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

To: GraceZ who wrote (43756)	10/27/2005 10:03:36 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 306849

They say, this is what I can pay a month so if I have to pay more in taxes every month, then I have to buy a cheaper house. This effectively takes them out of the pool of buyers for the comparable house at the same price with higher taxes. This puts downward pressure on price. what you're forgetting about is the very large number of people in Clownifornia with low basis on their existing home and hence low taxes. such as somebody with a 2 million-dollar house paying a grand or two in property tax. if this person moves down the street (or even downsizes to a million-dollar house), they will face a significant stepup in basis and therefore taxes. so there is a lot of property withheld from the market, and this puts upward pressure on prices.

To: GraceZ who wrote (43756)	10/27/2005 11:28:11 PM
From: Live2Sail	Read Replies (2) \| Respond to of 306849

First of all, we were talking about the "Lock-in" effect or the "Tax on moving." This effect does not affect first-time homebuyers. Do you agree or disagree that the prop. 13 provides an incentive to stay put? You aren't thinking about this the way a buyer thinks about it. Quite the contrary, Grace, it is you who is not thinking about it from the buyer's perspective. How do I know that I am thinking about it the way a buyer thinks about it? Because I have thought about buying a house around here for a while. Every year that I do not buy a house is a year that I do not enjoy the benefits of Prop. 13. As long as house prices rise faster than 2% (which has been the case for 90% of the time since P13 inception), I am on the losing end of not buying. This is an incentive to buy sooner (and pay up) rather than later. I know you keep coming back to the NIMBY, zoning, etc., and I agree with all of those issues contributing to higher prices. I never disputed that. Prop. 13 exacerbates the situation. Also, prop. 13 is one of the reasons municipalities favor retail over residential, rightly or wrongly. L2S