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

To: Steve_C who wrote (205321)	5/31/2009 1:52:50 AM
From: Skeeter Bug	Respond to of 306849

>>I get you're argument Skeeter. It's not difficult - it's just not based on reality. You're saying taxes provide zero consumer benefit therefore any increase will necessarily increase the cost of owning a home.<< that's entirely wrong. you don't "get" anything. what i'm saying is that tyhe $100 billion that CA spends every year is already enough. they need to spend the money better. if they locked it into less productive things like increasing pensions 50%, THAT'S THEIR PROBLEM, NOT THE TAX PAYERS PROBLEM. >>You're so quick to want to prove you know something about economics (which i know you don't) that you haven't even bothered to understand the framework I'm presenting.<< i know you are getting most things wrong. don't hate on me for taking econ 101. take it yourself - you'll learn something. it was an excellent class. >>If prop 13 is repealed, so every homeowner pays based upon market value, how much does that really increase the overall tax collected?<< for many people, thousands of dollars a year. given that they already are paying and extra thousand or more in taxes due to the recent tax hike, that extra $1k to $5k per year will put a lot of people over the edge. as costs increase, more folks say, "no mas" and leave the state. i suppose you think this is good for real estate prices, too. >>If housing turnover over rates in Ca are really only 8 months lower than the national average,<< first of all, 8 months is HUGE. that's like saying that CA's unemployment is only 3% higher than the national average. that's HUGE, too. >>then in actuality most people are already paying a tax commensurate with market price.<< if that's the case, go away. leave prop 13 alone b/c it won't raise revenue since "most people are already paying a tax commensurate with market price." you are wrong again. in my neighborhood, which is a nice but normal neighborhood, no more than 20% of people are paying property tax commensurate with market value EVEN AFTER THE 1/3 DECLINE! 20% is probably pretty typical and it surely isn't "most." >>Now we must consider what benefits are derived from the increase in tax revenues collected, as well as who pays the tax and who receives the benefits.<< you just claimed there wouldn't be much extra collected when you said most people are already paying up commensurate with market value. you speak out of both sides of your mouth. >>Because, if the extra tax comes from individuals who were also a drain on the economy then it's possible for market values to go up - as now, presumably, there is an increase in services (possible just not likely).<< supported by nothing but your imagination. >>Somewhere in all that is the impact on house prices. Now when considering all factors, I wouldn't be surprised to see a drop in home prices with a repeal of Prop. 13, especially if overall tax levels were raised, just no where near 67%. That's just dumb.<< nobody said that prop 13's repeal would lower prices a marginal 67%. they said a repeal of prop 13 would speed the total decline to 67% in some areas. given that some areas are already down 50% and interest rates are headed higher, the next 15% drop is a gimme. you do understand why higher interest rates lower the price of housing right? higher rates INCREASE THE COST OF OWNING A HOME, JUST LIKE INCREASING TAXES. but you do seem to finally agree with us - increasing the cost of owning a home will drive down home prices, all else being equal. this is a great start! >>Now, if you really knew anything about economics, besides never using the term "all else being equal" when taking about transitions in general equilibrium, you would never make absolute statements about market equilibrium.<< what absolute statement did i make? vague criticisms are worthless and can't be countered b/c nobody knows what you are talking about. i would hope you do, but i'm not so sure. >>I'll give jimmy a pass though because he never claimed to know economics. But really, I don't care what you think - you're an idiot, really. I want to read Live2Sail's thoughts.<< well, you now agree with this idiot - increasing taxes on homes will lower their price all else being equal. since you can't make an argument that anything else will change, housing prices will drop. you can use ad hominem all you want, but i feel pretty good you've learned something today. less ignorance in the world will eventually pay off.