Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jim McMannis who wrote (12792)	8/20/2003 11:59:37 PM
From: John Chen	Respond to of 306849

Jim,re:"Ca..RE prices". I don't understand why people in Ca. are not willing to 'unleash/unlock' the money now tied down in RE to help themselves. I guess the: 'not with my money, you don't' reality set in here. As a 'system', Ca. has no problem, just the money are "tied down" in the RE. There is really no budget problem, just the imbalance of it.

To: Jim McMannis who wrote (12792)	8/21/2003 12:13:17 AM
From: GraceZ	Read Replies (1) \| Respond to of 306849

CA properties change hands as frequently as other high demand areas and a lot more frequently than properties in some other states with lower real estate price inflation. One could say more frequently because of the price inflation. We have similar tax measures here and a far lower rate of real estate inflation (although real estate price inflation is quite high in areas close to DC). I didn't realize it until I started asking people about their property tax bills. Your assessment is reset by the sales price and there is a limitation on how much you can be reassessed yearly unless you make significant improvements. The limitation is right around the same rate it is limited in CA but it started at a much lower level to begin with. My taxes went from 1750 to 2200 in ten years, a 25% rise, while the sale price I could get for the house almost doubled. Interestingly enough, the houses I own in the city had property tax increases at around the same rate even when the houses were losing value. At one point in the 90s my old neighborhood association went to tax court and got the whole neighborhood assessed lower. That was a first, a property tax bill that was lower.

To: Jim McMannis who wrote (12792)	8/21/2003 2:35:45 PM
From: gpowell	Respond to of 306849

WHen selling resets your taxes, people don't sell. Nonsense. A tax increase, assuming you buy another property, is but one consideration - and not a big one for the majority of people. Consider that most people move every 5 years, so the chance that their tax burden will increase significantly is remote. Not one person I know ever decided not to sell because of prop 13. This reduces inventory and helps increase prices. This was Grace's argument months ago, and is a definite possibility assuming people base their decisions mainly on tax avoidance. And of course it is only a factor if prices are increasing, especially so if prices are increasing because of inflation. In that case there is no financial benefit to selling – all other factors being equal. On the other hand, if prices are increasing due to real asset appreciation, as in the case in SV, then selling may have advantages depending upon the seller’s situation. You didn’t mention it, but a reduction in inventory is possible if local governments zone for retail commercial over residential real estate in order to increase tax receipts.