
Posted on 12/19/2008 9:32:16 AM PST by BGHaterEdited on 12/19/2008 9:35:08 AM PST by Admin Moderator. [history]
The median price drops to $258,000 in November from $414,000 a year earlier as foreclosures prop up sales but erode prices.
The median home price in California dived 38% in November from a year earlier as foreclosures propped up sales but eroded prices, a real estate tracking firm said Thursday.
(Excerpt) Read more at latimes.com ...
The market in action. Now middle class Californians may actually be able to afford a home.
In other news today, it has been discovered that water is wet.
Bubbles have to burst eventually. They can’t keep expanding forever.
Wonder what effect they will adjust property taxes?
I went to an open house across the street from my house and was chatting with the agent. She said that the banks are going to send out a whole bunch of default/foreclosure notices after the holidays, which will put a whole bunch more property onto the market and further erode prices.
yeah but who wants to live in california anymore?
This is just the tip of the iceberg. The Northeast is next in line. New York City prices have a long way to fall.
Hindsight is always 20/20. We should’ve sold at what we now know were peak prices. sigh. We’re stuck...upside down. We. Want. Out. Of. California.
adjust property taxes?! surely you jest. ;o)
None. Prop 13 in action.
Your property taxes are set at the value of the time of sale and stay there forever. The exception being structural improvements you make to the property that may increase the valuee. The gvt finds that out because you need a permit to do almost anything to your proprty...decks, outbuildings, patio’s, drainage, etc.
The lesson here is never take out a second mortgage for a boob job.....
In my case, it's not in order because I paid less than 100K in 1987, and although I maybe could have fetched 500K four years ago, it's now probably saleable for less than 3....so a long way to go.
or a sex change
There is almost no more place to build in NYC. This constrains supplies, which helps keep home prices high.
Prop 13 allows a 1% increase per annum of your property tax if the current assessed value of your home is greater than the purchase price. Furthermore, they have back-doored about 20 additional FEES onto a California property owners tax bill since Proposition 13 passed.
Now, the falling prices of homes will allow one to submit an application for reduction of your property tax.
Also, when the last big earthquake hit and depressed homes prices as a result, I filed and received an assessment revaluation without having to actually have the property assessed by a professional. Most homeowners were able to take advantage of that to get their property taxes reduced. I’m not sure if something special was coded into law to allow this or is this was part of Prop. 13 to begin with.
In conclusion, my property tax has moved all over the place and presently stands at over 3.5k a year. I bought my home originally for 220k. Thus, if the tax stayed fixed to 1% of your purchase price, I'd be paying 2.2k a year and not 3.5k.
This should restart the market in Kali.
They probably were 50% overvalued before the drop.
That's a good start...
A free market is great, but not when addressing a basic life necessity: shelter.
Prices have been artificially high since "flipping" became the lazy man's get-rich-quick alternative to work.
Don’t paint with too broad of a brush there.
Rehabbers would probably be called “flippers” because they don’t hold the property long, but they sure and take some dumps and turn them into nice domiciles for folks who need a house.
You're right, of course, but in the last 5 to 10 years, that hasn't helped most buyers who both need a house and can afford it.
The snowball effect of real estate fees and increased tax assesment is a fatal flaw in that argument. The get rich quick folk artificially increase the price of all available housing. Else how do you explain the outrageous prices of falling apart non-rehabs?
I’d say most of it was supply and demand.
When the demand was “normal”, ie, not propped up by people who have no business getting a home loan chasing properties,
you didn’t see the outrageous “appreciation” of property values.
That only works if people have jobs to go to. Once the jobs go out the window, people double up - take on roommates or move in with family and friends. Or they move out of the city. Hong Kong also has a huge supply constraint. Its real estate is down 40% vs 10 years ago.
Yep, from 2000-2003 we saw our house appreciate 58%. The following couple of years (we sold and left the state in 2003) it continued to skyrocket.
Reality is reentering the price scene. There was no way a middle class family could afford to buy a house there, without using one of the stoopid mortgage schemes like interest only.
A loss of 38% on the way down negates a rise of 61% on the way up.
A $100,000 home that lost 38% or $38,000, is worth only $62,000.
A gain of $38,000 on a $62,000 house is 61%.
So you just lost 61% of appreciation. That’s a chunk.
And that 38% drop is just for year over year from November 2007. There are many homes in the Sacramento area near me that have lost over 50% of value from peak, wiping out fully 100% of the houses appreciation! Half-price sale, anyone?
That is great for home affordability in California. Of course, dang painful for anybody who bought at the peak or anybody stupid enough to have refinanced and wasted the appreciation. Welcome to foreclosure. But somebody is going to get a fair price on your home.
The point is, a 38% drop negates a 61% rise. That is a VERY significant increase in affordability.
I bought in February of this year. In 2007 the new home My wife an I fell in love with was $307,000.00. I’m glad we waited. We pulled the trigger at $261,000.00. We knew the value would diminish some, but I’m still very comfortable with our purchase. I’ll probably see my final days in this house. Ah, yes, Bakersfield, Ca.