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

To: Tommaso who wrote (34795)	7/2/2005 6:37:16 PM
From: Maurice H. Norcott	Respond to of 306849

>>The repo game will be more complex than sending out a wrecker at 3 a.m.<< Speaking of which, myself living in Silicon Valley, everyone from your teenager to average adult seems to have the attitude that a BMW, Mercedes, Lexus, or Porche is an absolute necessity. Today I saw young girl at my gym driving a SL 500 Mercedes. I looked it up when I got home, $95K ! Should I assume these cars are mostly leases or can I look forward to picking up a nice car in the future for cheap ?

To: Tommaso who wrote (34795)	7/2/2005 7:37:26 PM
From: schzammm	Read Replies (1) \| Respond to of 306849

Homeowners Deal With Rising Property Taxes Saturday July 2, 7:04 pm ET By John Pain, AP Business Writer Homeowners Grappling With Side Effect of Real-Estate Boom: Sharply Rising Property Taxes MIAMI (AP) -- As home prices skyrocket, property taxes are also going up, especially in hot markets like Florida, California and the Northeast. "Young families simply can't afford to live here. It's very difficult for police officers, firefighters, teachers and nurses," said Lori Parrish, the property appraiser in nearby Broward County, who has pushed for more property tax breaks. ADVERTISEMENT Teri Vasarhelyi and her husband thought they would be able to afford a bigger house with more land two years ago when they left San Francisco, the most expensive home market in the country. They figured they found a good deal in a two-bedroom house in the peaceful, leafy Coconut Grove area for $440,000 in March 2004. But the shock came when their first property tax bill came a few months later -- more than $9,200 a year, nearly double what they paid in their old home. "That's an awful lot of money, on top of your mortgage, to find that cash," said Vasarhelyi, 35, who's taking time off from her advertising career to raise their baby. Many people are running into similar problems, a side effect of the real estate boom. First-time home buyers are especially running into trouble as wages adjusted for inflation haven't kept pace with real estate prices, and elderly residents on fixed incomes who have lived in their homes for decades are also struggling to pay ever-increasing taxes. The national average annual property tax collection was $971 per person in 2002-2003, up 18 percent from $822 five years earlier, according to the latest figures available from the Tax Foundation, a research organization in Washington. The median home price nationwide rose to $170,000 in 2003 from $128,400 in 1998, according to the National Association of Realtors. The most expensive states for property taxes were in the Northeast, with New Jersey topping out at $1,872 per person in 2002-2003. The cheapest state was Alabama at $329 per person. While rising property taxes in theory should slow down the real estate market, that hasn't happened for two key reasons: "The popular belief that real estate is the best investment and the American willingness to spend a remarkably high fraction of their disposable income on housing," said foundation spokesman Bill Ahern. Governments are still sensitive to complaints from homeowners. At least 48 states have tried to give homeowners relief from rising property taxes, according to the National Conference of State Legislatures. The methods include tax freezes, restricting property taxes to a percentage of the home's market value and caps on how much a home's assessed value can increase. Many states are considering expanding property tax relief. But local governments are also wary of cutting back on what they collect -- they get more than 95 percent of all property taxes. Altogether, American businesses and home-owners paid $296.7 billion in property taxes in 2002-2003, up from $279.1 billion in 2001-2002, according to the latest data from the U.S. Census Bureau. Those numbers likely climbed even faster recently along with record-high home prices. Property taxes pay for everything from schools and roads to police and fire departments. While they usually are collected by local governments, states generally write the laws that govern them. "States are interested in keeping property taxes manageable at the same time they're balancing the delivery of public services demanded by citizens," said Bert Waisanen, fiscal analyst with the National Conference of State Legislatures. Property tax relief varies widely from state to state, and even within them. A 2002 report by the legislative conference said that states are walking a tightrope to ensure that tax burdens are fair. "(T)he relief provided to some may come at the expense of others," the report said. California was a pioneer in easing the burden of property taxes. In 1978, voters there passed Proposition 13, which capped the increase in a home's taxable value at 2 percent a year until it is sold. It also limits a homeowners property tax to 1 percent of market value. Many other states followed with similar breaks, even though California's recurring budget crisis has been partly blamed on the initiative. Forty-eight states also give home-owners a homestead exemption or credit, which allows them to deduct a certain amount from their home's taxable value. But those rules aren't enough to keep taxes level. It is also becoming more difficult for people to move because they usually lose out on property tax breaks when they do. For example, the previous owner of Vasarhelyi's house paid less because the increases in assessed values are capped in Florida at a maximum of 3 percent a year. But once the house is sold, that limit is lifted.