“Didn’t You Read The Papers? Property Values Are Down!”
The Record reports from New Jersey. “Diane Barone could hardly wait for the six-month real estate listing on her Elmwood Park ranch home to expire in late January. She had listed with a neighbor, who is a real estate agent, in July. And she didn’t think the agent did enough to market the home.”
“‘All she kept saying from Day One is that she recommended the house be listed at $299,000,’ Barone said. ‘I had it listed at $325,000. Other houses in the neighborhood have sold for $400,000.’”
“Barone got three offers in the $280,000 range. But, she realized she couldn’t sell at that price, pay the commission and pay off the mortgage. She is now working to sell the house on her own.”
“Sellers trying to swim the chilly waters of the housing market for the past three to six months, and whose homes remain unsold, now have a decision to make: renew with their current real estate agent, or go elsewhere. ‘Absolutely, you should renew the listing if your Realtor has done everything he or she said they would do,’ said Joan Sobeck, an agent with 40 years’ experience. ‘If the price is too high, that’s not the Realtor’s fault.’”
“Sobeck said that if sellers are holding out for prices their neighbors got when they sold six months ago, their homes are not going to sell. When she does comparable price evaluations, she’ll show the seller comparable homes in the area that haven’t sold in the past six months.”
“‘If there are five houses on the market for $550,000 and they haven’t sold, why would you put your house on the market for $550,000?’ she said.”
The Asbury Park Press from New Jersey. “City property owners this week finished receiving their new assessments, all of which are increasing as a result of the city’s ‘vibrant’ real estate market, said an official. But maybe Long Branch did a little too well.”
“Although the average increase was 209 percent, many property owners in the Elberon section saw their assessments triple, said Mayor Adam Schneider, who lives in that section.”
“‘I’ve got to see if there is a factual basis for that,” Schneider said of the significant increases.’ ‘Sticker shock’ is to put it mildly. I’ve got people on the phone screaming at me. I can’t at the moment justify’ the increases.”
“Schneider said that the assessments may have been done when the real estate market was hotter than it is right now, and many people may be reacting to the fact that they cannot sell their property for the new assessment amount now.”
“Ramon Chaparro Sr. said his single-family house on Broadway was assessed at more than $700,000 although when a bank appraised it in 2004, the figure was $260,000. ‘If they are willing to give me $700,000 for my house, I’d be happy to give it to them,’ Chaparro said.”
“In January 2006, another bank appraised the house at $330,000. ‘I don’t think the market is that great that it is going to go up $400,000′ in a few months, he said.”
“Gary Gvrdik, who lives in Oceanport and owns six investment properties in the city, said he bought a two-family house at 692 Broadway for $120,000 eight years ago. In 2003, it was assessed at $218,000. Now, it is valued at $751,600.”
“‘I just don’t know where they come up with these prices,’ he said. ‘You had these investors investing in town and not caring what kind of prices they paid for things,’ he said of out-of-state investors’ interest in luxury housing. ‘Why should we have to pay for their’ largess?’”
The Baltimore Sun from Maryland. “Baltimore City homeowners saw some of the region’s steepest increases in the recent round of property reassessments. In the city, nearly one in five reassessed homes saw values at least double since they were last evaluated three years ago.”
“This assessment cycle, which takes in about a third of each jurisdiction, is the first to straddle both the housing boom and the more recent slump.”
“‘It’ll be a cold day in hell the day someone gets $900,000 for a home in this neighborhood,’ said Perry Huntley, a homebuilder who judges that his waterfront house in Pasadena is overassessed at about $923,000. He said it was appraised for $100,000 less when he built it last year, and he believes local values have dropped since.”
“‘Everybody, everybody I’ve talked to has complained about the property taxes. … I think [state officials] are going to be inundated with appeals,’ he said.”
“Baltimore County’s west side has the lowest average home price among the reassessed suburbs, and saw the biggest jump by far, at an average of 76 percent.”
“In Howard County, the region’s most expensive jurisdiction, assessors are getting angry calls from residents demanding, ‘Didn’t you read the newspapers? Property values are going down!’ Some metro area residents say values have dropped in their neighborhoods since the housing boom ended in late 2005.”
“‘I appealed it; I was furious,’ said Owings Mills resident Dianne L. Stern, a real estate agent whose assessment more than doubled, to about $600,000 from roughly $275,000. She added: ‘If someone wants to come and pay me $600,000 right now, they can have this house.’”
“If someone wants to come and pay me $600,000 right now, they can have this house.”
I’m sure the property tax appraiser would be happy to come and pay you $600K right now! LOL!!!! Maybe your greedy local government that now has more money than they know what to do with will come to buy it. After all, real estate is the greatest investment ever.
Here in Palm Beach County, they are complaining about the recommendation to keep spending at current levels instead of increasing it. Spend more…more…more!!!!!! That’s the answer.
There are 200+ sellers in San Diego who are implicitly making this offer at the moment, as reflected in 200+ ziprealty.com listings priced at or very near the median SFR list price on the range from $599K to $600K.
The biggest problem I see is the delay in the tax office getting things right. I don’t want to defend them in any way, but in S. FL the bubble hasn’t fully been absorbed by the county tax collector. A good example I see is in my negihborhood. People who aren’t homesteaded (investors and snowbirds) are still being taxed at values in the $200K - $215K range. Those prices haven’t been attainable since 2002 or early 2003. So the powers that be have been undercharging based on property value since at least then. Now that we’re on the other side of the bubble and going down, these people are going to complain loudly when they get assessed at $250, $260, or $270.
What we need are governments that won’t go into a spending craze. No one would have complained loudly about their assesment going from $100K to $250K if the millage rate was cut accordingly to account for the higher tax base.
That’s the case for my house as well. The peak value was around $220k, the last appraisal was 203k. Even though my house is worth less than at the peak it’s still worth more (I think) than the current appraisal. When the two cross I’ll just appeal the valuation and they will adjust it if I can prove my case. I don’t know why people are screaming, most jurisdicions have an appeal process you can follow. Their job is to make an estimate, it’s not like they are God, with infinite knowledge, foresight and resources.
Funny… Did anyone complain about the price lag from the assessor’s office as prices increased?
So tax authorities are working with old numbers. This is surprising how?
That’s the really pretty part of Prop 13 - assessments are only reset when a house sells. It (the re-assessment) may be high, but you bought the house fully aware that the taxes would increase.
Yes, but we had prices in some parts go up 300-400% in 10 years.
Therefore assessment is 3-4x higher for 2005-06 recent homeowners. Many who have sold are actually leaving California.
No kidding. Prop. 13 doesn’t provide equal “protection” to everybody from rising property taxes. It does provide a generous tax subsidy to lucky oldsters who bought long ago and locked in that circa-1979 cost basis, as well as businesses that perpetually transfer property titles via shell companies.
Everyone else (esp. younger buyers) gets screwed. They get to pay all the tax their neighbor’s don’t (thanks to that annual below-inflation 2% cap), plus all the new taxes the state government passed in order to circumvent Prop. 13, Mello-Roos being one of the best known.
If Prop. 13 backers were truly interested in “protecting” all homeowners equally or tax “fairness”, they’d support extending that 1979 costs-basis to ALL buyers, not just birth-lottery winners and corporations. Or, as some here have suggested, just lower the millage rate. Or (even better), just abolish property taxes for primary residences altogether.
At age 19 in 1978, I voted for Prop 13. I would vote for it today if it were on the ballot. California ocean view homes will sell for 50 cents on the dollar within 5 years. Why complain? Tax cuts are good for the economy.
It’s going to be interesting watching the governments attempts to wean themselves off the windfall of property taxes they’ve collected over the past 6-8 years.
It’s also entertaining to watch all the finger pointing as real estate begins to implode. The media and subprime lenders are on the hot seat now, but us housing bears are also going to be big targets as things unwind. I’ve invented a label for all of us hateful housing bears: They can call us “homownphobic”!
I own my home. I feel my house is valued at about what I paid for it, if not a little bit more. I put 20% down on the mortgage and I don’t carry any credit card debt. That’s how people had to buy houses in the 70’s and 80’s. That’s how people should buy homes today.
Let the pain be felt by realtors as well.
Bloggers being taken seriously?
http://njrereport.com/index.php/2007/02/05/1927/
jb
No doubt the complaining is coming from a minority of folks in New Jersey and Maryland. The majority of people in those two liberal states are more than happy to pay the high taxes.
Don’t waste your energy tilting windmills. Instead, find a better place to live.
now have a decision to make: renew with their current real estate agent, or go elsewhere.
why do you need a realwhore w the internet available ?
1-2-3
or
abc
it’s easy as
You will need a representive to go over the contract. As such hire a Real Estate attorney. It will cost you $300-400 and much more better.
tax revolt !
my merry band plans to get folks involved this spring
j6p will finally care
http://www.fcta.org
No wonder the top politicos are not worried about 1 trillion in ARM resets. Bush wants 2.9 Trillion from Congress.
I’m clearly such a piker I think this is real money. Clearly, we have no economic issues, everything is looking “goldilocks.”
Bush set to request $2.9 trillion from Congress Monday
• Money will pay for Iraq and make up for cuts to 141 government programs
• Democrats highly critical of his budget proposals
• The federal deficit hit an all-time high under Bush of $413 billion in 2004
http://www.cnn.com/2007/POLITICS/02/04/bush.budget.ap/index.html
Well Bill, finding a better place to live might involve leaving the country.
Bush set to request $2.9 trillion from Congress Monday, for his new budget.
But he will make some cuts:.. $11.5 billion in savings would come from boosting insurance premiums paid by the wealthiest Medicare recipients, those making more than $80,000 annually for individuals and $160,000 for married couples.
http://www.cnn.com/2007/POLITICS/02/05/bush.budget.ap/index.html
Bush wants, Bush wants. Eff him. The SOB bankrupted two or three companies and was bailed out by his father’s friends before he became Caligula in Chief. If the American people really looked at his resume and investigated his background, etc., as if they were hiring him for a job (and in fact they were, but don’t realize it), they wouldn’t have voted him for dogcatcher, realizing that the result would have been rabid dogs everywhere. Well, I guess we get the government we deserve.
“Caligula in Chief” Wow! A new one.
I often have thought GW would have made a good inner city girls volleyball coach. He is personable, likes nicknames, and seems to genuinely enjoy seeing women and minorities succeed. He is also pretty good about his fitness. How people could have believed he could run the country is puzzling, and the fact that he was reelected in 2004 is beyond belief.
The reason he was re-elected was the Democrats could not put a moderate in the race. Most of the independents like myself wanted a change, but were disappointed by the alternative.
Bush is in way over his head and is surrounded by incompetent and/or corrupt cronies.
Even many of us who are (mostly) liberal disliked Kerry - he was a smarmy jerk who conducted an incoherent campaign. If that’s the best the party had to offer, the Dems deserved to lose that one. Anyone half as charismatic as Clinton would have trounced Bush in 2004.
It was hard to take Kerry seriously. A guy who has several houses and a Gulf Stream cannot relate to the common man too well. I know first hand, I work for people who have such wealth. Their feet hardly touch the ground.
Yeah, yeah… It is his wife’s money. He still enjoys the benefits.
So, who wanted to buy Bush’s high risk Harken stock?
http://www.utwatch.org/utimco/bass.html
In 1990, when George W. Bush was on the board of directors at Harken, he was told that the company was going under. He sold over 200,000 shares of Harken stock weeks before the value plummeted. The overall gain was $848,560; roughly $600,000 of this went towards buying a piece of the Texas Rangers. So, who doled out $850k for a company that could potentially go under at any point directly after the sale? A search of company memos returned only one name, and they can’t be sure to whom or what it refers- naturally, the name is “Lee.”
Since when has there been a liberal (or anybody) happy to pay high taxes?
Liberals don’t want to pay high taxes any more than other people. They want people richer than themselves to pay high taxes.
Every Liberal I know is happy to pay taxes, no matter how high, to pay for what they believe are “critical” services. Like oak-wood paneling in the local school library. Or teachers who bank $100,000 a year and get to retire when they’re 45. Life or death things like that.
I recall seeing numbers regarding the amount of money states received back relative to how much the federal government took from each state. “Red” states took back WAY more money than those crazy liberal states like MA and CA. In other words, conservatives like their government services too, it’s just they prefer that liberals pay for them.
Exactly. Except when they want to start an endless war. Then they just want to HELOC the country.
Are those the same numbers that “forgot” to make clear that some of those numbers go to military bases in those red states?
That must’ve been the liberals version of shock & awe (deception).
Also, counting Arizona and Florida as red states, a lot of people pay taxes in blue states, and then collect Social Security in red states. We could solve the problem by forbidding people in New York from moving to Florida when they retire…
Tell me…..where is this that teachers are banking $100k a year AND retiring when they’re 45???? I’m on my way!
Long Island.
100% pension in PA and 80 % in VA
what’s a pension ?
Yup, my dad just retired and was making 110 on Long Island. He was an elementary school teacher but was definitely not 45. lol
If you really want to make a lot of money on long island then you want to become a Suffolk County Cop. These jobs break 100K base salary after only 7 years on the force, and this doesnt include all of the overtime you can squeeze in. Did I mention they only work 4 days a week and have the most comprehensive benefits package ever assembled?
Its borderline criminal….
Where do I apply?
I think I’m a liberal because I AM happy to pay more taxes for critical services like health care for kids and the elderly and the mentally ill. Does that mean I’m happy that so many politicians use that money for their own “agendas”(aka their own or friend’s pockets) HELL NO!!!!!
Accountability, my friend, accountability!
You’re not a liberal, you’re a socialist.
Like oak-wood paneling in the local school library. Or teachers who bank $100,000 a year and get to retire when they’re 45. Life or death things like that.
LMAO…How true! How true!
I worked as a public school teacher in CA for three years back in the late 90’s, which is –no surprise– consistently in the upper range of average teacher salaries vs. other states. I didn’t know a single teacher that retired at 45 or anywhere close to that, nor one that came close to making 6 figures.
I actually discussed salaries with several old-timers (over 55) when I was considering teaching as a profession, and the highest-paid guy I knew was a 60-year-old PhD making $75K. Granted, this was 10 years ago, but somehow I doubt salaries have improved that much. Union bosses and city hall cronies are quite another story, though…
I guess you’ve never of resident of Baltimore. The schools aren’t exactly swimming in money, despite the high taxes. I don’t recall seeing wood paneling, and as far as teacher’s salaries go, if any were lucky enough to earn that kind of money, they deserved it.
Brooklyner,
What a moronic post. You obviously know nothing about liberal voters or education. Let me guess. Are you another one of those wealthy folks who assume you should not have to pay to help poorer folks get education when your kids can go to Snob Academy?
Give us a break with such over the top, nasty generalizations.
I invite you to come to Florida to check out our public schools. Good luck finding either of those things. My wife works in an elementary school and reports shortages of even cleaning supplies. I’ve met many of her co-workers, and nobody’s making $100K or retiring at 45, at least not to a life of leisure.
Frankly, I wouldn’t have a problem giving public school teachers a big raise, and I would help pay for it. Just dealing with today’s astonishingly bratty and disrespectful kids, and helicopter parents, and curricula strangled by standardized testing, justifies a big salary a lot more than investment banking does.
In Massachusetts they have a neat little check-off where you can pay a higher rate if you want on your income taxes.
How many check it off? Less than 1% in this mecca of “compassionate” people. Not even John Kerry pays the higher rate.
So much for the “sacrifice” liberals are always asking of others.
You are correct sir! So called liberals (socialists) do not want to pony up their money to help the poor and needy, they want to use our money.
I post this because as a former Boy Scout I know that it is sometimes fun to throw gasoline on a fire.
http://carolinajournal.com/exclusives/display_exclusive.html?id=3848
• “Today, under George W. Bush, there are two Americas, not one: One America that does the work, another that reaps the reward. One America that pays the taxes, another America that gets the tax breaks. One America - middle-class America - whose needs Washington has long forgotten, another America - narrow-interest America - whose every wish is Washington’s command. One America that is struggling to get by, another America that can buy anything it wants, even a Congress and a president.” J. Edwards
http://en.wikiquote.org/wiki/John_Edwards
“…Today, under the Democratic congress, there are two Americas, not one: One America that does the work, another that reaps the reward… “
premature ronin,
sounds like you haven’t read bush’s 2.9 trillion budget request yet? This is the first time a dem congress will contend with his spending, unlike the previous 6 repub congresses.
link links to article
‘Edwards Home County’s Largest
check it out
pardon the omission
This is such a BS comment. Everyone bashed teachers when the economy was high-flyin’. Those who can, do, right?
Hare, don’t hate the turtle.
I have an uncle-in-law who told me that people in Seattle should pay higher taxes because of the “clean air and natural beauty” of the Puget Sound area. My wife’s family is riddled with liberals who are constantly advocating for higher taxes.
Do you really think any corporation is going to protect or maintain those things? I want to try to tie this thread into housing, because this is “the housing bubble blog,” but if people want to deny there is such a thing as the public interest they should go live in a shopping mall.
Oh please. It’s just idiotic canard that liberals want higher taxes. It’s all about where the money actually goes (books not bombs).
You misunderstand. He was implying that there should be a “fresh air and scenery tax” for people living in the Seattle area.
Liberals don’t want to pay high taxes any more than other people. They want people richer than themselves to pay high taxes.
Nah! I agree with the first part but disagree with the second part. U2 (”Bono,” et al) get incredible tax shelters in The Netherlands, but they want Americans to take care of social ills in the rest of the world. That means middle class American families, earning AGI of $70,000 per household. U2’s annual take? Tens of millions of dollars.
This is why I HATE economic liberals. I’m an extreme civil liberal though. Would make even a moderate blush.
“Don’t waste your energy tilting windmills. Instead, find a better place to live.”
The problem is that they will move to another place but bring their big spending government ideas with them and then after taxes go up on their new home they complain again
Lots of idiots on this blog. Property taxes go to LOCAL treasuries, to be spent for LOCAL purposes. Dragging Bush and Iraq into this discussion is either silly or disingenuous or both.
Do those counties in Maryland and New Jersey really suddenly need two or three times the revenue from property taxes that they got last year. Will they be spending it just for necessary purposes? Or will there be a lot of graft and unnecessary, local “pork barrel” projects?
Where is the money going???
Not always. California property taxes are redistributed from one central fund. That’s why the school district where I lived was always struggling to find money even though they were smack-dab in the middle of a neighborhood full of million-dollar houses.
How many of you continue to vote for the red shirted thugs or the blue shirted thugs? When will all of you realize that they are the same set of thugs, and you are being played? We have one party, with two factions, both screwing us in different ways. But hey, my guy is all right so I will keep voting for him.
Amen, Steve. I have been saying “The Republicans and Democrats are like Coke and Pepsi” for years. It infuriates my wife’s side of the family who every four years assure me that this “is the most important election of our lifetime”. The Republocrat political consultants come up with ridiculous issues like stem cell research or gays in the military to work up the partisans on both sides and keep us all in line, and yet nothing ever really changes.
Agreed.
I also agree. Most Americans are dupes. The Republicrats are herding us all down the road to serfdom. So out of vengeance, I buy gold…for cash…And I throw away the invoices.
I post this because as a former Boy Scout I know that it is sometimes fun to throw gasoline on a fire.
http://carolinajournal.com/exclusives/display_exclusive.html?id=3848
“Today, under George W. Bush, there are two Americas, not one: One America that does the work, another that reaps the reward. One America that pays the taxes, another America that gets the tax breaks. One America - middle-class America - whose needs Washington has long forgotten, another America - narrow-interest America - whose every wish is Washington’s command. One America that is struggling to get by, another America that can buy anything it wants, even a Congress and a president.” J. Edwards
link links to article
‘Edwards Home County’s Largest
pardon the omission
And doesn’t Mr. J Edwards want to tax those of us who pay health insurance to provide health insurance to those who have none?
““‘I appealed it; I was furious,’ said Owings Mills resident Dianne L. Stern, a real estate agent whose assessment more than doubled, to about $600,000 from roughly $275,000. She added: ‘If someone wants to come and pay me $600,000 right now, they can have this house.’”
Folks calm down. Now you can’t have it both ways! Either you’re happy that your property increased in value and you pay the tax or…go #uck yourself.
cost of gov should only be inflation and maybe MAYBE pop increase-local govs are just blowing the money
I have to say I disagree on this one. Owning a house doesnt make someone an a$$hole. I think some people on this site have taken the position that anyone who owns real estate deserves to burn in hell. Now, while I have no sympathy for people who are stuck with overpriced spec homes and condos and morons who did option arms and “didn’t understand what they were signing” it is my position that If you made a sound investment in your own home or a rental property that cash flows and intend on keeping it why should you have to bear the tax burden of an unsustainable artficially increased market driven up by speculators
and people with no skin in the game.
Again, the beauty of Prop 13. The burden of higher taxes falls to the buyer, not the holder. Tough and unfair on the first-timer, but if you choose to stay put taxes stay low.
The real failing of Prop 13 however is that no two virtually identical properties are taxed at the same rate.
I would propose eliminating value based taxation in favor of a more equitable scheme, in which properties are taxed on the basis of zipcode, square footage and property size alone, and there after, unless the house size increases or the property size increases the taxes be linked to the inflation index. Of course, this would take a Prop 13 style revolt, and local govts would lose the benifit of massive tax increases everytime someone refinanced or sold a home, but it would be fair to ALL, not just older wealthier persons.
Another way that seems fair to me is to tax based on valuation, but let the tax rate drift up and down so that total revenue collected per capita is allowed to increase no faster than general inflation. Therefore during bubble times, the tax rate simply decreases while revenues stay steady. This eliminates the disparity in taxes between newcomers and longtime owners, and removes the current strong disincentive to move or upgrade for fear of resetting the tax basis.
prop 13 is only in california. If you read the story these people are not going anywhere and are getting whacked.
I disagree. California’s Prop. 13 creates chaos and inequality in the tax system. Overall, property is a good long-term asset. If it inflates too fast in value relative to wages that is an overall societal concern that should affect renters, first-time buyers, and long-term homeowners alike. It should not be foisted on the new buyers alone.
In Oregon, we are dealing with our state being ruined by retiring equity locusts that sold POS homes in California that probably never would have reached such absurd prices without Prob. 13. And a particular age class and geographic class of folks would not be so ridiculously equity rich relative to everyone else.
Prop 13 had almost zero impact on price runups over the last few years. 13 simply rewards people for staying put - and if that demographic results in wealth creation and security, so be it. I agree that the greatest failing of Prop 13 is the tax burden on first-time buyers, but it’s pretty hard to get rich by not paying property taxes. Those that stay put are probably conservative savers who shouldn’t be penalized because their neighbor is willing to pay 5X what they did for the same house.
enough about prop 13 already; STFU and start a prop 13 blog; the rest of us don’t give a rats.
OK boss, when will you be passing around our new scripts?
I’m not telling anyone what to write, but there have been too many threads that have been hijacked by irrelevant prop 13 diatribes which only concern a small, albeit apparently rabid, minority.
No offence taken Betamax.
Had to chuckle. I agree prop. 13 is like talking about religion. I was hijacking a Prop. 13 tangent to rail on against CA equity locust. A perennial favorite in Oregon..At least I brought it back to what a pain in the a$$ this bubble has been!
Agreed, Beta. Personally, I don’t give a rat’s ass either. 13 ain’t perfect. Nuff said.
The bad effects of rising home prices, and rising tax burdens, are not unique to CA. Say, someone wants to retire, but stay in their home. The mortgage is paid off- but property taxes now are more than than the mortgage was when they moved in. In a traditional neighborhood, I like to have those ‘old-timers’ stay. I’m not saying I know what is the most fair and just method of taxation, but there can be costs to the community when tax burdens force people out. Also, the old timers here often have land, so when they sell, we are vulnerable to more development.
“Although the average increase was 209 percent, many property owners in the Elberon section saw their assessments triple, said Mayor Adam Schneider, who lives in that section.”
Does he realize that increase of 209% is actually MORE then triple? Am I missing something???
chilly, if there is a God then he is laughing at the homesellers
i predicted that a lot of people who need to sell will start to list early to be slick and get ahead of the spring selling season and the competition. And for some reason in an El Nino winter when it’s supposed to be 70 degrees in the northeast just like back in 1998 we get cold temperatures.
I couldn’t do the laundry last night because of the cold weather and everyone trying to do it. usually on weekends there is no one doing laundry and in this case no one looking to buy a house either
(Barone freely admits the house needs new siding and new windows, and it probably needs an updated kitchen. The feedback the agent got from potential buyers is that the house is too small, the back yard is too small and there’s no upstairs.)
For those of you from outside the Northeast, most of the time this is an “as is” market. Not just in bubbles. No one bothers fixing up a house they are trying to sell. In some neighborhoods, people prefer un-fixed up houses so the original details are preserved and they can fix it up their way.
It sounds like the seller is trying to dump an fully-depreciated McRanch when suburbanites have been buying McMansion. Not a brownstone or Victorian. The likely buyer — not someone who wants to fix it up, but a working class family that can only afford it as is. Things are going to be different as the suburbs age.
Yes, I predict the suburbs becoming rings of poverty, due to Section 8 vouchers bringing in the poor and property taxes drving out the middle class.
I grew up in Houston and have seen firsthand the ring of poverty in previously nice suburban areas. Middle class flight to the next “newer and newest” developments down the fwy.
‘If the price is too high, that’s not the Realtor’s fault.’
Not the current realtor’s fault, no; but perhaps the previous realtor’s fault…the one who got ‘em into the house via the progressive financing-enabled fat overbid so as to not be priced out forever.
realwhores have no power over the market anymore than a manikin at a department store
I’ve either been misled or under-represented by most agents I’ve used to buy a house. One of them was just plain green (we were her 2nd or 3rd clients). One of them was outright dishonest. The rest just wanted to get us “into a house we were happy with”.
Is it really the agent’s fault people are overpaying? I’m not so sure. I’d like to see the liars expelled from the profession, but as long as we insist on paying a buyer’s agent from the pocket of the seller what do we expect? If you want someone to work for you, you have to be willing to pay them yourself.
“Barone got three offers in the $280,000 range. But, she realized she couldn’t sell at that price, pay the commission and pay off the mortgage. She is now working to sell the house on her own.
Hey, Diane. Didn’t you know. Just because you NEED $320K to pay off your debts, commissions, etc, doesn’t mean some moron is going to come along and pay you that price. You are probably a year too late, babe. Maybe there was one realtor that was right (list lower). Life is tough in Flipperville. LOL
what magic is she going to conjure up to make someone pay more than her house is worth?
she’s a witch!
Now every witch worth his/her salt knows magic/energy takes the path of least resistance… Barrone needs more than magic…she needs some supercharged Hoodoo
Brings to mind an interesting proposition.
Tax law should require the city to buy the property at the assessed value if the property owner wants. This would keep the assessments honest and accurate.
In Nicaragua, after the Sandinistas took over, they took advantage of the former political power of landowners by doing just that, requiring the owners to sell.
Doubtful that this would keep the process honest. It would result in low assessments with high mil rates.
No, it wouldn’t keep assessments honest or accurate, it would just open another avenue for fraud.
Buy a cheap house, rent it out to people who trash it for a few years, never make any repairs, and when its completely unlivable, then sell it to the Gov for full tax value.
Trust me, there is no shortage of people who would jump at a chance to scam the government in this way. And they’ll need something to do once they lose their mortgage and real estate jobs.
Most places have an appeal process, if you can prove them wrong they adjust their estimate.
It is hard enough to find the price of things in a commodities market (it changes by the second then). Houses present a market more like the collectable coin markets.
Homeowners don’t all want the same thing. The young and indebted ones likely do like the constant upward revisions of the tax valuations to reinforce their confidence, while the older more stable owners just view it as another hand in their pockets trying to empty their wallets.
Yep, it’s been ten or fifteen years since property owners last insisted the property wasn’t worth its tax assessed value. For the last three years I had to listen to every property-owning debtor in the bankruptcy court insisting that their property was worth 50% more than the tax assessed value, so they could sell it, pay everyone off and take money out of bankruptcy. Now there’s not a peep, they know they’ve overextended, and they’re converting to Chapter 7 in droves trying to discharge the personal liability for hundreds of thousands of dollars of loans which will never be recovered.
I really don’t know how these lenders and servicers are staying liquid.
“I really don’t know how these lenders and servicers are staying liquid.”
As my old boss from way back when I was in the advertising business would say “It’s all done with mirrors”.
When real estate increases far more than inflation ,you than get the situation that people are in now regarding property taxes .Apparently the REIC wasn’t thinking about how property taxes would kill people .I guess those fraud transactions and those inflated appraisals for cash backs aren’t helping with accurate tax bills either .Another reason why you can’t have sub-prime lenders screwing up the works with their faulty appraisals.
Now your going to get sellers screaming that their property isn’t worth the hyped up mania prices . What a situation .
I like how all of a sudden the owners are refering to past and present bank appraisals as a referance point. I feel @ this time that appraisals are unreliable or to put it another way don’t mean jack..
That’s coming from me the honest one!! Prices are plummeting, no buyers to stabilze the market here in MASS anyway. There is still alot of pain yet to come and blood will flow.. Those dam Interest only neg am loans screwed everything up. January was a slow month for me with 1 out of every 2 appraisals being D.O.A . 50% kill ratio due to 80/20s & ARMS
Hi honest appraiser ,must be hell out there . Do you see a even more tight money market coming soon ?
The whole lending side of this market is so strange.. The time that they need to loosen the money supply they tighten and visa versa. Who knows when the market will correct. 07 is gonna be rough. Everyone says spring of 08 will be telling..
Values falling in southeastern Connecticut. Huge Pfifer layoffs at the Groton and New London facalities.Many homes currently on the market and many more to come. Lots of vacant re-sale homes up for sale and even more new construction. Houses for sale everywhere. Many re-sales in the past few months have sold for far less than what they purchased these homes for in 2005-2006. One such property sold for $2.6 million in 1/2005 and just sold again 12/2006 for $2.1. Things are not looking good here in southeastern Connecticut.
glad to hear it! tell me more about the CT economy
“1 out of 2 appraisals..D.O.A. 50% kill ratio…”
Would you clarify what that means? Are you saying half your deals are falling through based on appraisal?
Yes.. People who really should be renters got sucked into a loan product ARMs that created the illusion of homw ownership. Now they can’t refi out of them.
it is really sad..The blame falls directly on greedy loan originators…
I think that was what he was saying .
DOA — Dead on Arrival– could not meet the sale/purchase/refinance amt
That’s it.. you got it. Internet companies are the worst of all.
Desprate borrowers that bought in 05 with -0- down go on the internet to try and get out of those toxic loans. I get calls wanting me to do free work (Comp Check) before ording the appraisal. They would say we don’t want to waste the borrowers $$ if it won’t come in. I say I don’t do that and it’s illegal.. They say everyone else does it. Well call them then.
HonestAppraiser,
I am curious how are your comps calculated?
Is it based on six months previous sales, price per sq foot avg of the last six months sales, or the list price vs. actual sold in the last six months? Or is it a combination of all of the above?
What I am seeing in the past few months is the list price vs actual sold price in this area is quite significantly reduced, the sold price is usually more than 5% less than the actual list price. Based on the comps sold I also see that the average sq foot is also reduced.
Sales price of the comparable is the key factor +/- differences. S.F. is calculated in relation to the subject not as a whole. Properties are getting hard to come by..
You try and get the most current closed sale similar to the subject.. however I have used sales that sold in August which is typically ok in a stable market (within 6 months) but in this market going back 3 months is more accurate but that put’s you into December sales which are few and far between. Buyers are scared which there have a right to be…
I have to agree that buying in today’s market is risky. The comps are few within the past six months to get a real comparison price.
Sigh… I have to wait longer …
Appraisers Say Pressure on Them to Fudge Values is Up Sharply
by Kenneth R. Harney
Nine out of 10 real estate appraisers say they’ve been pressured to raise property valuations by mortgage brokers, realty agents, lenders and individual home sellers. . . . polled 1,200 appraisers from all 50 states plus the District of Columbia and Puerto Rico in 2003 and 2006. Forty-five percent of those polled in 2003 said they had “never” been pressured to fudge the numbers on valuations, but just 10 percent of those participating in the latest survey said the same.
Hummel said one key reason for the big jump has been the national real estate sales and price slump, and the heightened importance of every signed real estate contract to the parties involved.
“I call it a perfect storm scenario,” said Hummel. “You’ve got a situation where sales are down so everybody in the deal needs it to go through” at the price agreed to by the seller and buyer. When an appraiser comes up with a lower valuation than the contract price — based on lower comparable sales prices in a depressed marketplace — the commissions of realty agents and mortgage brokers may be jeopardized.
Appraisers who say they can hit the number get the assignments. Those who say they can’t or fail to respond get nothing. Licensed appraisers must conform to a set of national rules known as “USPAP” (Uniform Standards of Professional Appraisal Practice), which prohibit interference with valuations. Hummel says the vast majority of appraisers are ethical and refuse to give into any form of pressure.
What happens when appraisers decline to play the game? The October Research survey found that 75 percent of appraisers reported “negative ramifications” when they declined requests for inflated valuations. Nearly 70 percent said they lost the client altogether, and 45 percent said they never received payment for the work they did.
Who applies pressure most frequently? The study found that mortgage brokers are by far the worst offenders — 71 percent of appraisers identified them — followed by real estate agents at 56 percent. In the 2003 survey, 47 percent of appraisers identified realty agents as pressure sources, and 60 percent identified mortgage brokers.
Hummel said realty agents are able to retaliate against appraisers they deem uncooperative by telling local lenders or mortgage brokers: “Look, I’m not sending any more (home purchaser) clients to you if you continue to use that appraiser.”
Published: February 5, 2007
IMO, appraisal fraud will be even more prevalent in 2007 as ARMs re-set. For that reason alone, the meltdown will take longer than it should. The bleeding will be prolonged and a lot of fools will assume that appraised values are true market values.
Titanic = crash, then . . . soft landing.
Housing = “soft landing”, then crash.
Maybe appraisers need to retaliate by posting online ads on websites used by buyers. Something to the effect of “if you’re not using an honest appraiser you could lose a LOT of money by overpaying”. Kind of like the Geico gekko eh - “We could save you 15%. Use your own appraiser and SAVE!!!!”
Most buyers consult the internet BEFORE they talk to a Realtor(tm), why not take advantage of it!
Also when the REIC acts like they didn’t help create the inflated prices by “appraiser pressure “,you can see this just wasn’t so .The industry knows what they did .
It’s more like 100%
When the originator is allowed to hand pick an appraiser or add appraiser to the “Approved Appraisal List” then there is pressure.
it’s really sick . Cut a man off from his income to the point he gets worried about starving and ….well its just blackmail .
The slime realtors and mortgage creeps should not be allowed a choice in appraisers anymore because they abused this position of choice .
At one time I had a client (Mortgage Broker) that recycled the same borrowers..each time needing more $ to make the deal work. I long said see ya later to them back in 04..
Talk about slime. I ride bye the place and see 2 cars in the parking lot and laugh my ass off…
“Appraisers who say they can hit the number get the assignments. Those who say they can’t or fail to respond get nothing.”
The same applies to Mortgage companies, the ones who will give out the Option ARM No-Doc 110% loans get the business, the ones who don’t lose business. Or the RE agent who tells a client that they can’t afford a house or they are asking too much for a house will lose business to the ones who will say anything to get a sell.
Now eventually it will all work out and many of the worst practices will result in those people going out of business, but it does not help the honest businesses in the mean time and it will end up hurting a lot of people
I just took a USPAP class which the class instructor (former appraiser) was telling everyone that the fed is starting to crack down on the number hitting skippies.. I hope so cause it can only mean that maybe someday the industry will wan’t them (appraisals) done right with no ramafications.
bearbanker ….In response to your statement that “appraisal fraud will be even more prevalent in 2007…’ I think this is the very reason that the situation should be corrected quickly because it will only drag out the correction and create more foreclosures .People need a stable market ,not this “keep the drunken fraudulent party going “.
I agree we need a quicker correction . . . but sadly, don’t see that happening at least here (northern colorado).
True story - just ordered a new appraisal on a spec home on the market since 8/05. Home is listed for $714,900 and new appraisal came in at $755,000. WTF? - it hasn’t sold in 16 months at $715M and it’s “worth” $755M?? Appraiser claimed “he didn’t want to ruin the subdivision by discounting for time on market.” Builder is already upside-down on this home due to interest costs - but won’t admit it. He probably has a second on that bad boy to feed it. . . a classic example of throwing good money after bad . . . dumbass won’t get it until it smacks him in the face.
You should report this appraiser to your state licensing board. There is no excuse for such a reply by the appraiser. The value is what it is. What kind of statement is ” he didn’t want ruin the subdivision”. I can’t believe your still doing business with this jerk. He/she needs to have their license revoked.
First time using this guy . . . our “real” appraiser recently got out of the business because he wasn’t getting enough work . . . couldn’t (wouldn’t) hit the numbers. Unfortunately, this is probably not blatant enough - I’m sure he can support the comps.
That is exactly why I think the problem will be multi-year and upsidedown homeowners/builders won’t lower prices fast enough.
Watch listings explode on the Housing Track (housingtracker.net)
It is the spring selling season after all!
Watch listings explode on the Houseing Track (housingtracker.net)
It is the spring selling season after all!
Watch listings explode on the Housing Track (housingtracker.net)
It is the spring selling season after all!
ok we get it
not good enough, we need hourly so we can watch the after Stuper Bowl listing pop
I thought Ben had a filter to filter out duplicate posts? Wha hoppen?
It’s stories like this that make me want to put in a 650,000 offer on this house: MLS 4838134 or a 340,000 offer on this one: MLS 4889732.
*sigh* I know wait it out. But still.
“Barone got three offers in the $280,000 range. But, she realized she couldn’t sell at that price, pay the commission and pay off the mortgage. She is now working to sell the house on her own.”
Barone will probably wish she had taken a cash advance on a credit card to get out of the house by the time all is said and done. A $280K offer sounds pretty good in this market.
‘If there are five houses on the market for $550,000 and they haven’t sold, why would you put your house on the market for $550,000?’
Reasons:
1. I’d convince myself my house was better, even if I was relying on some unappreciated aspect such as a new septic system
2. I’d listen to an agent “buying my listing”
3. I’d figure, “sure it’s high, but somewhere someone will want it” — I just need many more showings.
4. I’d figure that once Spring takes hold, RE will take off
5. I wouldn’t. I would either price it realistically if I had to sell, or I’d wait a few years for RE to pick up again.
I see this all of the time when looking to buy. House down the street FSBO $559K then just further down the street same style house $464K. Price realistically or don’t sell.
That’s why buyers like me are waiting … sigh…
Sign of the times? 3 of the 6 headlines at Realty Times today:
http://realtytimes.com/rtmcrloc/California~San_Diego
– Appraisers Say Pressure on Them to Fudge Values is Up Sharply
– Increased Risk For Home Price Declines
– Avoid Foreclosure: Know Your Options
http://www.usatoday.com/money/economy/housing/2007-02-04-housing-econ-usat_x.htm
“Only 9% of economists say the housing decline ended in 2006, according to a USA TODAY survey of 55 economists taken Jan. 18-24. Another 42% said the downturn will end in the first half of the year, and 45% said housing will bottom out in the second half.”
Let’s see: 9% + 42% + 45% = 96%. So if the bottom isn’t reached in 2007, then 96% of the economists will be proven wrong? Sounds about right.
Its a poll of 55 economists, so only 2 think it will last beyond 2007, and one of those is quoted in the article saying she hopes she’s wrong on this. Talk about wishful thinking.
My guess is all of these economists in the poll are connected to the home-building, real estate, or mortgage industry.
I’m sure they aren’t bothering with economists like Dean Baker.
“Only 9% of economists say the housing decline ended in 2006, according to a USA TODAY survey of 55 economists taken Jan. 18-24.”
Of those very same economists, I would wager 91% of them one year earlier would say there is no bubble, renters are stupid, and people should risk everything, including their virgin 12 year old daughters to buy houses.