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

To: 10K a day who wrote (88254)	9/6/2007 3:32:51 PM
From: ClearSky	Read Replies (1) \| Respond to of 306849

Agree on that point for California. New home tax rates are over 2% now in many areas with even relatively small price adjustments, and HOA dues can be high as well on top of that. While some states have higher tax rates, 2% is a "magic" ceiling that most builders and cities strive to stay under in Calif., but I am sure we'll see many areas go far past that in this downturn. Given that many buyers didn't budget for ARM adjustments, the property tax bills present a double whammy. Although homeowners can appeal part of their tax bills (ad valorem), they can't appeal special assessment portions of the tax bill (Mello-Roos, assessment bonds) which can be extremely high in some areas. These high tax bills now are making it hard for people and builders to sell homes because people are once again thinking through purchases and are concerned about high tax rates. Will be interesting--there are other issues like the accelerated foreclosure provisions on land secured financing (like Mello-Roos and assessment district bonds) that have yet to fully kick in and further complicate things for homeowners and lenders. While not a huge factor, it could add fuel to the fire in California later as property tax delinquencies rise.