Real Estate Crash thread

[neufox47]

In other news, my neighbor just listed for $25k more than we bought our place for. We went into contract in November and closed in February. Their house is 2/3rds the size of ours (but same number of bedrooms one less bath, ours is a 3/3.5 with two “offices”). Ours needs a new roof theirs needs a new kitchen. I’ll be shocked if they get it but good luck eh. If there house is worth that we ought to have made at least $150k in 2 months.


Sent from my iPhone using TGR Forums

[Ted Striker]

Should be some homes opening up for sale south of Tampa.

https://www.cbsnews.com/news/florida...ay-2021-04-05/

Earlier today I proclaimed "oh, the manatees!" but nobody got the joke.

[Garbowski]

Getting taxed out of your own home sucks, but change is inevitable. Always liked this story, and I do shop there. https://en.wikipedia.org/wiki/Edith_Macefield

30 years ago there were only 250 million people and interest rates were 9%.

[glademaster]

I still don't think someone who bought a house for 80k in 1976 should be paying taxes on that value when their house is now worth 2 million.

Bend over, Grandpa! Time to tickle those tonsils from the bottom up! As it should be.

[sirbumpsalot]

Boy, you really do not get it.

Why are they rich? They got stock options. Equity. A very substantial asset. At a very young age.

Now, it's up to them to take that equity and diversify. Or not. But, after initial tax hits, they are probably destined to not having to work for somebody else for the rest of their lives. That, genius, is wealth.

Miserable middle class condo dweller trying to explain rich people's taxes and finances....now THATS rich. Please...go on. I'd love to hear more.

[schuss]

That's a lot of yelling with no purpose. A lot comes down to: who manages/stewards facilities and infrastructure? Cities naturally cost more/acre but less/person as you have to invest in mass sewer etc. to replace septic. So burden moves from individual (who can choose to play fast and loose and let their septic fail) to municipality, who charge incremental taxes to cover costs.
SALT changes completely fuck urbanized areas, as there's a limit to how much you can charge for incremental services/household before it becomes an additional burden rather than one with a fed discount. This is largely counterproductive given that density is the most efficient growth plan. Wyoming et al can't understand this stuff because they haven't hit the problems yet. Much like Texas in 20 years will likely be much different as they have to grow up in management if they aren't going to be some hideous frankenstein of inefficient services that cost too much and are unreliable.
Centralization has a place, and common infrastructure is one of the places it makes sense. Charging people for the install doesn't make sense, as then it's just roulette of "who pays the bill" vs. incremental investment over time.
Shit like prop 13 ALSO breaks this, as you can no longer adjust taxes for needed investments, so it has to become a priority for the state rather than a municipality being able to self-serve on fixing their own problems. Getting taxed out of your home? Sure, that sucks, but in those cases you're likely sitting on a massive store of wealth you can convert to a place in another area. They also could just limit it to "taxes stop increasing when you hit 65 or disabled" and problem is solved, but CA rich householders (looking at you liv2) are too whiny to let that happen and would rather pass the bill onto new propertyholders and income tax.
So what do we do? There's no perfect solutions, but I'd personally like to see a lot more scrutiny and penalty focused on the investors gobbling up housing, given that we have enough (in most cases), but plenty of people are sitting on empty shit to drive up prices/hold capital. Fuck that, go invest in a small business or do something useful.

[AdironRider]

Sadly LOL. Where the middle class goes to die rich?

Damn, well a couple pages overnight and we didn't get to finish our conversation.

I think the difference we have in our perspective on this is that you think someone who's house appreciates to a couple million is still middle class, because of their income years prior. And while I agree that middle class people can make right decisions that result in additional wealth, my perspective is that they are no longer middle class as a result of those good decisions. I don't see that as a bad thing. That asset has value, and you don't get to say you are just some middle class guy when you are sitting on millions in assets. Most people are not that lucky.

[old_newguy]

Oh man, the sprawl is already eating municipalities lunch when it comes to maintenance of existing infrastructure. All these roads and pipes serving low density suburbia cost a fortune to maintain on a per capita basis. It’s the dumbest form of development, especially since people don’t want to or can’t pay to maintain.

Just look at any given jurisdictions maintenance backlog for roads. Usually 10-20 years worth of work and tens of millions of not hundreds of millions of dollars of work.

Usually can just google “your towns name” and Pavement Preservation plan to have your eyes opened.

[Kailua_Boys]

More insanity. House that sold for $950K in Oct 2017 just went under contract after 3 days on the market for $1.6M. $650K increase in 3.5 years.

My Dad told me he gets cold calls a few times a day from realtors. I guess they scan the tax docs looking for people who've been in the neighborhood for a while.

I often wonder what I would do if I got a crazy offer. I always said that I would never sell. But, everyone has a price. If someone offered me enough I'd be out the door and find a new place to live.

[Conundrum]

Damn, well a couple pages overnight and we didn't get to finish our conversation.

I think the difference we have in our perspective on this is that you think someone who's house appreciates to a couple million is still middle class, because of their income years prior. And while I agree that middle class people can make right decisions that result in additional wealth, my perspective is that they are no longer middle class as a result of those good decisions. I don't see that as a bad thing. That asset has value, and you don't get to say you are just some middle class guy when you are sitting on millions in assets. Most people are not that lucky.

I'll give you one thing to consider and then I'm truly out on the conversation. Maybe you're right on paper. Someone posted up thread that class has to consider location too. If I have massive equity in a paid for house in one location but my net worth is tied up in that equity because I made middle class wages and bought 30 years ago, am I really upper class if I can't downsize in my location to access that cash? If I have to move to a different community to exercise my "wealth", am I the class of where I could move without moving? And if we're using net worth as the determinate and considering a person has to live somewhere, using a HELOC is debt so using that vehicle would effectively wipe out the net worth. Right?

[liv2ski]

Getting taxed out of your home? Sure, that sucks, but in those cases you're likely sitting on a massive store of wealth you can convert to a place in another area, but CA rich householders (looking at you liv2) are too whiny to let that happen and would rather pass the bill onto new property holders and income tax.
So what do we do? There's no perfect solutions, but I'd personally like to see a lot more scrutiny and penalty focused on the investors gobbling up housing, given that we have enough (in most cases), but plenty of people are sitting on empty shit to drive up prices/hold capital. Fuck that, go invest in a small business or do something useful.

Ha, it is fine for people to be taxed out of their homes? Fuck you buddy. I don't want to move for that reason. Like I told a neighbor years ago who stopped me to say they thought it sucked that my taxes were 25% of theirs. "You knew the rules and you still chose to move knowing your taxes were going up 5X from your previous property. That isn't my problem as you made your own choice".

[Mokomahonah]

Getting taxed out of your own home sucks, but change is inevitable. Always liked this story, and I do shop there. https://en.wikipedia.org/wiki/Edith_Macefield

30 years ago there were only 250 million people and interest rates were 9%.

Developer inherited the house after old lady died, sold it to a realtor. Then the house got repo'd for back taxes, go figure...

Sent from my 5007Z using Tapatalk

[schuss]

Ha, it is fine for people to be taxed out of their homes? Fuck you buddy. I don't want to move for that reason. Like I told a neighbor years ago who stopped me to say they thought it sucked that my taxes were 25% of theirs. "You knew the rules and you still chose to move knowing your taxes were going up 5X from your previous property. That isn't my problem as you made your own choice".

You are not entitled to live forever in one spot on your terms. It's pulling the ladder up after you on a grand scale. Also, given that the properties you've mentioned are north of a mill, you're just another whiner who's been extracting and not paying what they should. Cry me a damn river.

[AdironRider]

I'll give you one thing to consider and then I'm truly out on the conversation. Maybe you're right on paper. Someone posted up thread that class has to consider location too. If I have massive equity in a paid for house in one location but my net worth is tied up in that equity because I made middle class wages and bought 30 years ago, am I really upper class if I can't downsize in my location to access that cash? If I have to move to a different community to exercise my "wealth", am I the class of where I could move without moving? And if we're using net worth as the determinate and considering a person has to live somewhere, using a HELOC is debt so using that vehicle would effectively wipe out the net worth. Right?

Only on a ski message board (wait maybe polo also) would someone who has made millions in real estate be trying to convince others they are just a normal middle class guy.

I say this mostly in jest, I get your point but I'm not buying that it is some massive hardship ultimately. You don't deserve special treatment as a multi millionaire just because you started out middle class.

[MontuckyFried]

You are not entitled to live forever in one spot on your terms. It's pulling the ladder up after you on a grand scale. Also, given that the properties you've mentioned are north of a mill, you're just another whiner who's been extracting and not paying what they should. Cry me a damn river.

So you're ok with when massive gentrification from mega developers and home flippers screws over the local, long-time lower income folks whos properties just got assessed for many times over what they used to be? Got it. We've all seen it time and time again. Home in the hood owned by a long time resident worth like $10K. Maybe $50K. Then a nice new condo development goes up next door. Or pimp house gets put up on the vacant lot or tear-down across the street. Boom. Now the guy's home is worth $500K and the appraisal district is all over that, licking their chops. Sad seeing some of the tax foreclosures, which said developers and home flippers are all over.

[Conundrum]

I guess everyone measures wealth differently. And I'm not claiming middle class. That's just a hypothetical but really could have been my situation given trajectory when I bought my place.

[AK47bp]

An agreed upon definition of middle/upper/lower class would really help this discussion.

Carry on, good read fellas.


Sent from my iPhone using TGR Forums

[dunfree]

Damn, well a couple pages overnight and we didn't get to finish our conversation.

I think the difference we have in our perspective on this is that you think someone who's house appreciates to a couple million is still middle class, because of their income years prior. And while I agree that middle class people can make right decisions that result in additional wealth, my perspective is that they are no longer middle class as a result of those good decisions. I don't see that as a bad thing. That asset has value, and you don't get to say you are just some middle class guy when you are sitting on millions in assets. Most people are not that lucky.

Make up your mind. Are they lucky? Or did they make a good decision? Maybe the morality play of personal wealthis a blinder?

Family friend inherited a home a block from the beach in NorCal. They lived there for decades, paid a pittance in taxes because the place had been bought in the 1960s either when built or shortly after, they died last year with the home worth >$1 million, easy. But for the last decade, when she was in declining health that precluded work it was more a golden handcuff - a source of large paper wealth but inaccessible. In part inaccessible because of shitty CA land use rules that prioritized single family homes left no where to downgrade to and still be by family & friends.

[liv2ski]

You are not entitled to live forever in one spot on your terms. It's pulling the ladder up after you on a grand scale. Also, given that the properties you've mentioned are north of a mill, you're just another whiner who's been extracting and not paying what they should. Cry me a damn river.

Like assholes, everyone has an opinion and yours clearly stinks IMO. I supported prop 15 last election which would of repealed prop 13 on non owner (rentals/income property) and commercial properties as IMO, prop 13 was never meant to save income producing properties from increased taxes, BUT it was voted down, as most people in CA do not want to do ANYTHING to rock the prop 13 boat. So ya, I was ok paying more taxes on my rentals, but fuck you on a primary residence. But lets talk about this again if you're ever in my shoes.

[Danno]

The pension discussion was way more interesting.

I see both sides of this one; people who bought when it was cheap shouldn't be forced out by rising property taxes due to escalating values. That said, they do reap the benefit of those escalating values when they sell. Maybe a system could be set up that's more equitable than what exists in California, where someone can maintain their property taxes at a reasonable level, but the unpaid taxes go into an account as a debit that must be paid off upon sale, so that they don't get lower taxes AND reap the benefits of increased property values when they sell. When they sell, the proceeds from their sale would be reduced by the unpaid taxes sitting in that account?

Just spitballing. I think CA's solution isn't equitable, but I also think it sucks that people can get forced out, even if they do reap the benefits of the sale.

[AdironRider]

Woe is the person that inherits a beach house then gripes about the taxes.

Whoever said LOL at gentrification coming for white people was spot on. Pay your dues, you don't deserve special treatment for owning millions in real estate.

[old_newguy]

Seems like Boise was probably on some list of low cost places to live and plan for retirement 20-30 years ago.

Danny is probably on to something, but state capital income tax probably takes care of it or could if structured correctly.

[schuss]

So you're ok with when massive gentrification from mega developers and home flippers screws over the local, long-time lower income folks whos properties just got assessed for many times over what they used to be? Got it. We've all seen it time and time again. Home in the hood owned by a long time resident worth like $10K. Maybe $50K. Then a nice new condo development goes up next door. Or pimp house gets put up on the vacant lot or tear-down across the street. Boom. Now the guy's home is worth $500K and the appraisal district is all over that, licking their chops. Sad seeing some of the tax foreclosures, which said developers and home flippers are all over.

There are ways to protect elderly and lower income without the massive issues that prop 13 introduced of eternally undertaxed properties because of family carryover stuff. You can choose to protect that, or let market sorting effects take care of it. You and liv2ski are all up in arms about "oh, the overtaxation!", when really you're just taxing a different group more heavily to recompense. Is that fair? Also, it's a CHOICE of many municipalities not to have assessment rebates or other things for long-term residents, so rather than get salty at me, get salty at the people actually turning the cold shoulder to their neighbors for that sweet tax cash.
It's a problem with few easy solutions, and most of the complex ones aren't understood by most people. As places become more desirable, they are worth more. Healthy housing movement would provide for some cushion but eventually move people around, as stuff like prop 13 and rent control DISINCENT moving, thus stoppering up the works until you get stuff like rent control fraud (I know a few on this forum that "live" in major cities but mostly sublet) or people just sitting on stuff, driving up pricing even more by constricting supply. To solve properly, you need to solve the empty property problem first, as fuck those people, but long term you want a set of systems that self-corrects, not locks things in with no provision to change the terms (present day prop 13).

And liv2ski - I live in a state with no income tax, mostly just property tax (NH) and my house has appreciated probably 50-60% in the past few years. I pay my taxes and volunteer in my community without bitching about it, it's called walking the walk.

[old_newguy]

Like assholes, everyone has an opinion and yours clearly stinks IMO. I supported prop 15 last election which would of repealed prop 13 on non owner (rentals/income property) and commercial properties as IMO, prop 13 was never meant to save income producing properties from increased taxes, BUT it was voted down, as most people in CA do not want to do ANYTHING to rock the prop 13 boat. So ya, I was ok paying more taxes on my rentals, but fuck you on a primary residence. But lets talk about this again if you're ever in my shoes.

Not super familiar with prop 13 so bear with me.

Does it have the effect of raising taxes on new and resold property beyond what would be required if everyone paid the same rate?

IE - are new owners carrying the tax load for the owners that bought 20 years ago?

[schuss]

Not super familiar with prop 13 so bear with me.

Does it have the effect of raising taxes on new and resold property beyond what would be required if everyone paid the same rate?

IE - are new owners carrying the tax load for the owners that bought 20 years ago?

In short - yes. In longer terms - the state is filling the gap because at this point property tax increases can't be more than a % or two so it's now an inflexible instrument.