Oh boy.
Take me down the path. How does your mind work on this one.
Oh boy.
Take me down the path. How does your mind work on this one.
These very restrictive zoning requirements create build able and density of the building problem This has distorted the markets and created land scarcity.
In addition, I think the California property taxes have also contributed to the problems. They only reassess properties when they SELL. Otherwise its limited to 2% MAX increase each year. Therefore, those who have owned homes since the law was enacted (70's or 80's I believe) they are vastly underpaying property taxes. The assessed values are going to be far less than market values. So you've created a large incentive for these people to not SELL their homes and therefore exacerbates the scarcity of supply.
I don't get where all of the money comes from sometimes. New buyers in my neighborhood all seem to be 30/40 somethings with kids and garages full of high end luxury cars. My neighborhood (just a block outside of Mpls west boundary) is crazy eclectic with $1M plus homes to $250K homes with the average being $500k or so (I guess). The ones that move the slowest are the ones priced out at $400k or so, usually overpriced junk that sit until the agent convinces the owners that, "No, your house is not worth your asking price." Stuff between $200 - 300K get snatched up as teardowns by developers. Really nice ones in the $600-800K range sell in a matter of days, sometimes for more than asking. It's just wild real estate market here right now, seeing a little bit of everything from slow sells to bidding wars.
And, just so I don't feel left out, my tax appraisal just jumped by $52K for next year.![]()
Appearance of being wealthy =/= actual wealth in most cases. It’s a status thing for a lot of people though.
Appearance of being wealthy =/= actual wealth in most cases. It’s a status thing for a lot of people though.
I agree that Prop 13 has made it too expensive for some to move within the SoCal market. A reset of your property tax could double or triple what you would currently be paying.
As a prior CA homeowner I loved it. My home wasn't treated as a slush fund for the government (looking at you, Illinois) and it brought greater payment certainty.
I agree that the idea was decent at the time. But they didn't really understand and think about the long-term effects. Or maybe they did and understood their property values would likely soar and keep their taxes low. I think capping the taxes one pays to a MAX % of the value (I would say 2% at the highest) would be better than the Max % increase each year.
An 800K burned down, fixer-upper for anyone interested:
Read more here: http://www.sacbee.com/news/state/california/article208596279.html#storylink=cpy
The property tax market in Chicago is anything but flat...so says my brother who complains about the constant rise in taxes there.My much bigger home in Chicago was much much cheaper than the condo I sold in California.
Location. Supply. Demand. Access to financing.
Watch loan default rates. Right now loans are still performing. I've seen some choppiness in performance, but it doesn't seem to be a red flag yet.
If that canary in the coal mine dies.....
If you want to go where homes don't appreciate then move to Chicago. The real estate market here is still pretty flat
Appearance of being wealthy =/= actual wealth in most cases. It’s a status thing for a lot of people though.
This is what I don't understand. Our house is under 200k and we fully find Roth IRAs, put money into a college fund, and still have money left over for his/hers strippers. What is the point of owning a gigantic home if you can't satisfy the other Financial requirements in your life?
This is what I don't understand. Our house is under 200k and we fully find Roth IRAs, put money into a college fund, and still have money left over for his/hers strippers. What is the point of owning a gigantic home if you can't satisfy the other Financial requirements in your life?
I'm always shocked at the level of borrowing I am eligible based on my one income. It's kind of the root of the problem.
If I could buy a big house for less money, I would.