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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (12439)	8/16/2003 1:24:47 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

>>In California where prop 13 has had 26 years to work it's "magic", one has to shudder at the fall-out of eliminating such a prop-up mechanism. How they would ever get this passed in California remains to be seen. << perhaps we could look to the 1986 RE reform act and how it adversely effected commercial real estate values.. while the situation with residential RE in CA isn't quite analogous, what remains constant is the imbalances that occur when taxes are used to stimulate or otherwise manipulate markets. to be sure there was overbuilding in commercial RE prior to the 1986 creating oversupply (as investors looked for tax shelters) and as the rug was pulled out from under those investors by the tax reform, those markets were adversely affected significantly one can only imagine what would happen to CA property values if a sudden glut of housing came on the market due to tax selling. no easy way out that i can see. if prop 13 is repealed, it would basically be a retroactive tax increase here's an article i found googling on how the 1986 RE tax reform played out... libertyissues.com