Mr Housing Bubble

[lazygood4nothinbum]

Down $700 here (homesteaded, too). Should help with the high insurance premium.

I once added them all up and compared it to other states which have state income tax. Florida come out pretty well if you count that in, and why not - it's all fixed, real cost of living wherever you are.

just got my first tax bill on the inherited house $17+k. ouch. they've got it appraised at $950k. nearly identical house on identical lot three houses down sold for $1.35 just after the turndown. i don't see us getting $950k today. not even a low ball offer in 6 months. currently petitioning county to re-appraise us at $750 but i'd settle for $850 to at least knock off $2k from taxes.

once i dump that house and then eventually mine i think i will never own real estate again.

 

[Sandy]

Since the Floridians are chiming on property taxes: mine are down a whopping $200.

Now, since much of school is funded with property taxes, I expect that my "savings" won't last long. It has only been 1 week, but I have already sent in $60 for required planners, PE shirts, and lab fees.

 

[Lakedog]

Well, my property tax actually went up over 80% this year....part of that due to increase in tax rate but mostly due to assessed value increasing just over 50%. I just came from a meeting with the board of equalization (to appeal the increase in assessed value). I do live on a large lake in central Alabama about 2 hours from Atlanta but an increase in property value of 50% is a little steep......

 

[Moemg]

Down $700 here (homesteaded, too). Should help with the high insurance premium.

I once added them all up and compared it to other states which have state income tax. Florida come out pretty well if you count that in, and why not - it's all fixed, real cost of living wherever you are.

Rich,
Just curious ,did your appraisal go up ? Mine went up $100,000 .If I could get that much I'd be leaving tomorow .

 

[lazygood4nothinbum]

what is a house worth if there are no buyers? how is such a thing valued for, say, tax purposes?

when people talk (guess) about the "market coming back" in mid 2008, what is meant by "coming back"? i assume this does not mean that prices will suddenly spring up again. does this mean simply that people might start to buy again?

if the bubble pop lost 30% of supposed value, assuming a bottom, how long would it take to regain that value if the market ever came back again? five years, 10 years, never?

 

[73ss454]

For tax purposes I would think they use comp's in the area that have sold.

 

[clifp]

For tax purposes I would think they use comp's in the area that have sold.

How come it isn't ok for financial type value to assets like bonds using a Mark to Model scheme, but it is ok for county appraiser to do the same thing for property taxes.

Is there a difference I am missing?

 

[73ss454]

clifp, what's going on in Florida is something that no one can explain. The county appraiser's here have a license to to rob the public. It's so screwed up that I don't know if it will ever be corrected. The folk's in my neighborhood all received their property statements this week and everyone is all over the place with taxes. Some went down and some went up and no one knows what to make of it.

Next year there will be a vote on Jan 29 to make it a even playing field but most folks don't understand it and I don't know if it will pass. If it passes you'll have to make a choice to keep the save our homes option or take a super exemption. In my case I would opt for the super exemption because I just homesteaded this year and my taxes are very high. Folks who are in their homes for lets say 4 years or more would most likely chose to keep the save our homes option. Very confusing but something has to be done.

 

[lazygood4nothinbum]

didn't florida pass this last year?

Proposes an amendment to Section 5 of Article XI of the State Constitution to require that any proposed amendment to or revision of the State Constitution, whether proposed by the Legislature, by initiative, or by any other method, must be approved by at least 60 percent of the voters of the state voting on the measure, rather than by a simple majority. This proposed amendment would not change the current requirement that a proposed constitutional amendment imposing a new state tax or fee be approved by at least 2/3 of the voters of the state voting in the election in which such an amendment is considered.

if so than the january 2008 homestead changes might not get the votes, don't even know if it would get a slim majority.

this was nothing more than an opportunity for chuck crist to beat his chest. it does nothing for second homeowners, does nothing for out of state owners, does nothing for commercial property, does practically nothing for houses valued at over $500k. all it does is possibly help some folks (for a limited amount of time) who timed their purchases with the height of the bubble.

in reality, this was just a lame way to get around portability of save our homes which the citizens wanted and for which i am certain they would have voted (that and some help for the others who are so heavily taxed). under superhomestead, if someone downsizes under that $300k mark like to $150k (lots for sale in that market, huh?) they get some small help for just a few years. it screws absolutely everyone who plans to stay in their house more than 20 years if they do not already have save our homes.

because i could buy a cheapo $150k 1/1 condo on or near beach down the line if i choose while only having my taxes double and because i'm not planning to stick around another 20 years, i will vote for it but i don't like it one bit.

 

[73ss454]

I don't see why anyone wouldn't vote for it. The folks with SOH's will still get to keep it and the newbies will take the super exemption. It doesn't really hurt anyone, at least not yet. One thing is for sure about taxes, we will always have to pay them. I would just like to see everyone pay their fair share. The taxes in Florida must be adjusted but we will see what happens.

The vote is next Jan 29th.

 

[AltaRed]

when people talk (guess) about the "market coming back" in mid 2008, what is meant by "coming back"? i assume this does not mean that prices will suddenly spring up again. does this mean simply that people might start to buy again?

if the bubble pop lost 30% of supposed value, assuming a bottom, how long would it take to regain that value if the market ever came back again? five years, 10 years, never?

It "depends". Depends on how fast the prices appreciated to the top, how far they overshot 'affordability', what the local/regional economy is like, etc. Data shows that prices in Canada's 2 largest cities (Toronto and Vancouver) took over 10 years to recover from late '80s/early 90's bubbles.

I suspect the impacts will be quite regionalized in the USA although the chart on CNN Money today (28th) on percentage of subprime mortgages state by state are surprisingly spread out across the nation.

 

[W2R]

It "depends". Depends on how fast the prices appreciated to the top, how far they overshot 'affordability', what the local/regional economy is like, etc. Data shows that prices in Canada's 2 largest cities (Toronto and Vancouver) took over 10 years to recover from late '80s/early 90's bubbles.

I suspect the impacts will be quite regionalized in the USA although the chart on CNN Money today (28th) on percentage of subprime mortgages state by state are surprisingly spread out across the nation.

Somehow I can't help but think that this whole housing crunch is artificial. If subprime mortgages are spread out across the nation, why are the effects of this crunch on the housing market so regionalized? Somebody is making money off of this, though I am not sure who or how.

 

[Eyerishgold]

Hooray! Wipes the equity right away.

 

[AltaRed]

It is regionalized because the size of the problem is most acute in those areas that had rapid price escalation. Both the number and size of the subprime mortgages contribute to the scale and degree of delinquency and hence foreclosures.

Who made money? How about all the commissioned salespeople writing mortgages, and executives with bonuses who got compensated on the value of mortgages written? You may, or may not, wish to believe this story.....

http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?pagewanted=print

 

[Moemg]

The tax situation in Florida is so confusing .I am homesteaded and bought before the prices rose so my taxes are $5,000 on a $800,000 house .If I elect to stay with the save our homes benefit it's fine as long as I stay in this house .The problem is I'm thinking about selling and buying a less expensive house but my taxes would be the same unless I had the super exemption .So how are they going to handle issues like these . As Lazy says the
save our homes portability would have passed but this is just too confusing .

 

[lazygood4nothinbum]

moemg. i have an excel speadsheeted calculator differentiating save our homes and superhomestead but i do not see how to attach to this reply nor to a private memo to you. if you like please private me with your email address and i will forward calculator to you.

i forget which county appraiser's office i swiped it from so might not be completely relevant to you but will give you good clarification of the difference between soh & superhomestead.

 

[lazygood4nothinbum]

It "depends". Depends on how fast the prices appreciated to the top, how far they overshot 'affordability', what the local/regional economy is like, etc. Data shows that prices in Canada's 2 largest cities (Toronto and Vancouver) took over 10 years to recover from late '80s/early 90's bubbles.

I suspect the impacts will be quite regionalized in the USA although the chart on CNN Money today (28th) on percentage of subprime mortgages state by state are surprisingly spread out across the nation.

thanx, but i was really hoping someone would look into their crystal ball and tell me whether to sell the inherited house or try to hold on for a few years. the regional thing is so difficult especially here in florida. it seemed before the bubble became apparent that florida population was exploding and so i had thought that was the reason for our price increases. but then the bubble, and then our taxes, and then our insurance rates. the inherited property is absolutely prime (walk to beach & dock your boat), and in the past i would have considered it a solid investment but now i just don't know. and based on how much it has dropped (easily 30%) i am no longer convinced that it is so good to wait for things to improve.

 

[twaddle]

I wouldn't bet on a recovery within a year or two. Housing busts are tightly correlated with recessions. Normally, the recession causes the housing bust. But in this case, the bust may be large enough and widespread enough to cause a recession. If it does, don't expect housing to recover until the economy recovers.

 

[Brat]

Because the terms of many subprime were onerous and they were bundled with conformable contracts no one knows the real value of those bundles, thus they are a problem to re-sell in the market and from what I hear investors are walking away from almost all real estate mortgage contracts. This is a fear driven market which may echo through the economy.

 

[twaddle]

Personally, I think the subprime-backed paper fiasco is overblown. It may blow up a few more hedge funds (I think one in London blew today), but shouldn't affect the economy. The thing to watch, IMO, is consumer spending and the reverse of the wealth effect.

 

[Moemg]

I have one other Question for Florida residents .If we chose save our houses or the superhomestead are you locked into that choice forever ??Say you move are you locked into the save our houses when at that point the superhomestead would be better ?

 

[brewer12345]

Personally, I think the subprime-backed paper fiasco is overblown. It may blow up a few more hedge funds (I think one in London blew today), but shouldn't affect the economy. The thing to watch, IMO, is consumer spending and the reverse of the wealth effect.

If it were confined to subprime, I would agree. But its not. Its tough and expensive to get any mortgage that doesn't fit in the conforming box. Car loan rates have gone up. Credit card terms have gotten tighter (so much for stoozing). Even commercial mortgages are tough to come by now.

 

[73ss454]

The tax situation in Florida is so confusing .I am homesteaded and bought before the prices rose so my taxes are $5,000 on a $800,000 house .If I elect to stay with the save our homes benefit it's fine as long as I stay in this house .The problem is I'm thinking about selling and buying a less expensive house but my taxes would be the same unless I had the super exemption .So how are they going to handle issues like these . As Lazy says the
save our homes portability would have passed but this is just too confusing .

I just homesteaded this year and my taxes are $7100 this year with an appraised value of $308K go figure.

 

[Moemg]

I just homesteaded this year and my taxes are $7100 this year with an appraised value of $308K go figure.

My taxes are $5,000 because my purchase price was $350,000 .I bought before the market went nuts and I also had a very very motivated seller.

 

[Brat]

Copied from RedFin today:

Hoping to Borrow More than $417,000? Good Luck!


In Seattle the median price for a single family home is $481,000 so unless you can put about 13% down you’ll need a jumbo loan (which is any loan over $417,000). Well the fallout from the sub-prime lending debacle is affecting some lender’s ability to provide jumbo loans even to well qualified buyers. Elizabeth Rhodes reported this weekend on a Seattle area couple who’s loan disappeared the night before closing on their new home because the mortgage broker had suddenly lost the ability to provide jumbos.

The evening before their home purchase was to close, ..... ......, learned their mortgage to buy a Woodinville home had evaporated.​

Unlike subprime borrowers defaulting on loans, the couple had a stellar credit score, a 20 percent down payment, strong employment history and had effortlessly purchased three prior homes.​

But their new home’s $670,000 sales price was large enough to require a “jumbo” loan, so named because it was for more than $417,000, the limit the nation’s largest mortgage backers will fund.​

Their California mortgage broker had unexpectedly lost its ability to provide jumbos — an event being repeated by lenders nationwide as the underlying funding for these large loans grows scarcer.​

If it’s going to be hard for people in Seattle to get jumbo loans, microeconomics will tell you that as demand decreases so will home prices.