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Old 01-23-2009, 10:07 AM   #21
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My, my, so upset.
Not upset, just amazed when people ignore the basics of supply/demand, or twist it to their own view.

The context of our comments was that when the office could not staff up quickly enough to meet demand for their product, they raised the price in order to limit demand, and also maximize their profits. Basic Supply/Demand. If the customers walk away, they will lower their prices until supply/demand reach equilibrium.

It's what we all do, and for a good reason. I don't see any more reason to refer to the buyers as being "lemmings" any more than I would accuse someone of being a "Lemming" because they inhale and exhale, just like all the other "lemmings".

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But I'm with you. Charge what you can while you can. What the heck, that didn't hurt us befire did it??
Well I asked - what is the alternative? Can you name one with fewer or less severe negative consequences?

And let's not forget (though I won't follow up on this since the soapbox is closed), the mortgage markets were artificially influenced by government actions to make loans more "affordable" to more people. There were consequences to that.

But it's really separate from the simple issue of an office deciding to raise prices because they can't meet demand. That's basic supply/demand, regardless the product. And the customer can go elsewhere if they don't like it.

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Old 01-23-2009, 10:11 AM   #22
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Originally Posted by ERD50 View Post
Kinda tenuous at best. Most of it relates to sales tax. What I questioned in your post was the statement that *property* tax flow/ebb with home prices, and that it is a State level problem. I would also think HIGHER house prices would leave LESS money to be spent on furnishings, etc.

I'd be curious to see a list of States that levy a property tax, and of those, which are based on the absolute value of the property rather than the relative value (like my County).

-ERD50
From the previous article: The stalled housing market is pinching states across the board, but more severely for states such as Arizona, California, Nevada and Florida that rely heavily on real estate taxes.
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Property tax defined
Property tax is a tax that is based on a property’s value. It is sometimes called an “ad valorem”
tax, which means “according to value.”
The property tax is a local tax imposed by local government taxing districts (e.g., school districts,
municipalities, counties) and administered by local officials (e.g. township assessors, chief county
assessment officers, local boards of review, county collectors). Property taxes are collected and
spent at the local level.
http://www.revenue.state.il.us/publi...t/PTAX1004.pdf
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Old 01-23-2009, 10:15 AM   #23
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which means “according to value.”
Which means lower value = lower revenue = states budgets have to be cut.

When means less services, layoffs, hiring and pay freezes. Which in turns means, lower revenue because the tax base is smaller.

Which means reinflating housing is the easy way out.

When means if housing keeps falling states will want to feed at the federal bailout fountain.
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Old 01-23-2009, 10:32 AM   #24
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I see nothing wrong with lower housing prices. The intervention to prop up housing prices borders on immoral. The reason the U.S. government is trying to reinflate housing prices is state governments have crafted their budgets with ever rising property taxes.
.
Who really knows what runs through the minds of our leaders, but a reasonable reflation of housing prices would be beneficial far beyond enriching the states.
A leveling or reflation of prices would no doubt open the flood gates of willing buyers. Nobody wants to buy a house unless they think it will rise in value or at least maintain. All those new homes need furniture and more, creating additional jobs which leads to more home buyers. Yes, more revenue will flow to the states which allows them to hire more pothole fillers who in turn can buy a house.
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Old 01-23-2009, 10:32 AM   #25
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Originally Posted by Gpond
which means “according to value.”
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Originally Posted by Gpond View Post
Which means lower value = lower revenue = states budgets have to be cut.
Not necessarily. And actually not true in my case (as I described).

Just because the Latin derivative is “ad valorem”
tax, which means “according to value.” ,
you must consider that there are various ways to implement that. In my case, the value of my house is a consideration, so "according to value" is technically correct. But it is not an absolute connection. A 10% increase in my home value does not automatically mean a 10% increase in my taxes. But if my house is assessed 10% higher than next door, my taxes will be 10% more than theirs.

So "lower value = lower revenue = states budgets have to be cut." does not hold in all cases.

What part of my earlier explanation did you not understand?

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If the house next door is assessed at 2X mine, he pays 2X the tax. But (outside of other legislated increases), if all the houses in the district increase or decrease in value by 50%, no taxes would change.
You also didn't bother to quote another line from your source:

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Illinois does not have a state property tax
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Old 01-23-2009, 11:02 AM   #26
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The city of Salinas is facing some drastic budget challenges in the coming year due to a drop in property taxes due to the faltering housing market.
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Old 01-23-2009, 03:08 PM   #27
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Gpond, you are missing my point.

I'm not saying that there are no States/communities that set a property tax tied directly to the price of the home. Examples to the contrary are just data points, not proof of anything.

What I'm saying is, there are some States w/o a property tax, and some communities where the property tax is not directly related to the assessed value, but rather it fits into a formula. The formula *distributes* the tax burden based on assessments such that overall value changes do not change the amount of tax collected (my County is one of those).

I don't know the breakdown between the two (or more?) methods. W/o that, you are painting with too broad a brush.

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Old 01-23-2009, 04:52 PM   #28
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The budget is set and then the millage is set by the amount to provide the necessary funds from the tax base (be it RE (residential and/or commercial) or any other "base(es)". However IMO what is getting pretty expensive is how "School and other Levies" are tacked onto the RE tax bills even in states with an Income Tax. I know they are approved by the voting taxpayers (which can be approved by a very small number of actual voters due to voter apathy; sometimes less than 10% of the total registered voters can approve these things). And with school levies they always shroud it in the "its for the children" mode when it should be shrouded correctly as being for the "teachers" since the vast majority of these increases go to salaries and to fund retirement plans. Here fully 89% of the last levy went to "Teachers" salaries and their retirement plans.
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Old 01-23-2009, 08:13 PM   #29
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Well, the thing is, when assessments rise by 10%, many municipalities don't lower the tax rate so that their "take" matches inflation plus population growth. If the tax rate were routinely set this way, you wouldn't see some of the "tax revolts" that can occur when assessments are rising beyond typical wage growth.

What's funny -- well, not "ha ha" funny -- is that assessments may rise 10% and then the city or school district cuts the tax *rate* by 1% and claims to "cut taxes" even though you're paying 8.9% more in city and/or school taxes than the year before.
I can't speak for any other states other than the one I am in (New England-NH), but here they cannot do what you postulate, e.g., tack a little on for a profit. I'll bet if you look in your town annual report you will find a page that does the arithmetic that I set forth: Total budgeted spending for the coming year divided by the aggregate assessed value = tax rate for coming year. So, if the municipal spending never changes then the assessed valuation and tax rate can go up or down but your total tax bill stays the same. Of course if the relative value of the house changes you could pay more or less than your neighbor.
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Old 01-26-2009, 04:03 PM   #30
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The banks I've been watching have raised their 30 year fixed by about .25 to .50 this week.
Anyone else noticing this?
Coincidently, I applied for a refinance loan thru a broker just before Christmas. I got a 30 day lock at 4.375%, 30 year fixed, which would allow me to have $600 more a month pocket money. I know my loan was sent to a lender. The lender sent me some disclosure documents, a loan number, some credit scores, (high 700's,) but also stipulated the documents did not constitute a comitment on the loan. Coming up this week on the 30 day lock period end, but no word as yet.
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Old 01-26-2009, 06:52 PM   #31
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Total budgeted spending for the coming year divided by the aggregate assessed value = tax rate for coming year.
Yep, I live in NH too and this is how its done. My tax bill for the second half of the year just went up $500! Our town had two floods in two years and a tornado! So, they gotta fix the roads etc.
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Old 01-26-2009, 09:52 PM   #32
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Nice avatar, Elderdude. First HeeHaw character I've seen on the forum!
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Old 01-27-2009, 11:50 AM   #33
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I resemble that remark, Harley. The picture was taken in Hungary at a jazz performance. Actually, our band was booked as a comedy jazz band. We played 20's music - politically correct labeled "Traditional Jazz."

I heard from my mortgage broker today that the lender is swamped and had extended the lock for another 15 days. There is still hope.
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Old 01-28-2009, 04:07 PM   #34
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I resemble that remark, Harley. The picture was taken in Hungary at a jazz performance. Actually, our band was booked as a comedy jazz band. We played 20's music - politically correct labeled "Traditional Jazz."

I heard from my mortgage broker today that the lender is swamped and had extended the lock for another 15 days. There is still hope.
Sorry, dude! I'd have sworn that was Grandpa Jones from Hee Haw.
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Old 01-28-2009, 04:30 PM   #35
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Sorry, dude! I'd have sworn that was Grandpa Jones from Hee Haw.

You are not the only one!

In fact, Elderdude looks more like how I remember Grandpa Jones looking than Grandpa Jones does!

Deep announcer voice: "Will the REAL Grandpa Jones please stand up."

-ERD50
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Old 01-28-2009, 04:30 PM   #36
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Sorry to re-hijack this thread back to a rate discussion, but I just locked in a 4.75 rate at Wells Fargo with no points for 30 years. How 'bout that?
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Old 01-28-2009, 04:33 PM   #37
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Dagnabit! I was shooting for the Charlie Weaver look.

Just saw a copy of the appraisal for my home. Apparently we've lost a quarter of a million dollars in home value since we last checked it. Oh well, easy come, easy go.
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