How are people affording these crazy home prices?

[Bluefish]

I fear that to equalize this insanity, we may have to experience a real estate and possibly an economic collapse for a reset. That will make life extremely tramatic for our kids and grandkids. Without that the future may contain a large number of homeless retirees that can't afford the taxes on their places.

I think the nation as a whole is going to have to do something like prop 13 in CA to slow the increase of property taxes and not tie them to current value, but purchase price. It caused other problems, but when all the retired on SS get foreclosed on due to taxes there will be a revolt if it isn’t fixed.

 

[Bassman]

I think the nation as a whole is going to have to do something like prop 13 in CA to slow the increase of property taxes and not tie them to current value, but purchase price. It caused other problems, but when all the retired on SS get foreclosed on due to taxes there will be a revolt if it isn’t fixed.

Not sure if mentioned in the prior responses but Florida has something similar they call the Homestead Exemption. It is a benefit for Florida residents (not property owners) that caps the annual increase in the assessed value at 3%. The caveot is that you loose the exemption when move so many families are choosing to stay in their homes longer since they cannot afford the property taxes (which are hefty) on the upgraded home. Net result is fewer quality homes on the market and still increasing values for the good ones (even with high rates).

Would be curious if other states start looking at programs like this but I'd wager we see a correction before that happens.

 

[Snowwolfe]

Property taxes only tell one side of the story. Sales tax, state income tax, vehicle registrations, personal property income tax, etc all need to be factored in. And finally add in cost of insurance for your vehicles and home.

 

[Bluefish]

Not sure if mentioned in the prior responses but Florida has something similar they call the Homestead Exemption. It is a benefit for Florida residents (not property owners) that caps the annual increase in the assessed value at 3%. The caveot is that you loose the exemption when move so many families are choosing to stay in their homes longer since they cannot afford the property taxes (which are hefty) on the upgraded home. Net result is fewer quality homes on the market and still increasing values for the good ones (even with high rates).

Would be curious if other states start looking at programs like this but I'd wager we see a correction before that happens.

In California they dealt with that by allowing you to move your base cost for property taxes provided you stay in the same tax district. So you can downsize if you don’t leave the area and keep your base. In the end there is no perfect solution as any way you do it the government is distorting the market.

 

[MountainTracker]

This is an interesting narrative to me.
For this to be true, there has to be a large population of illegal immigrants buying historically unaffordable houses with cash.
Are we hiring them for middle management now instead of picking strawberries?

When you inject a large population into areas that have limited resources, like housing, food, water, energy, jobs. All of those things will become premium.

And if these large populations are used to living in a multi generational home, then you have more people able to pay rent, so even if they are get paid below minimum wage, together they can pay the rent. As rent prices go up, these people can still afford to pay the rent due to multiple home income.

More often than not a persons income will increase over time. Taking that into consideration, a home which has 4 or 5 incomes that go to the rent will be able to, vs a home with 1 or 2 incomes, even if those incomes are much higher.

Unfortunately no nation can unnaturally inject new large populations into the system, especially when the system was on the brink.

I think of it as a ripple effect, the closer you are to where the rock hits the water, the larger the effect, but the ripple continues on effecting everything.


Sent from my iPhone using Tapatalk

 

[Stache Attack]

Thoughts on corporations or hedge funds not purchasing properties, or just not purchasing housing?

I see this often. I am a true believer in capitalism which would allow this, but theoretically decrease our socialist taxing.

 

[jbosk15808]

I wrestle with this one a lot. Definitely a big question of where the line of government overreach is. Where I think it needs to happen and probably the only place I think I would agree with any laws on it, is if local/county law or even HOA (and I hate HOAs) regulated the entity holding residential zoned properties. But even then I am not sold on it. it might just be is what it is and figure out a way to get in the game somehow

 

[signing off]

We have witnessed a change in how companies acquire single family dwellings. People used to walk away or get foreclosed on and companies HAD to take the property. Usually a difficult or below market sellable unit .
Now those companies decided that quality, desirable homes can be brought onto their books as a positive effect. I don't see how we could prevent one, while still using them as back up in the first instance.
I have slow flipped my homes and ignore HGTV and that whole industry. It caused a lot of people to monetize homes instead of looking at them as a place to live.