Real Estate Crash thread

[FussyDutchman]

Think about it for a moment. Your family income is $1M a year, so you have a primary and a couple of 2nd homes. The new tax bill limits deductible interest to a $750k loan amount and $10k for SALT. Your property tax bills are closer to $80k a year and you have $2M in mortgages that you can't fully deduct anymore. Ya, I think that will make a few people sell the 2nd home of which my hood has plenty of.

Not only sell but the super rich are now donating them for the tax benefit. When you donate you get full appraised value which on high-end properties can be significantly more than the eventual sales price. Through work I recently looked at two 2nd homes that have been donated in the last year, 1 in CT appraised at $950k and one in NC at $2.6mm and there were several commercial properties the same company had purchased that we didn't even review.

[wickstad]

We had to buy another residence to store legos in January, 2019. We paid three times as much as we paid for the exact same unit in 2003. Gladly.

[summit]

Fuck! On top of cranking our property taxes 10% in the local elections, just got a new valuation up over 20%... county money grab! Fuckers! So my property taxes just went up 33% in one year!

Cue the renting locals who voted for this bitching bout their increased rents...

(I don't give a fuck that my place is worth more cuz I just want to live here for a couple more decades. From my point of view, it's a rent increase.)

[liv2ski]

That is the great thing about Prop 13 in CA. Sure the taxes are high when you buy at 1.2% of the purchase price, BUT then they go up so little each year, that if you own RE forever like we do, well hell, then your neighbors are all bent outta shape because your property taxes are so low compared to theirs. I can't help my taxes are based on $250k and yours are based on $2M you fuckwit. You shoulda stayed in your last home if you didn't want your taxes to go ski high from buying here.
Prop 13 FTMFW!

[Ted Striker]

Until your company (or new employment) forces you to move.

[summit]

Until your company (or new employment) forces you to move.

They can't and I won't.

What happens when I'm old have to sell my place because I can't afford property taxes?

[spanky]

Fuck! On top of cranking our property taxes 10% in the local elections, just got a new valuation up over 20%... county money grab! Fuckers! So my property taxes just went up 33% in one year!

Cue the renting locals who voted for this bitching bout their increased rents...

(I don't give a fuck that my place is worth more cuz I just want to live here for a couple more decades. From my point of view, it's a rent increase.)

What was the reason for the increase in valuation? If it was a town/county wide reval, the tax rate may have changed too.

[summit]

What was the reason for the increase in valuation? If it was a town/county wide reval, the tax rate may have changed too.

10% tax rate and 20% valuation increase (insane increase) = about 1/3 total increase

[Danno]

What was the reason for the increase in valuation? If it was a town/county wide reval, the tax rate may have changed too.

In Colorado, by statute they have to do a new valuation every 2 years. And everything has been going up in value.

[Danno]

My valuation was increased by $80k. Will appeal.

[spanky]

OK. So I’m assuming if everyone’s valuation is increasing, the town/county total budget isn’t increasing at the same rate. Therefore, the percentage tax rate should theoretically go down.

[summit]

I'm going to appeal. According the assessor, my place has gone up 100% in 22 years, but 20% in the last 2 years. Bullshit! Appeal! Danno any tips?

[Ted Striker]

They can't and I won't.

What happens when I'm old have to sell my place because I can't afford property taxes?

I was replying to L2S.

I sympathize with you, I'm in the same boat.

[Danno]

OK. So I’m assuming if everyone’s valuation is increasing, the town/county total budget isn’t increasing at the same rate. Therefore, the percentage tax rate should theoretically go down.

Theoretically. But doesn't seem to happen that way.

[Danno]

I'm going to appeal. According the assessor, my place has gone up 100% in 22 years, but 20% in the last 2 years. Bullshit! Appeal! Danno any tips?

It's all data driven. Go on the assessor's site, find the list of comparable sales, pick the ones most beneficial to you. Make any argument you can think of for why your property is worth less than they say. Don't complain about how it's gone up so much or complain at all. It's data. Use their data to demonstrate that their data determination is wrong. I've appealed 4 or 5 times, been successful (at least partly, saving a few bucks) every time except the last one.

[Benny Profane]

Oh right, brain fart on my end.

I still think it isn't the primary driver. SALT wasn't a credit and even in places like New York, with 3+ percent effective tax rates on property, you are talking about 20k net cost, and that requires a home valuation of 3.5 million. 20k isn't shit when your household income is approaching a mill a year to afford that place.

SALT is killing the already fragile high end market here. Just killing it. And, the owners aren't making a million, they just watched these homes appreciate for a few decades, and are now stuck with the valuations.

[Shredhead]

What happens when I'm old have to sell my place because I can't afford property taxes?

In CO, you get $100k homestead exemption at 65.

CO has three levels of appeals. The first two, homeowners can file themselves, the third you need professional representation.

I hired a RE appraser and successfully argued a historical designation on my Victorian, reduced my market value by 50%.

[Name Redacted]

Fuck! On top of cranking our property taxes 10% in the local elections, just got a new valuation up over 20%... county money grab! Fuckers! So my property taxes just went up 33% in one year!

Cue the renting locals who voted for this bitching bout their increased rents...

(I don't give a fuck that my place is worth more cuz I just want to live here for a couple more decades. From my point of view, it's a rent increase.)

Hey we gotta pay for "Affordable Housing" to support our community, and subsidize schools for all those families that will live in the housing. Actually, it'll probably all go to more cops on HWY6.

[Foggy_Goggles]

Hey we gotta pay for "Affordable Housing" to support our community, and subsidize schools for all those families that will live in the housing. Actually, it'll probably all go to more cops on HWY6.

A lot of truth there. I'm assuming that my taxes will go up substantially. I'm OK with the concept but have a problem with what takes get spent on. For example, our rec district is buying the bowling alley/movie theater. WTF? I'm subsidizing bowling and movies for people on vacation? I better get a discount like a do at the golf course.

Re: affordable housing. Ya'll know I think it is a form on corporate welfare. Here is the biggest joke. If you meet the qualifications for affordable housing (work for the schools/country, local, income etc.) but you loose the lottery and decision to puchase a free market property you still have to pay the real estate transfer tax to pay for the affordable housing that you qualify for. Makes sense.

[Name Redacted]

Fuck! On top of cranking our property taxes 10% in the local elections, just got a new valuation up over 20%... county money grab! Fuckers! So my property taxes just went up 33% in one year!

Cue the renting locals who voted for this bitching bout their increased rents...

(I don't give a fuck that my place is worth more cuz I just want to live here for a couple more decades. From my point of view, it's a rent increase.)

BTW ours went up by $45K too, still below what it was appraised for 3 years ago. No real reason to contest for us this time.

ETA: just going through a bunch of real estate stuff we got and SFHs are up 28% just over 1Q of last year. Consider yourself lucky, and stop voting for tax increases. We actually live in a pretty decent place for property taxes anyway. But the trend is to tax more, for progressive agendas.

[neufox47]

Not only sell but the super rich are now donating them for the tax benefit. When you donate you get full appraised value which on high-end properties can be significantly more than the eventual sales price. Through work I recently looked at two 2nd homes that have been donated in the last year, 1 in CT appraised at $950k and one in NC at $2.6mm and there were several commercial properties the same company had purchased that we didn't even review.

Talked to a colleague who is doing a bunch of these and captive insurance defense. He is also a Forensic Accountant. IRS somehow found money to investigate captives and they are going at them as fraud cases. For those that don’t know captives are insurance companies setup solely for insuring an individual or companies own risks. It allows one to put money into it as premium and consider the premium an expense and deduction from income. Money can accrue tax free as long as they can reasonably say it is to offset future losses.

[fastfred]

Fuck! On top of cranking our property taxes 10% in the local elections, just got a new valuation up over 20%... county money grab! Fuckers! So my property taxes just went up 33% in one year!

Cue the renting locals who voted for this bitching bout their increased rents...

(I don't give a fuck that my place is worth more cuz I just want to live here for a couple more decades. From my point of view, it's a rent increase.)

people are so obsessed with their property value and how much it goes up, it's to the point of stupid these days
sure my house is worth a fortune but who cares, it's my house not a cash register

the point is, average length of homeowner ship in summit county is in the range of 6-10 years, which I thought was a lie, but it's not
so all these people are obsessed with getting as much appreciation and then dumping it, you figure the average "locals" life span in summit county is 2-3 years it all makes sense

you and I are in the same boat, I"m not selling, been in my house a long time, even if I do bolt my finanical advisor (dad) told me to hold on to the house no matter what
all these old timers who bought a long time ago and still live in their house................ crazy but once you sell it's apache junction or bust for some cheap warm living

[goldenboy]

Summit- If you have any real estate agent friends, they should be able to help you find some good comps to contest your valuation as well...

[habituallybored]

I've appealed 4 or 5 times, been successful (at least partly, saving a few bucks) every time except the last one.

My experience as well. I have no clue why you wouldn’t appeal every time. It seems obvious in my area that they assess at the high end. I just open Zillow, look at houses sold the past year, pick 5, and send it in. It usually results in $500 less in tax for that year for 7 minutes of effort.

[Danno]

Summit- If you have any real estate agent friends, they should be able to help you find some good comps to contest your valuation as well...

IME, he probably doesn't need any such help. The assessor provides the full list of comps that they could have considered, and the reality is that as a realtor, you're trained to find real comps, as in the ones that most accurately reflect the true value of a house if it were on the market. But in this exercise, that is not what Summit wants to do. He wants to find the most similar properties that sold for the lowest amount in the specified time period.

A realtor here on Nextdoor was advertising that he could help with tax appeals for free (I assume he's trying to build goodwill) but it wasn't very useful to me. Because he was trying to pick the best comps to determine my house's value, whereas in this process you don't want to determine the actual value, you want to determine the lowest value that you can support with comps.