Real Estate 2007

[ricthemic]

was planning on ER (58 yrs yg) this October. Have two houses was hoping to sell primary hs north east area before Oct.

Anyone think this is just like 1991, the last time RE dropped? Will property ever appreciate (like before), continue to drop or stay stagnant for years?

What say you?

As an aside: Past few years we were looking into various properties in Florida to buy. The Fl legislature must be crazy if, as I understand it, your property taxes are fixed and based upon two percent of the sale price.
We thought 100 percent evauluation was bad this is just plane nuts (it it is true). Why would anyone think it is fair to pay twice as much property tax as your neighbor in an identical house just because he bought it five years ago. Why would anyone working person sell his house he perhaps has lived in for ten years to move up to a nicer house and pay five times the taxes.
Move over taxachusetts.

Please enlighten me if I am wrong.

Thank you

[73ss454]

As to your first question I have no idea what the RE market is going to do in the future.

You are right about Florida. I moved down last Dec., my property taxes are $8100 and my neighbor pays around $3800. We have the same house only he has a pool. He moved down 5 years ago though. I bought the house 4 years ago but couldn't homestead. We are wishing that the legislature did something about the problem 2 weeks ago. I can't seem to make heads or tails out of what they did though. Also the taxes in Fl. are a year behind so even if they make a change it would take 2 years to get relief. We are to vote on Jan. 29th on the changes but I have no idea what will happen.

[dex]

It might be an offshoot of the California law that started the capping of RE taxes.

[REWahoo]

Quote:

Originally Posted by 73ss454 You are right about Florida. I moved down last Dec., my property taxes are $8100 and my neighbor pays around $3800. We have the same house only he has a pool. He moved down 5 years ago though. I bought the house 4 years ago but couldn't homestead. We are wishing that the legislature did something about the problem 2 weeks ago. I can't seem to make heads or tails out of what they did though. Also the taxes in Fl. are a year behind so even if they make a change it would take 2 years to get relief. We are to vote on Jan. 29th on the changes but I have no idea what will happen.

Go ahead..move to Texas where everyone pays the higher rate...

[73ss454]

Hey, since I'm already paying the higher rate, Texas would be a wash for me. I just can't figure out what I'll do in Texas.

[REWahoo]

Quote:

Originally Posted by 73ss454 I just can't figure out what I'll do in Texas.

You can always start keeping score on the critter wars...

And don't worry, someone will be glad to translate for you. (Remember, in Texas you get three words for the price of one: all, oil and awl are pronounced exactly the same way!)

[outtarentals]

In the late 70's in California, homeowners had become so outraged at the crazy and unpredictable escalation of property taxes that some smart folks (Jarvis and Gann) put the matter before the voters and Proposition 13 was passed. It set the tax rate at around 1% of the appraised value of the property and could only be raised by about 2% of that amount each year. When a property changes hands, the rate goes to 1.2% of the sales price - sometimes it's higher - sometimes, as in this market when home prices might be falling, it can be lower. Even so, fees get tacked on to that 1.2% at every opportunity - street lighting bonds, rat control and mosquito eradication fees - you name it!!

At age 55, a homeowner can downsize and take a one time exclusion within certain counties in California and buy a house of a smaller value and transfer the lower tax rate to that house, but the number of reciprocating counties has dramatically decreased, so this break might not be around for much longer.

Prop 13 has been a godsend to homeowners. Now, at least we can predict what we'll be paying for property taxes. There have been attempts to take us back to the pre- prop 13 days where property taxes were raised indiscriminately, but so far we are managing to fend off the attacks. People cry Not Fair - and we can sympathize, but those of us who have stayed put in a house, though we might have liked to move up to a newer, fancier one, made our choice and probably deserve the break. The consolation for someone who is buying today, is that when values rise again, (as I've no doubt they will, barring some horrendous disaster) will be watching their neighbor complaining about the unfairness of the situation.

If you get mad enough maybe something similar would work in your area. It really galvanized us into action here - we stood on corners getting petitions signed for months. Course I was young and full of energy then - but I'm sure glad now that it passed.

[Moemg]

I live in Florida .Home to the bizarre property tax .Not only does no one want to move to a different house but if you add on you have released the tax appraisers and you'll see your taxes skyrocket. My neighbors taxes went from $2400 to $12000 after an addition .

[lazygood4nothinbum]

i specifically have done only cosmetic improvements &--outside of a roof, a/c & water heater early on--those improvements not needing permits (upgraded windows without changing window opening, etc.) so that this house would not be reappraised. i am taxed on only $47k worth of house. as i've been here a long time and would like to get out of south florida (too many ghosts), i was hoping hard for portability of "save our homes" homestead exemption but it looks like at best i will get only a super exemption so that i can buy a home half my current home's value and have my taxes only double instead of going up 5 or 6 times like they would under current law.

it is a shame that our legislature did not do more to help properties not homesteaded as that is a large part of the market here. i don't know what they are thinking other than collecting as much money as they can. even the new law seems to me nothing more than a sneaky way of ridding the state of "save our homes." i'll vote for it, but only because i don't plan to be here in 20 years. either way, i don't like it.

[kcowan]

I think RE property values will stagnate for many years.

[ricthemic]

Thanks to all for confirming our decision to rent and not buy in Florida.
Will buy on Cape Cod (two bedroom ranch, 1/4 acre, two miles to beach
90 minutes to Boston (go sox) property tax... $1,600.00 per year

[honobob]

Quote:

Originally Posted by kcowan I think RE property values will stagnate for many years.

When do you think this will start? Will it be for all property types? Will it be only for the flyover states or do you think it will be true for some of the costal states and perhaps even California?

[Danny]

Quote:

Originally Posted by outtarentals In the late 70's in California, homeowners had become so outraged at the crazy and unpredictable escalation of property taxes that some smart folks (Jarvis and Gann) put the matter before the voters and Proposition 13 was passed. It set the tax rate at around 1% of the appraised value of the property and could only be raised by about 2% of that amount each year. When a property changes hands, the rate goes to 1.2% of the sales price - sometimes it's higher - sometimes, as in this market when home prices might be falling, it can be lower. Even so, fees get tacked on to that 1.2% at every opportunity - street lighting bonds, rat control and mosquito eradication fees - you name it!! At age 55, a homeowner can downsize and take a one time exclusion within certain counties in California and buy a house of a smaller value and transfer the lower tax rate to that house, but the number of reciprocating counties has dramatically decreased, so this break might not be around for much longer. Prop 13 has been a godsend to homeowners. Now, at least we can predict what we'll be paying for property taxes. There have been attempts to take us back to the pre- prop 13 days where property taxes were raised indiscriminately, but so far we are managing to fend off the attacks. People cry Not Fair - and we can sympathize, but those of us who have stayed put in a house, though we might have liked to move up to a newer, fancier one, made our choice and probably deserve the break. The consolation for someone who is buying today, is that when values rise again, (as I've no doubt they will, barring some horrendous disaster) will be watching their neighbor complaining about the unfairness of the situation. If you get mad enough maybe something similar would work in your area. It really galvanized us into action here - we stood on corners getting petitions signed for months. Course I was young and full of energy then - but I'm sure glad now that it passed.

I don't mind paying taxes, I want the services and schools that I have here in Minnesota. One of the reasons I left California was the aftermath that occurred because of 13....The schools really suffered, libraries curtailed hours and roads went down hill, etc. Prop 13 has basically starved Cal's services. I pay 1% of assessed value, and assessed value gets revalued every year. For those in the middle class they can get property tax refunds based on income level. It is a bizarre system where people living in a $1 million dollar house are paying $1600 in property taxes, just because they have lived there for 30 years and next door someone is paying $12,000

[honobob]

Quote:

Originally Posted by DanTien It is a bizarre system where people living in a $1 million dollar house are paying $1600 in property taxes, just because they have lived there for 30 years and next door someone is paying $12,000

But that person has contributed to the community for 30 years. Probably has been partly the reason the housing values are now $1,000,000. The main problem with Prop 13 is that it includes every business property and not owner occupied residential property that sells or rents at todays market values.

[Retire Soon]

Real estate and stocks historically revert to the mean after a huge run up in prices. There is a very high probability that housing prices will continue to decline and then level off and stop climbing for many years. Obviously, some areas will be hit harder than others, but all will suffer. Whenever you hear people say, "It's different this time," watch out!

[Danny]

Quote:

Originally Posted by honobob But that person has contributed to the community for 30 years. Probably has been partly the reason the housing values are now $1,000,000. The main problem with Prop 13 is that it includes every business property and not owner occupied residential property that sells or rents at todays market values.

...could be the people paying $12,000 had been in the same town but in a smaller home or have been renting, or have downsized to a million dollar home...it's not a fair system

[novaman]

Quote:

Originally Posted by honobob But that person has contributed to the community for 30 years. Probably has been partly the reason the housing values are now $1,000,000. The main problem with Prop 13 is that it includes every business property and not owner occupied residential property that sells or rents at todays market values.

That often used statement just doesn't wash. Sure that person has been contributing to the community, but the schools, teachers, libraries, roads, police, fire dept. etc. are all expenses that are incurred at TODAY"S dollars, not 1970's.

Using that logic, Maybe I could pay 1970's prices on my car, since I've contributed to the Ford motor company all these years

[honobob]

Quote:

Originally Posted by novaman That often used statement just doesn't wash. Sure that person has been contributing to the community, but the schools, teachers, libraries, roads, police, fire dept. etc. are all expenses that are incurred at TODAY"S dollars, not 1970's. Using that logic, Maybe I could pay 1970's prices on my car, since I've contributed to the Ford motor company all these years

Your statement is not true and seems to be based on your lack of knowlege of Prop 13. Prop 13 values are based on the market value in the year (my prop 8 value is based in 1986) of a change in ownership or new construction and Increased every year by up to 2%. When the law was enacted in 1978 values used were the 1975 roll values. Now if you want increase the pay for teachers/police/librarians by 9% every year then you have a point.

Remember, everyone is predicting a 50% drop in market values. Will you call for a 50% decrease in their wages?

[outtarentals]

Quote from honobob:
(The main problem with Prop 13 is that it includes every business property and not owner occupied residential property that sells or rents at todays market values)

I have often thought it was a mistake to apply Prop 13 to business property that rarely changes hands.

It's important to remember that without prop 13, many elderly homeowners in California would have to sell their homes because they couldn't afford their property taxes. It was already happening in the late 70's when we worked so hard to get this proposition on the ballot. At that time, my 80 year old, widowed neighbor had to sell her home - that's what made me decide to get involved in the battle way back then.

I've often heard people say that schools suffer because of Prop 13, but to my mind, no matter how much money we pour into schools - it will NEVER BE ENOUGH - certainly in California. The money schools get is not always spent wisely. That has been well documented - and dare I say it? - undocumented? The percentage of our tax money going to schools is much more than half of the pie and at every election we are asked to pass more school bonds - and they usually do pass.

So, how can we plan for retirement when property taxes escalate every year? Also, it doesn't necessarily follow that anyone's property taxes would be lowered just because their elderly neighbor's is raised each year. Without Prop 13, everyone's property taxes in California might be even higher than they are now. At least now we all know what to budget for........

[mb]

Quote:

Originally Posted by DanTien I don't mind paying taxes, I want the services and schools that I have here in Minnesota. One of the reasons I left California was the aftermath that occurred because of 13....The schools really suffered, libraries curtailed hours and roads went down hill, etc. Prop 13 has basically starved Cal's services. I pay 1% of assessed value, and assessed value gets revalued every year. For those in the middle class they can get property tax refunds based on income level. It is a bizarre system where people living in a $1 million dollar house are paying $1600 in property taxes, just because they have lived there for 30 years and next door someone is paying $12,000

Strongly agree with Dan.

I think that Prop13 was one of the worst pieces of legislation in CA history.

CA had one of the best school systems in the nation before Prop13. Prop13 gutted it as well as many other social services. Schools are still very good in the more affluent areas but overall by most measures CA now rates as one of the 10 worst states in the nation

It is unjust that the neighbor on the left pays 1/3 my prop taxes but I pay only 1/3 of the prop taxes as the neighbor on the right.

I already pay a CA housing premium so that I can live in a place without snow and ice in the winter or heat, humidity and mosquitos as large as small planes in the summer and so that I can eat sushi rather than that awfull sounding scandinavian fish stuff that all of the Minnesotans are always talking about but I would gladly pay more taxes to have public schools and other services like those in MN (and my kids are in private schools).

MB