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

To: Wyätt Gwyön who wrote (43760)	10/27/2005 11:38:07 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

so there is a lot of property withheld from the market, and this puts upward pressure on prices. Take this thread backwards to it's beginning because this is the myth I've already disproven by showing that CA has a higher turnover ratio for existing housing than the country as a whole (6.5 as opposed to 5 in the last 3 years), not a lower one as everyone keeps insisting. In fact the North East has a turnover rate almost half the CA rate. People hang onto their low basis houses for the same reasons there but it has no where near the same effect on price until you get to areas where new construction is severely limited, like CA. Price is a wonderful indicator. CA has had a structural deficit every year in unit growth in new housing for the past 25 years (as measured as a gap between new household formation and building new units). CA leads the nation in existing housing sales most years both in unit sales and turnover ratio. You could argue that it might be even higher without the tax treatment, but that would mean that the musical chairs would have blasted past the generally recognised bubble turnover ratio of 5% a year. For a comparison, it took Japan 5 years of it's bubble to turnover 5% of the housing stock, the last five before it peaked. Lately the US has been doing that in a year. CA has had a turnover ratio of 6.5% since 1999 for single family homes.

To: Wyätt Gwyön who wrote (43760)	10/28/2005 1:30:30 AM
From: kikogrey	Respond to of 306849

Remember with prop 13 you can move one time and carry your low taxes with you as long as your new property is less expensive than the one you sold. But that defies the "move up" mentality--if not for more space a "better" location. I agree with Grace, it is far, far cheaper to build a home from scratch than remodel this pieces of, well let's just say California has some very shoddily constructed pieces of real estate. Little junky post WWII boxes can go for $500,000, in certain areas of Los Angeles over a million. What a joke. Unfortunately it is nearly impossible to find a lot to build otherwise I think more people would. I don't think prop 13 has caused prop values to go up by keeping properties from the market, I pretty much never hear that as a reason people don't move. I personally think it's the interest only loans that have done that. Speaking of clownifornia . . . arnoldsneighborhood.com