‘People Can’t Ask Outrageous Prices Anymore’
A report from Wilmington, North Carolina. “Driving into North Topsail Beach, it is hard not to notice ‘For Sale’ signs sprinkled through front yards. The red hot real estate market in the area had driven up property values in Onslow County dramatically, which drove property taxes up as well. In the past year, property taxes had increased by 400 percent.”
“Many residents, especially elderly on fixed incomes, are trying to sell their houses. ‘It’s a big increase and so sudden that they cannoy afford their taxes,’ said (realtor) Dutch Bageant, ’so they decide to sell and it’s tough for them.’”
“Even tougher is that the house prices are beginning to fall, as the housing market seems to be cooling off. Bageant said there are enough houses for sale in the Topsail Beach area to sustain buyers for the next five years. Some realtors said that it was a clear indication that the houses were overpriced.”
“Chris Rackley, head of the Topsail Island Realtors Association said that only twelve houses were sold in North Topsail Beach last month. For now, realtors say that sellers will have to wait.”
From the Journal Now. “In the Triad, Prudential Carolinas Realty experienced some slowing of sales in the upper-tier price range, $450,000-plus, during the first six months of the year, said Tommy Camp, the company’s president. ‘We were going through a period of adjustment or cooling down somewhat from significant rapid appreciation in recent years,’ he said.”
“There are pockets where sales have slowed as interest rates have risen, said local industry experts. To attract buyers, some builders are offering more incentives and some sellers are reducing prices on homes.”
“E.J. Hanes Construction Inc., a Winston-Salem-based homebuilder, has experienced a slight slowdown. ‘We’re doing discounts to make up for it,’ said E.J. Hanes, the company’s president. ‘We find that that’s a necessity to be competitive,’ he said.”
“Three agents told Beverly Godfrey that they are inundated with people moving to the Triad from up north to escape the cold and from people moving here from Florida to escape the hurricanes. ‘Most of these people are coming from higher-priced markets,’ Godfrey said.”
“Some experts said that the Triad is becoming a buyer’s market, which can become a challenge for some sellers. Builders and real-estate agents are optimistic about the local real-estate market and said there’s no risk of a bubble or sharp slowdown in the Triad.”
From the Ledger in Florida. “Home prices in Polk, like in other parts of the country, have risen rapidly, fueled by population growth and investors looking to capitalize on the growth.”
“Current salary levels for firsttime buyers aren’t often in line with the asking prices of many homes. ‘There aren’t a whole lot of young, single people buying properties,’ said Mark Piburn, for Wells Fargo Home Mortgage in Lakeland.”
“But there is hope prices might come down or at least level off. Existing home sales and building permits for new home construction have declined significantly in recent months, indicating a slowing market. Local home sales dipped 24 percent in July, falling to 462 homes from 609 the year before.”
“July also was the fifth month in 2006 where home sales had dropped from the year before. The month also had the largest decline of building permits, down 56 percent from a year before, in county history, according to Ledger records.”
“‘It is a buyer’s market,’ said Jan Bellamy, a Realtor in Lakeland. ‘People can’t ask outrageous prices anymore. That’s what we try to tell our clients.’”
Now that’s outrageous…
“‘It is a buyer’s market,’ said Jan Bellamy, a Realtor in Lakeland. ‘People can’t ask outrageous prices anymore. That’s what we try to tell our clients.’”
It’s not a buyers market. There are no buyers. We’ve (finally) run out of idiots.
Come on up to Eureka, CA, there is a bunch of idiots here still buying…
Winter Haven here:
It is much worse here than the Lakeland Ledger is alluding to. They are still in bed will the local good-ole boy network of landed gentry and Realtors(tm)….so they need to keep the bad news muted ’till the local insiders can still get out…it is getting harder to deny the explosion of unused/unsold inventory, however… The greed set in around 2002 and the Realtor asshats were stumblin’ over themselves to buy up all the land and houses they could in order to flip for the “easy money”.
I am seeing 2004-2005 Hummers, Big Diesel 4X4’s and boats for sale on the lawns…much more than before….the greedy asshats want Kelly Bluebook numbers but nothing is selling….the rest of us have to WORK for a living and aren’t in the market for used $70,000 Hummers….Went to Lowes here in Winter Haven this weekend for propane at 10:00am and it was quiet. They just laid off about 20% of their staff here over the last few weeks in anticipation of a slowdown.
One last thing, the methheads and the gangstas down here have taken to stealing pool pumps from the thousands of vacant homes ( mostly British / Scottish / South American absentee owned ) from up in the Four Corners area near Orlano in Northeast Polk, often in broad daylight : http://www.polkonline.com/stories/091906/crime_burglaries.shtml
‘The villain of spiraling insurance rates in Florida is now reinsurance. ‘”Living in Florida has been great,’ said Grogan, a middle- class mortgage broker who lives on a barrier island next to the Atlantic Ocean. But he doesn’t know whether continuing to live in Florida is realistic.’
‘In Volusia County and across Florida, a tax revolt is brewing just in time for election day. With property values soaring, business owners, landlords and home buyers have become increasingly angry as they find out how much they might have to pay in property taxes.’
‘The last few weeks, homeowners and landlords, property tax notices in hand, have descended on budget meetings like an army. They’re mad as hell, and they’re not going to take it anymore. ‘My taxes and insurance are killing me,’ Merle Blake, of North Lauderdale, who bought her first home for $229,000 last year, told Broward County commissioners last week. ‘You’re going to have people living on the streets.’
“The red hot real estate market in the area had driven up property values in Onslow County dramatically, which drove property taxes up as well.”
Another ugly symptom of inflated home values.
I wonder how much California housing equity money was used to inflate values in other states that DON’T have a basically fixed prop tax rate like Cali.
LOL. You have to ask? Take a look at a price graph in places like St. George, Utah, Boise, ID, Flagstaff, AZ, and the list goes on . . .
I wonder if the carrying costs and falling prices force sales or worse will have a kind of back wash effect Californians. If you bought 3 houses in other states and now the insurance and taxes have risen does it make you think about selling? Maybe if the rise is enough to make it unprofitable to hold the properties. What if you couple that with resets on your ARM or I/O? Again, if the increases are enough to make it unprofitable. Finally, what if the appreciation stops or drops and now you are sitting on a note for more than the property is worth and that value is dropping? I guess my point is that we may see a the CA investors exit these markets in the near future.
If prices fall how long will it take for the taxes to drop back as well? I imagine that gov will be slow to do that as it cuts revenue.
With regard to insurance in coastal areas the only thing one can do is reduce the coverage to the minimum, but I imagine that investors/speculators had the minimum to begin with so not much room to cut back there.
Unless there is a taxpayer revolt, government tax revenues will not go down if RE prices go down. When was the last time a government entity voluntarily reduced its size? What will happen is that as appraised values go down the tax rate will go up.
‘The last few weeks, homeowners and landlords, property tax notices in hand, have descended on budget meetings like an army. They’re mad as hell, and they’re not going to take it anymore. ‘My taxes and insurance are killing me,’ Merle Blake, of North Lauderdale, who bought her first home for $229,000 last year, told Broward County commissioners last week. ‘You’re going to have people living on the streets.’
But that’s the price of living in “paradise”.
“[NC]… ‘For Sale’ signs sprinkled through front yards. The red hot real estate market in the area had driven up property values…In the past year, property taxes had increased by 400 percent.”
Prop 13 for everyone. Even for something designed to unfair, taxes it seems outrageous that the amount you pay every year is based upon the judgement of stupidest person in the neighborhood.
Prop 13 just shifts the tax burdeon to young families who can least afford to take the hit. I would like to see a per square foot inflation indexed tax, rather than a valuation tax. Of course local govt’s are loving the huge increase in tax revenue right now and are not complaining. Another possibility that would eliminate rapid fluctuations would be to link taxes to a 10 year moving point index, although in a case such as todays, your taxes would remain high long after the market collapses. Obviously, just because some idiot over paid for a house, that does not automatically make every house on the street that value.
And again, I was pointing out the results of the current corrupt system and why Prop 13 came about.
Now with that out of the way. Do tell all expert of things property tax; where in the law or where on the tax bill is there anyplace that mentions one’s age or family structure? Not that I expect an answer from someone who also intones; “just because some idiot over paid for a house, that does not automatically make every house on the street that value.” That is exactly how it works and why people are being taxed and insured out of their homes.
Prop 13 resets the tax when a property sells. The clear result is to shift this tax to younger folks starting out and away from land wealthy seniors. I do not believe for a minute ANYONE should arbitrarily have to pay more tax based on bubble house values, and I equally do not believe that with two identical houses side by side one person should have to pay thousands more than the the other for the same value house. So I am saying the current system is corrupted and prop 13 is corrupted. A fair tax would tax based on square footage and be linked to the inflation index, ensuring local governments get what they are entitled to, residents do not have sudden giant tax increases to deal with and all pay their FAIR share. With regards to age and structure, seniors on fixed incomes are ALWAYS cited as the reason we need prop 13 and ALL new buyers under this scheme which includes 100% of all first time buyers, who typically are younger and starting out will pay much higher tax than those who have lived in a place many years and accumulated considerable wealth and equity.
From the old and wealthy to the young and dumb. Another good reason to refuse to buy in California at these prices.
In 5 years from now, do you really want to have your tax assessments double what new buyers in the neighborhood are paying, or quadruple those who remain in the neighborhood who bought before the housing bubble? Let alone the fact that you are now paying off a debt that is double what your newest neighbors have?
RC, you are correct. I know someone who paid 150k for a house in Texas 15 years ago and now pays almost 8k per year in prop taxes based on assessment.
I know there are many who think Prop 13 is bad….but it allows someone to have an additional fixed cost along with the 30 yr fixed rate loan.
Yes, after the fallout. I expect other states to vote on their own version prop tax reform.
That’s the spirit. Yes, exactly. People here extoll the virtues of fixed rate long term mortgages but don’t agree to do the same with property taxes. Prop 13 is deeply flawed but the idea of limiting the government’s ability to confiscate arbitrary sums from illiquid and immobile resident’s assets is more deeply flawed.
Prop 13 is privatizing benefits and socialising costs. That’s the spirit. Yeah! More deficits for everyone. F*** firefighters, municipal roads, police, utilities, schools.
Who needs this crap anyway!
Prop 13 is privatizing benefits and socialising costs.
Taking money from private entities and spending the money on public priorites is the exact opposite of how you describe it. You are clearly unqualified to comment on the subject.
More deficits for everyone. F*** firefighters, municipal roads, police, utilities, schools.
Who needs this crap anyway!
We all need that crap. That’s why we have taxes on everything and double and triple taxes on some products and activites. None of that has to do with the implied property tax revenue shortfall. California does not have a revenue problem it has a spending problem.
Spending problem indeed. But any local/state government that’s basing its spending on these rosy real estate prices better brace itself for assessment appeals galore in a couple of years, once property values drop (and assessments remain sticky).
end italics
Even for something designed to unfair, taxes it seems outrageous that the amount you pay every year is based upon the judgement of stupidest person in the neighborhood.
That’s weird. I could swear that the stupidest person in the neighborhood allowed you, RC, to unload your properties for a hefty profit. Never heard a peep from you about how unfair it is.
Did anyone on this blog hear Robert complain about his profit?
The difference is that buying and selling houses is a volluntary transaction. The nice tax man has a gun to your head. I am speaking literaly. If you don’t pay property tax a man with a gun will show up at the door.
I dislike prop 13 intensely because it cause more distortion in an incredibly bad tax system.
The idea behind prop 13, constricting government growth, is not inherently bad. Instead of a prop 13 I would prefer to see a prop that limits government spending to inflation times population growth / decline.
This would have the benefit of encouraging the government not to lie about inflation, and simultaneously reduce tax burden in a more equitable way.
There are those who would argue that big government is not evil in itself. I am not sure I believe this after watching Katrina last year. Why don’t we (the people) hold politicians accountable for their screw-ups?
Oliver
I just love the incessant mental masturbation regarding Proposition 13. It’s just like tobacco taxes, sales taxes, short-term capital gains taxes, long-term capital gains taxes, excise taxes: “THIS behavior IS noble, and THAT behavior is NOT noble, so let’s tweak accordingly (until the NEXT election)”
http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-newsArticle&ID=906789&highlight=
This is an excellent read, just out today, by PMI on the Risk of housing declines by market area. Check it out. San Diego leads with a score of 603 (60% chance of decline in the next two years).
(scratches head)
I don’t get it. San Diego’s prices are already declining. Wouldn’t that be 100% chance?
Kind of like the weatherman saying that there’s a 60% chance of rain today, after looking out the window and seeing that it’s raining.
Many residents, especially elderly on fixed incomes, are trying to sell their houses. ‘It’s a big increase and so sudden that they cannoy afford their taxes,’ said (realtor) Dutch Bageant, ’so they decide to sell and it’s tough for them.’”
Cry me a river. They certainly never complained as RE values were going up. And, I’m tired of hearing about the elderly’s fixed income. Don’t we all live on a fixed income (at least those of us who have no debt)? After all, as hard as I work, it is exceedingly improbable that I could go and get a job for an additional $100K/year above what I make unless I develop a new skill set (or even higher educational attainment, etc.). Many of the so-called “fixed” income elderly crowd could get a job as a greeter at Wal-Mart. Or, given that they all lived during two of the greatest bull markets in history (stocks and housing), if they would have made wiser decisions and actually saved a portion of their income diligently, they would be swimming in money and not have to worry about things as they stand. Ok, this may be a simplification, but I worry about how us Gen-Xers are going to fund our retirements when we are making the obligations for today’s Boomers and we’re likely facing an underperforming stock/RE market over the next 20-30 years?
Maybe you’re not listening. My grandma never approved of her house value going up, it didn’t matter, she’s not doing a refi and she doesnt’ want to move.
One thing you also may not be aware of is that it’s pretty hard for the elderly to move. When I was young I could pack everything I owned into a small Uhaul, and I didn’t own anything I couldn’t move myself. My grandma can’t even carry her own suitcase anymore, she doesn’t fly and doesn’t drive. She can’t even get into the bathtub anymore, how’s she supposed to move?
And no, she can’t get a greeter job at Wal Mart.
Inflation sucks, and money grubbing politicians and stupid voters cause inflation.
he red hot real estate market in the area had driven up property values in Onslow County dramatically, which drove property taxes up as well. In the past year, property taxes had increased by 400 percent.”
“Many residents, especially elderly on fixed incomes, are trying to sell their houses. ‘It’s a big increase and so sudden that they cannoy afford their taxes,’ said (realtor) Dutch Bageant, ’so they decide to sell and it’s tough for them.’”
I live in Wilmington, NC and have been saying this since homes have been accelerating in price. Jobs and income are not that plentiful here so as to justify the raise in house prices. Once the tax bills come in, the sh** is going to hit the fan. Everyone laughed at me. Well guess what, here it comes. I am getting hit as well as my property taxes will certainly shoot up. The city council is suppose to reevaluate house values every 3 years but the market was so far down the last time that a reevaluation was due,2002 I think, that they just postponed it as the previous values were higher and they would have had to readjust the taxes down. Now they have no problem jacking values through the roof and getting a ton of tax money out of people. We live frugally so it will not be a problem but the rest of my aquaintances live like there is no tomorrow(all professionals with little to no savings) all the while chastizing me for our frugal ways. Time for some old school retribution now. I will be chuckling when I check out their new tax bills online and waitng to see when they have to financially reorganize. This is not sour grapes but more of a justificatioon and ‘I told you so’.
“‘It is a buyer’s market,’ said Jan Bellamy, a Realtor in Lakeland. ‘People can’t ask outrageous prices anymore. That’s what we try to tell our clients.’”
It’s a buyer’s market coming in for a soft landing, so buy now or get priced out forever!
“The red hot real estate market in the area had driven up property values in Onslow County dramatically, which drove property taxes up as well.”
Why do property values drive up property taxes? This is a scam by the local politicians. When the Long Island house my mother sold in ‘99 for about $300K went on the market last year for almost $800K my first reaction was, of course, that it was pure greed by the seller. Then I found on Zillow that the town’s appraisal was $792,000 for that property. (It didn’t sell and its on the market again this year for $700K).
This is horrible that those retirees in this article saw their property taxes raised 400%. Its theft, and probably the money goes right to worthless jobs for the pols, their families and hangers on.
“There are pockets where sales have slowed as interest rates have risen, said local industry experts.”
Yeah, just small pockets–only about 95% of the country or so.
“Three agents told Beverly Godfrey that they are inundated with people moving to the Triad from up north to escape the cold and from people moving here from Florida to escape the hurricanes.”
Moving to North Carolina to escape hurricanes. Uh-huh. There’s denial, and then there’s Realtor denial. Ding Ding! I think this might be another one for the archive.
The Triad area is pretty far inland. By the time the remnants of a hurricane hit that area, all we’re talking about is tropical force winds and just a lot of rain. The Wilmington area is another situation entirely.
“In the past year, property taxes had increased 400%”
WOW! Excuse me if it takes me a minute to digest that. A 400% increase is significant any way you slice it. Now I’ve never been to North Topsail Beach, NC so I have no concept of what it may have looked like “pre-bubble”. Was it populated with “shot-gun shacks” and now there are all these opulent (and usually vacant) up-scale beach homes? Has the millage rate remained the same and simply the value or quality of homes completely changed the complexion of the community? I don’t have the brass to institute a 400 % increase in tax levels, but how is it that this community was SO entirely distracted that local officials were able to effect this big a change on a group of people that from all outward appearances simply do not have the means to “pony up”?
Yes, these elderly residents may have been in their homes for 40 years, may have bought them for under $20K and may have never intended to sell but the combination of the taxes and people telling them the house is worth so much has put them in the market to sell.
Then they can bank the hundreds of thousands in profit and move to a different, less inflated area…OR RENT!!!
Welcome to the new world of government who will use property owners as cash cows. If these elderly people bought 40 years ago for $20,000 then they have big bucks in equity. Local and federal government smell money and they want a chunk of that equity…..and they intend to get it. So, 80 years old with a house you bought in 1965……….pay up by re-fi or reverse mortgage to pay your taxes. You are going to see this re-fi scam more and more as everyone from lawyers to doctors, hospitals, medicare, local government, federal goverment and let’s not forget insurance companies, scramble to carve out a piece of the massive home equity pie…..by fair means or foul. They figure, if you’re 80, you probably won’t need a house much longer anyway and the government wants to make sure your children get a greatly reduced inheritance so they cannot retire too soon and must continue to work and pay in even more taxes into the system……which is broke.
Mike - well said, thank you!
I catch some occasional flak on this blog for being over the top sometimes about government workers - especially when I rail against them moaning about their pay in their precious jobs - but, beware, the government (especially local and state governments) is taking over the country.
Taking over the country? They already have, when people allowed Lincoln to run the place like a dictator.
My neighbor in Wilmington is fearing his readjustment ( his house is much nicer than ours), and he is upset with the possiblity of a high tax bill. He is from Europe and says that if city council must buy you house from you for their appraised value if it doesn’ t sell on the open market. I guess that’s one way to keep the city council honest with the appraisals.
I once checked out a rental house and the owner told me that every time he pays his taxes he brings his property deed with him. He tells them that he will gladly sell his home to anybody in the tax office, on the spot, for what it is being assessed. He says he wins a small tax concession every time.
I am starting to feel the same way about the valuation on my car. I wish I could sell it for what the state says it is worth at registration.
My state has an income tax, so there is no reason to adopt these Florida rip-off techniques on their scitizens for property taxes.
There is a certain clan of people in a nearby county that drive around without ever having to pay any registration on their vehicles. Their family practically owns the taxing office. What makes me think they are paying any taxes on their RE properties?
This is one of the most inequitable ways of taxation since it excludes certain groups from over taxation: the people in the tax office; their friends and relatives; lawyers, judges, and prosecutors; and the local law enforcement.
This is yet another good reason why I choose to rent and have never purchased or sold RE. None of these people with rental property are cash flow positive, and if they want to be the saps paying into all of this corruption in my stead then I am all for it.
Isn’t it the case that when assessments rise dramatically, rates usually fall? If not immediately, then certainly when the protest candidates run in the next election.
One problem with FL is over-reliance on proerty taxes. That burden could be shifted by facing relaity and instituting an income tax. IMO, it is only a matter of time before this happens.
absolutely! I have said this for some time now. Problem is Florida is a tax shelter. How can people beleive that taxes on air service and hotel rooms will provide income in times when the economy is in a down turn and tourists stay home? Even better yet, make people have to live here for more than 6 months out of the year to claim residency. Add in a stipulation that you must live here durring the months of May to October to qualify. Really live here when it is not so nice outside, than you are a resident! NOT that I want the extra traffic that comes here durring the “season” all year long, but i have a feeling that it would not last to long and they would find another place to go. Just as long as they go!
ot but
us networth down after inflation
U.S. Q2 BORROWING GROWS 6.4%, SLOWEST IN 4 YEARS
U.S. Q2 HOUSEHOLD NET WORTH SLOWEST GROWTH IN NEARLY 4 YEARS
U.S. Q2 HOUSEHOLD NET WORTH UP 0.1% TO $53.3 TRILLION
Household net worth up 0.1% in Q2
Borrowing slows to 6.4% growth, weakest pace in four years
The net worth of U.S. households increased 0.1% in the second quarter to $53.3 trillion, the slowest gain in nearly four years, the Federal Reserve said Tuesday.
After adjusting for inflation, net worth fell in the quarter.
Net worth had increased 13% in 2003, 9.7% in 2004 and 8.5% in 2005.
Net worth is calculated by subtracted liabilities from assets.
Household assets grew by $332 billion to $66 trillion in the second quarter, while liabilities increased by $278 billion to $12.7 trillion. The value of real estate holdings increased by $402 billion, but the value of financial assets fell by $128 billion. The value of corporate equities and mutual-fund shares dropped by $253 billion.
Household net worth dipped to 5.60 times disposable income from 5.67 times in the first quarter. Owners’ equity in their real estate fell to a record low 54.1% of market value from 54.4% in the first quarter and nearly 58% in 2000.
Meanwhile, nonfinancial borrowing grew at the slowest rate in four years, rising at an annual rate of 6.4% after a 9.5% increase in the first quarter.
Borrowing by households grew 9.1%, also the slowest in four years. Mortgage debt decelerated, while other forms of household credit perked up.
Mortgage debt increased 9%, the slowest pace since the recession of 2001. Consumer credit, such as credit cards, increased at a 6.6% rate, the fastest in four years.
Borrowing by businesses increased at a 7.6% rate, the slowst in five quarters. Corporate debt grew at a 6.7% pace, the second fastest pace in six years following an 8.8% gain in the first quarter.
Borrowing by the federal government fell at an annual rate of 2.4%, the first decline in five years. State and local government debt grew at a 6.6% pace, rebounding from a 3.5% pace in the first quarter.
the assume that the re value increased in q2. ……
http://immobilienblasen.blogspot.com/
This is because most “consumers” don’t give any thought to their net worth. Their only concern is “how much a month”. Then they wonder why they never get ahead and why the rich supposedly exploit them.
Gary - Florida not having an income tax right now is about the last thing that makes it tolerable. Wages are low, insurance and property taxes are very high, and if there was an income tax it would certainly be on top of, not in place of other taxes. There is no example of government here reducing or letting go of any revenue stream, only adding to them. When property values were flat, local governments seemed to get by just fine, and now with a 37% increase in revenue in some counties, they claim they need every penny. In any case, an income tax would require a voter referendum to change the state constitution, so it is doubtful.
One of the reasons wages in Florida are low is that the state has adopted California-like regulations for contractors, which started after Hurricane Andrew in ‘92. Want to go in business as a roofer, a landscaper, a deck builder? Then go form a company, put a bunch of details about your life on file for us, buy some overpriced insurance, and pay licensing fees. Well, maybe I just want to put a roof on my neighbor’s house - one story, 4/12 pitch, one vent pipe, piece of cake. Sorry, you get caught doing it without a license, she pays a $5000 fine. (Analogize to the way to deal with the illegal alien worker issue.)
The $30-$50 an hour informal contractor jobs just don’t exist in urban Florida the way they do in Va., N.C., or Texas, where regulation is still light and anybody with a pickup truck and a box of tools can make a handy living. (I pick those three states because I’ve lived in 2 of them and saw that they were just named the 3 best states in the country to do business in one study.)
Here, it’s millionaire Bob and his $9/hour crew. Can’t have you off working on your own, where you might pull a fast one on Granny. Got to protect everybody, that’s why need all those fees and taxes, not to mention those nice box seat tickets at the Jaguar games we got from millionaire Bob.
In some jurisdictions (Maryland is one), there is a pretty fair provision for keeping property taxes under control despite soaring house prices: Constant Yield Property Tax Rates.
The way it’s supposed to work is this: When assessments rise across the board, the tax rate itself is adjusted downward per formula to result in a constant yield (of tax money) from existing properties from year to year. So if you are paying 1.00% per year now, next year you might pay 0.92%. And the state and county receive the same amount of money.
Naturally, though, some government officials do NOT like this (er, in private mostly), and I think in Maryland the county councils have to vote to accept the constant yield result — or not. Some such as Montgomery County have in the past, and maybe present, elected to tax “just a bit higher” than that rate. I did note that Frederick County had a much-publicized rollback in the last year or so, in keeping with Constant Yield –this being coincidentally an election year!
If Constant Yield can be applied properly and regularly, though, it avoids the windfall spending spree that local governments enjoy in speculative times, and is also spreads the burden amongst all owners. Also to note for local government officials for next year’s assessments: If property values drop, Constant Yield can in theory also protect your revenue — by increasing rates automagically as housing prices drop! Eeeek, but that’s no vote-winner, is it?!
Italics OFF!
Makes sense to me since I don’t see how a house needs more government services just because its was assessed at $100,000 four years ago and now is assessed at $200,000. It does not need more police, more firemen, more sewers, etc.
EXACTLY. Now go tell the nice man at the Mobile station that you would like to pay 1975 gas prices for your 1975 El Camino (as one poster shrewdly remarked previously.)
Florida doesn’t have any such provision. If values increase by 30% most local governments keep the same tax rate and take the extra revenue. A few have even raised rates. I’m curious to see if assessed values will follow sales prices downward as fast as they did when the market was rising. My bet is that they will not. The tax assessors generally aim to assess for about 80% of market value, and I don’t think you can claim you are over-assessed unless you can show your assessment is higher than recent comparable sales. So more than a 20% reduction in prices would probably be needed for assessments to come down. This is why people are often right to resist government efforts to make taxes “more equitable” or to reform how they are collected, any change always means “higher” taxes in the end.
Here’s one for you Barbara Corcoran fans:
Barbara Corcoran: Then and Now
nice find. i mentioned this several days ago.
sent to
Cavuto@foxnews.com
Are you back?
the alacrity of her switch from “buy now before prices skyrocket” to “prices have already come down, and they’ve come down by a lot…” only shows what a high rollin’ realtwhore she is! she knows that this seller/buyer standoff means no coin jingling in the reatwhore till.
Happy that the HBB is back up and running. I was seriously “jonesing”…no pun intended.
I think that property taxes help keep prices from getting out of whack. Let’s see how long these flippers can hold onto their property the next few years as sales slow down. If you’re stupid enough to pay $1.2MM for a condo, then you deserve to pay the property taxes on it. Is it a coincidence that California with Prop 13 also has the most overpriced housing in the country? The smarter ones will sell and rent or move. I’m sorry that they’re old or whatever, but people have been forced to move throughout history due to famine, war, persecution and economic conditions. It’s not different this time or in this country. Why don’t you help your grandma pack up and move to a retirement home if she can’t even get in the shower?
I think the argument that Prop 13 is unfair, blah, blah, blah is a bit bogus because any time a house changes hands it is assessed at the new purchase price. Prop 13 only helps those who stay in their homes for a long time. With job changes and the transient nature of people’s lives how many people do that these days? I would argue that the number of people sitting pretty in their 1980 assessed value home is very small in CA and that the majority of CA homes are within 3-5 (5-10?) years of their current assessed value.