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

To: Jim McMannis who wrote (141666)	8/18/2008 5:06:53 PM
From: Peter V	Read Replies (3) \| Respond to of 306849

>>Not with prop 13. The tax bill would float with the assessment.<< And the initial assessment is based on the high sales price. How does this keep prices higher? >>Except that when mania began, people either thought they had to buy (panic buying) or be on the outside forever or they didn't care because they thought the price would keep going up and they could flip. << Doesn't this statement admit that Prop 13 had nothing to do with how people valued homes during the mania? They were not concerned about taxes, they were worried about being left behind, or trying to cash in by flipping. So why should I, the hypothetical guy who bought a house to live in and not flip or cash in on during a mania, have to get hammered by higher property taxes caused by the greedy or panic buyers? You know, before the mania began, the govt. got by with taxes paid on pre-boom valuations. Now that 61 percent of householders in Los Angeles have been in their homes five years or less, the state has had a huge tax revenue increase. According to the Center for Governmental Analysis, between fiscal years 2000 and 2005 property tax revenue has increased 22.11%, while personal income per capita has increased 13.80% and general per capita revenue 21.93%. (from wiki) So even with Prop 13, property tax revenues are growing faster than incomes and general revenues! Why are we crying for the govt. here? The current budget crisis is caused by inability to constrain spending, not by Prop 13.