Real Estate Crash thread

[dunfree]

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?

prop 13 caps maximum property tax rate and limits the increase in assessed value to a couple % a year, in effect shifting funding for government to income tax, sales tax, and fees.

it’s kinda funny seeing people argue for a real estate wealth tax when they are against other forms of wealth tax.

[zion zig zag]

A good friend of mine is a ski patroller and wildland FF for the local ranger district. His grandfather gave him an acre of land in Eden/Huntsville area 20 years ago when it was worth nearly nothing and he built a small home on it himself. The math worked out for him to be able to pay off the materials quickly and live on his meager income for the lifestyle he wanted.

Fast forward 20 years to when Snowbasin and Powder Mountain have blown up, and the valley is full of mcmansions occupied by people from California. His tax payments cost more per month now then his mortgage ever did and the value continues to rise. So some of you are saying that since the house is worth 10x what he started with, he's rich and those are the breaks? So what, he needs to just move to Clearfield and work in a factory now?

[glademaster]

Precisely! You don't have a right to a fixed cost of living.

[sirbumpsalot]

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 I supported prop 15 last election which would of repealed prop 13 on non owner (rentals/income property) and commercial properties as IMO, prop 13 was never meant to save income producing properties from increased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.

Once again....the rich man claims he is "middle class" and refuses to pay his "fair share" to the community.

[AdironRider]

The level of entitlement from the inheritance is ridiculous.

[RootSkier]

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?.

This is the crux of it.

The old widow who had the property bought up around her and developed to its "highest and best use" whose property is now worth 10x what it would be otherwise did not lose, she WON. If she really wants to stay in the house she has lived in all her life then call 1-800-Rev-Mort.

Danno's idea is good, too.

[The AD]

What do you RE experts think about building a separate ADU on a property to increase the value? My wife thinks it's a good idea and would really increase the value of our house. I'm not so sure it would offset the expense of building it. Not to mention greatly reducing the size of our backyard, which I feel is a pretty nice feature of the property currently. I feel like having someone living in your backyard would turn off more potential buyers than it would attract, but perhaps I'm wrong.

[Toadman]

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

Unrealized gains. But it is fun when the numbers are going up.

[Toadman]

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.

If only there was a federal bill being proposed that could address some of these infrastructure issues. Maybe write to your congress critter and advocate for some federal funding? Especially if that critter is a Republican.

[old_newguy]

What do you RE experts think about building a separate ADU on a property to increase the value? My wife thinks it's a good idea and would really increase the value of our house. I'm not so sure it would offset the expense of building it. Not to mention greatly reducing the size of our backyard, which I feel is a pretty nice feature of the property currently. I feel like having someone living in your backyard would turn off more potential buyers than it would attract, but perhaps I'm wrong.

We want one because we are probably going to have a multi generational household at some point.

Or as an office space for smaller house. If I had alley access I might consider having someone living back there.

Where I am it triggers a full tax reassessment as well.

[skaredshtles]

What do you RE experts think about building a separate ADU on a property to increase the value? My wife thinks it's a good idea and would really increase the value of our house. I'm not so sure it would offset the expense of building it. Not to mention greatly reducing the size of our backyard, which I feel is a pretty nice feature of the property currently. I feel like having someone living in your backyard would turn off more potential buyers than it would attract, but perhaps I'm wrong.

I'm no RE expert - but FTS.

[The AD]

If I had alley access I might consider having someone living back there.

That's one of the problems I have. No alley, so access to the ADU would need to be along the side of the main house.

[Danno]

Just guessing, but I doubt a permitted ADU would increase the value enough to offset the cost of construction. That said, ADUs provide many benefits beyond property value. If the jurisdiction allows, they can be rented short or long term and offset the cost of construction that way, or could facilitate your MIL to move in.

[The AD]

We're planning on moving within the next few years, so I don't think we'd be recouping much before then in terms of rental income. It would allow my sister-in-law to sell her house, though, and she could live there until we decide to sell. But primarily the rationale needs to be that it would increase the value of the house when we decide to sell.

[XXX-er]

IME a good basemnt suite is $$$$$ its all about the income for the lowely pensioner/ ski gentleman

[RoooR]

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.

Wait, I thought we had to keep SFH zoning to PROTECT property values. At least now people are admitting that when a neighborhood starts to become higher density it has an increasing effect on surrounding property values.

That person should absolutely sell. Maybe they can use a portion to buy one of the condos next door and put the rest in the market. Or buy 2 condos and rent one.

You really wanna piss off some boomers, but unleash the power of the market and see some major development: we should change tax assessments to only consider the underlying land value. Six unit condo and SFH on same size lot next to each other should pay the same total property tax. Encourages development, encourages growth, encourages density in downtown areas.

[Tips^Up]

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

You've made nothing.

Unless you sell, or do a cash out refi. Plus you've got to subtract 6% selling costs. But the appreciation lately for existing homeowners is kind of exciting. Home values bouncing like BTC or GME.

[liv2ski]

Once again....the rich man claims he is "middle class" and refuses to pay his "fair share" to the community.

I had no idea how strongly I was crushin it. Look at the haters lining up to hate. Fuck, gotta go tell the wife we are RICH per the TGR brain trust.

[RootSkier]

Wait, I thought we had to keep SFH zoning to PROTECT property values. At least now people are admitting that when a neighborhood starts to become higher density i

I am veeeeery curious what you do in MSO. Does your job have anything to do with these issues, or is this just an area you think about a lot?

FWIW, I almost always agree with you.

[kathleenturneroverdrive]

We're planning on moving within the next few years, so I don't think we'd be recouping much before then in terms of rental income. It would allow my sister-in-law to sell her house, though, and she could live there until we decide to sell. But primarily the rationale needs to be that it would increase the value of the house when we decide to sell.

Sounds like you're losing out on the best part of an ADU (income production) in hopes someone else will value that so highly they'll cover construction costs + your profit. Seems like a huge gamble to me. I would think there are many safer things (like buying an actual rental property) to make a profit off the $ it would take to build an ADU.

[XXX-er]

The neighbor built one of the 1st legal 1 bdrm laneway homes onto to her garage, i took a tour and it was on the small side but would serve a purpose for someone very new to town, being a town counselor/ ex dirt pimp/ background in planning she had to go according to all the rules, I havent talked to her since completion so I'm not sure what it all cost.

being a desirable place to move its really hard to find rental accommodation so the town seems to be into alternative housing like that ^^ laneway home, for shops and commercial places down town/ small town if a reno or new building includes a residential space they get 5 yrs of tax breaks. So for a new HW/ building supply that cut their total tax bill in half so they saved 12k on taxes and of course they get the rental $$$, there are residential spaces going in above all the shops down town, the side benefit is more people down town all the time making it a nicer place to be

I have twice bought houses that already had the suites built so just move in and start collecting rent

[Toadman]

This is the crux of it.

The old widow who had the property bought up around her and developed to its "highest and best use" whose property is now worth 10x what it would be otherwise did not lose, she WON. If she really wants to stay in the house she has lived in all her life then call 1-800-Rev-Mort.

nah, she lost because she doesn't care about the home appreciation. She just wanted her nice quite, low density neighborhood. Besides, she's going to die in her house and will the estate to her 10 cats.

[Conundrum]

Being forced to move because you can’t afford a house you already paid for doesn’t seem like an upper class problem to me.

[AdironRider]

[The AD]

Sounds like you're losing out on the best part of an ADU (income production) in hopes someone else will value that so highly they'll cover construction costs + your profit. Seems like a huge gamble to me.

See, that's what I think. I'm pretty confident my wife wouldn't want strangers living in our backyard, but for some reason she thinks this would be desirable to a potential buyer.