The incredibly high cost of construction and more open attacks against Prop 13. California housing takes a turn. Â
There is now a concerted attack on Prop 13 as people with two ounces of common sense realize that no, grandma isn’t being kicked out onto the streets because property taxes are going through the roof. In fact, there is now evidence highlighting what we all knew and that is Prop 13 is a gift to the “I got mine so screw you†generation. For example, the majority of people that inherit Prop 13 homes essentially use them as rental homes or second residences. The issue with this system is that say you buy a crap shack in San Francisco today, it is very likely that you will pay 5, 7, or even 10+ times the amount in property taxes as your neighbors. No one likes taxes. And what is odd is that states like Texas, a state that no one can argue is “liberal†has some of the highest property taxes in the country. People selectively choose which taxes they like and don’t like. Prop 13 sucks when you don’t own but then if you do buy, your incentive is to keep the rate as low as possible. And then you have the incredibly high cost of construction in California. So of course builders are only focused on high-end homes or rentals where they can make their money back.
Prop 13
The L.A. Times has a piece on Prop 13:
“(LA Times) In Los Angeles County, as many as 63% of homes inherited under the system were used as second residences or rental properties last year, according to the Times’ analysis. A similar trend was found in a dozen other coastal counties. Prime vacation spots in Sonoma and Santa Cruz have some of the highest concentration of homeowners receiving the benefit.
The inheritance tax break, The Times has found, has allowed hundreds of thousands — including celebrities, politicians, out-of-state professionals and some of California’s most prominent families — to avoid paying the higher taxes owed by newer homeowners. The tax break has deprived school districts, cities and counties of billions of dollars in revenue.â€
As homeownership gets more elusive in California, you can rest assured that Prop 13 will be under attack. And we are now seeing more press on this. And of course the cost of building homes in California is expensive because of NIMBYism and other factors. Take a look at this:
The actual cost of materials is going up but look at regional differences:
In Las Vegas and Phoenix building a new home might make sense. In Los Angeles or San Diego? Why would you do that if you are presented with the following cost constraints. We also have a need for higher density housing but of course NIMBYism makes this more difficult. And this is ironic because “free market†thinkers yap like little parrots regarding letting the market be free but love the following:
-Federal Reserve (which of course intervenes in the market)
-Prop 13 (which of course artificially keeps property taxes low in California relative to the nation)
-Mortgage interest deduction (government kicking some money back to you because of owning)
-Local and regional paperwork laws to make it hard to build new homes and construction
So much for a free market. So what we get are million dollar crap shacks and odd situations where neighbors can be living in very similar houses with massive differences in their tax bills. People want free lunches on all sides of the argument. There is a large push now attacking Prop 13 and this is something that has gotten louder over the last year.
In many high cost California areas, the majority of households are now renters. So expect this trend to continue.
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631 Responses to “The incredibly high cost of construction and more open attacks against Prop 13. California housing takes a turn.  ”
I have a friend who inherited her house (what a life she is having….no worries, no job, no car….the life of Riley) and her taxes are $1200 a year thanks to prop 13……I looked it up on Zillow. Central Anaheim. According to Zillow her assessed “value” of the home is about $70K….it was bought in the 60’s I believe and her grandparents set her up well.
Almost everyone I know is just waiting for mom, dad or the grand parents to die so they get the house……..these are older folks working menial jobs or acting as caregivers……it’s the only way to afford a home in socal.
A house needs to cost about $200K based on the incomes of 99% of the people I talk with……okay, so yeah I do know one guy that’s a dentist and he’s doing well.
The sad part will be when the Millenials finally find out their parents took out reverse mortgages and they get squat.
womp…womp
Its pretty darn hard to get a reverse mortgage now…maybe some of the mortgage brokers on this blog can weigh in?
Reversed mortgage ….muhhahaah
Keep dreaming
This is true, reversed are administered by FHA and do have a lot of newly enacted restrictions.
Recently the loan to value was cut and there is an income analysis that must be done to verify the borrower can carry the taxes, insurance and other non mortgage debts. It has definitely taken a large bite out of the reverse market.
The people you talk to obviously do not represent the real puchasing power out there
clearly. But do we know for sure where all that purchasing power is really coming from? I’m having a hard time understanding how it’s all from incomes and when the next correction comes i’ll be interesting to see how this plays out.
my guess is, same game, different players……
It does not matter. Even/when crarsh/correction plays out -> these same people won’t be able to afford just the same as they are now.
People think that crash will improve affordability…it is lack of general affordability that that might drive price reduction (aka no loans, no jobs, etc…)
Great news from the east coast. Sharp drop in prices for luxury apartments.
https://www.zerohedge.com/news/2018-08-20/luxury-apartment-sales-plummet-new-york-sellers-capitulate
West coast is next?
Also, if you are so hung-up on someone who got it easy through inheritance (and you are jealous), you can just pretend she got a lump sump (and also got it easy).
So, is this about prop-13 un-fairness? or general life un-fairness? (someone got it easier than you)??
LOL, Jealous? You think that’s what my comments are about? What happened to Americans? I’m not jealous of the fortune of others…….I will grant you that it is annoying watching these people piss it all away though.
Oh, and as another friend has mentioned to me (she inherited 2 houses) she is “house rich and cash poor” just like the first person I mentioned. Both people I mentioned here have nothing BUT those houses.
This IS about prop 13 and I pointed out examples on how it’s being used or dare I say abused.
P.S. Okay so I thought about it, I am not jealous of their house rich status BUT I am jealous of all the free time these people have……..neither of them have jobs and are quite possibly dysfunctional. The first girl has never had a job since I’ve known her (survives by having roommates) and the 2nd one can’t seem to keep one.
p.p.s. And I wonder how you’ll make this all about me ……… again.
Hey, interesting — jealous is the spin being put on not wanting to subsidize other people. Surge is twisting the truth of things here. Long time Prop 13 beneficiaries are being subsidized and want to keep their handout, so they’ll make up anything in a desperate attempt to promote a false narrative just like Millennial does with price crash agitprop. This has absolutely nothing to do with the fake spin word of jealous. They know this gravy train is coming to an end sooner rather than later.
interesting~
Of course, you’re jealous. You say so yourself:
“I am jealous of all the free time these people have……..neither of them have jobs and are quite possibly dysfunctional. The first girl has never had a job since I’ve known her (survives by having roommates) and the 2nd one can’t seem to keep one.”
This is all the doing of democrats. From uncontrolled immigration into citizen black neighborhhods. From useless government over reach in rent control. From overreach in permit fees up to 30% in some cases. The democrats zombie votes are to blame!
There are a lot of Dems that take the Wall St. handouts, but the Republicans are the true masters of the dark arts of being bribed by the financial elite. It was the Bush tax cuts that created the situation where rich people had too much $$$ and nothing to invest in regarding the real economy so they resorted to speculation and real estate investment instruments since RE always seemed safe. Without that elite liquidity bubble there would have been no demand for mortgage backed garbage and thus Countrywide’s ‘The Hustle’ where there borrowing test consisted solely of fogging up a mirror placed under one’s nose. Federal loans were only like 1 of 200 mortgage originations before the crash, so no it wasn’t Dems giving poor people government loans that caused this.
What should have happened was we should have let the banks fail and let anyone with a mortgage from such subsequently own their home free and clear afterward.
What should have happened was we should have let the banks fail and let anyone with a mortgage from such subsequently own their home free and clear afterwar
NOT!
That would be grossly unfair to people who’d paid off their mortgages.
We should not have bailed out the banks. Instead, the banks should have foreclosed on all who had defaulted on their mortgages, immediately, instead of letting them live there for years, rent free. The courts should have facilitated the foreclosures.
The banks rely on the houses as collateral for the loans. That’s what collateral is for. The banks should have repossessed that collateral, and nothing else. No bail outs.
Why all of sudden hate people that by luck inherited property. Anyone of us would love to be in their shoes. I can just tell you would be blowing your money on cars and fun if you had the same chance. And instead of saving for a second home to leave your kids you would be riding in a cool car. Yes the prices are high but that is due to extreme demand. There are better, cheaper places in the US to live if you cant afford CA. If you cant make it here, I would say move where you can. By the way, I did not get a free house from my parents. I lived in a 300sqft guest house for 8 years driving a 1993 paid off accord to come up with the large down payment. People nowadays feel almost entitled to everything without sacrifices. Either scale down spending or go back to college and make more money otherwise you will be a renter for life.
“People nowadays feel almost entitled to everything without sacrifices”
and that is exactly who I am/was talking about. I have no problems with people that earn what they have but these losers out here sitting on their collective asses waiting on their parents to die isn’t right. BUT what pisses me off is they act like the fucking earned it and deserve it
I had one of those inherited homes and sold it! People make this sound so great, but the folks better have had the means to keep those homes well maintained and updated. First, my Dad was ill for many years, then my Mom’s health declined. They did the minimum to their house overs 20 years, as their focus was on health issues. I did what I could when I was there to visit. It would have taken a total gutting, and several hundred thousand to do it all, and by the time I inherited the house, I was looking at my own retirement … drain my savings to renovate or sell for a huge amount! Easy decision as I had a relative who also inherited, did the renovation, and now has drained a large chunk of his savings to do so …
If you do your own work you will make buku bucks. But hire the roofing, not worth dying over.
Housing To Tank Hard Soon!!
I would probably believe it if you weren’t the one who said it.
keep dreaming Jim!!
Stay away from the weed
There’s no point in repealing prop 13 the same way there’s no reason to raise any tax in California. Those up in Sacramento will just find a way to spend it foolishly as they always do. In addition to lowering all state taxes I would suggest bringing everyone’s property taxes down and firing at least a third of our state government employees. Everyone will save (except the folks who just went on welfare).
I completely agree with you. Abolishing 13 isn’t going to lower anyone’s taxes. All it’s going to do is raise everyone’s taxes, and give the government even more money to waste. What new buyers don’t look at is that 13 will protect THEM down the road as well.
It is not as simple as repealing prop 13. We need to install a better tax control on government. I am a big supported of the dollar caped solution. No primary residence shall pay more than $X,000.00 per year, with the ability for it to rise no more than 2% per year. Remove all the transferring and inherited benefits as well.
Those under the cap will remain until they hit the cap. Those above will see a tax reduction.
It will cause prices to drop significantly which benefits us who want to get into the market for a reasonable price. More people will have to sell if their taxes go up. That’s a good thing because these people have been paying next to nothing while the younger ones have to foot the bill.
So Karin, you would be okay with equalizing property tax if it is done in a state budget neutral way? I mean: upping the tax for those who pay close to nothing, while simultaneously lowering the tax for those who pay a lot now? If so, you may be on the same page as Millenial after all.
Nice story by the way, the ten men going for a beer! I would say: split the bill like 10 dollar each, independent of who earns more or who lives longer in his property… What say you?
i like Henk Poell. I hope he posts more.
If anyone thinks that eliminating Prop. 13 will even the playing field, they weren’t in Jerry Kiddo’s State back when Prop 13. was passed…
All it will do is incrrease the Rentier’s percentage of RE holdings, as any middle class left owning property will be driven out of the state due to runaway property tax increases (NJ anyone?).
Gotta love how millennials continue to blame all their problems on those that came before, and continue to elect rhetorically proglodyte apparatchiks to tilt at the imaginary bourgeoisie…
Henk~
You obviously don’t read many (or any) of my posts. I don’t think property owners should pay any property tax whatsoever. Property taxes make us renters in our own homes. If we don’t pay those taxes, they come and take our houses. We didn’t have property taxes until maybe 60 years ago in this country; did you know that? In fact, the government was formerly able to support itself primarily on tariffs, and in addition, did not have the massive debt that it has today. Did you ever notice how the more we pay in taxes, the more in debt our governments become? That’s because the people that run this country, from the local to the national level, are entitled vampires that live on sucking the blood out of us. Let me repeat: our tax money is not being spent for the ‘greater good’, as they continually tell us in order to extract more and more assets from us. It is being stolen by the politicos and their crony allies.
Tax payment should not be a requirement for keeping something that is supposed to be “yours.” Conditional ownership is not really ownership at all. Either you have it or you don’t. If we do not own a stake in the property we live in, then you fork over power to government agencies who can throw you out and make you “homeless.” That’s tyranny. This issue is one of the major areas of concern for why the real estate bubble was such a problem and continues to be as we try to recover from it many years after the fact. Once a piece of property is paid entirely, no agency should be able to strip it from you after the fact.
My question for you, then: how is my stand on property taxes similar to Millie’s in ANY way? Go back and read my posts on this topic. Millie and I agree on nothing regarding property taxes. As for your claim that I would be okay with equalizing property taxes if it’s done in a state budget neutral way, where did I even come close to indicating that? You sure know how to twist things, as I cannot even remotely see where that comes from.
To Millenial~
Of course you like Henk Poell. He has his head in the same place you do.
Karin, another A+++ explanation about property taxes. I kept saying the same thing for years. It is amazing how many indoctrinated people are out there to fight against property rights. The crooked politicians laugh all the way to the bank! They deceived everyone that it is for the “greater good” without specifying that it is for their OWN “greater good”.
Lord B.@ “There are problems with kids in wealthy areas, but I’d rather deal with these problems then send my kid to a ghetto school where you are surrounded by gang bangers, low lives, non english speakers, etc. The chances of somebody thriving in that environment is very low…”
Lord, but the MSM and all the liberals in CA tell us constantly how much better is to have multiculturalism and how much more we are enriched by diversity. And here you state the obvious without being PC. Who needs those flyover places in the country with no multiculturalism and diversity???!!!!…..
Millie,
Unlike the others here, I agree with your assessment of Prop 13. Where I don’t agree with you is in the fact that you direct your righteous anger towards eliminating Prop. 13 instead of changing it. You miss direct your anger.
I agree with Karin, that there should not be any tax if there is no income – I call that confiscation of property and it is a feature of bolshevism/communism/collectivism. Whoever supports that is evil and want to benefit from the theft or is a plain idiot. There is no rational and excuse for property taxes. Even Switzerland, a far more civilized country than US, with better roads and schools than S. Cal has capped the prop. taxes at $1,500/yr. That is maximum; it is scaled down based on value and income. It is true that they don’t have multiculturalism and they are not so enriched by diversity like those in S. Cal., but that was their choice. The voters in CA made it clear that they want multiculturalism and diversity by electing politicians who do just that – their choice.
Again, supporting politicians who want property taxes is giving up your rights to your politicians and their cronies/buddies.
The whole debate should not be around Prop. 13. The whole debate should be around property rights and no taxation for unrealized income. The whole debate is about the government right to confiscate/nationalize private property, because that is the definition of property tax. Instead of debating how fast the government should nationalize private property, we should debate where in the Constitution the government has the right to nationalize and tax property. Otherwise, the whole discourse is summed up in – should we nationalize in few months like the Bolsheviks, few years like Illinois and NJ, or a little bit slower like in CA.
If the debate would be focused on the right issue, there would be no need of Prop. 13.
If people would have more disposable income (no prop. taxes), they will be more spending and more sales taxes. Sales taxes and income taxes should be enough for any decent government to take care of schools and roads, like Switzerland proves very well for anyone visiting there. It is a matter of spending, not taxation.
Karen, read your reply, in which you state again that you’re very much opposed to property tax. Next, you avoid to make a real statement regarding the main question I have for you namely: “given the existence of property tax, being good or bad or ugly or even extremely rotten, would you support having John and Jack both pay $2000, instead of today’s $100 and $3900, if they have equal houses and living situation?”. So it is not about this tax being appropriate, just about how it is divided. Would you care to give us your answer?
Now about your property tax / govt spending concerns: I agree with you that governments should step back and downsize. Lower taxes are good, libertarians are right about that. Personally, I think that if you tax, it should be in proportion to the benefits you get from the government spending it. So, a road/car/fuel tax that goes up with the weight of the car may cover infrastructure spending. Import tax should cover harbor authorities. And surely, the more property you own the more benefit you have from a bunch of government services – a homeless guy does not care if the police protects houses. So I would say a property tax is appropriate. Income tax is, IMHO, more debatable. After all, how much extra money is the state or nation really spending on your high salary?
Sincerely,
Henk Poell
Yep, most agree with my prop13 assessment. Only those that benefit from the current scam do not agree. They want to keep their subsidies. Karin is different.
As far as higher taxes goes….every country has fairer property tax laws than California.
California is broke. I don’t see a tax cut. What needs to happen first is that we stop the wealthy and some boomers getting a freebie. Once everybody pays their fair share we will all be on the same page.
“Yep, most agree with my prop13 assessment.”
Then why is it still in the constitution?
Change doesn’t happen overnight. That’d Be too easy. Prop13 will repealed just a matter of time. Same with the RE crash. Just a matter of patience and discipline!
Flyover~
Thank you. You and I are in sync on quite a few issues on this blog. Good to see someone else who is awake to reality.
Henk~
I avoided nothing in my answer. I do not believe that my property should be taxed, period. I already pay more than my fair share in income taxes, which represents money that is actually streaming in – unlike what I receive from a property that I live in. My house doesn’t give me money to pay property taxes unless I sell it, at which point I cease owing property taxes anyway. Regarding my income, if I make more, I pay more – unless I’m an inside crony, of course, and get a waiver.
As for how I would allocate under the present system, I do believe in protection against having to pay unlimited taxes on your property. I know many older folks that would have lost their houses without the Prop. 13 cap. Pre-Prop. 13, you qualify under one income, but due to raging inflation manipulated into the currency by the big bankers that run the Federal Reserve, your house’s value on paper goes up multiples, and you get taxed way beyond what you originally signed on for, and often way beyond what you income can support. And your house produces no additional income to pay for it. For many, the only way to pay the taxes owed was to sell the house. And then what? A lot of retirees are on fixed incomes, and in the last decade plus, interest income from the banks is practically zero. Do you expect an 80-year-old guy to get a job to pay those taxes? No. But if YOU come along and can afford to buy at the most recent very high price, that means that you can qualify to pay the mortgage and the property taxes. Under 13, you then have a cap on how much your taxes go up as well, just like the 80-year-old retiree. Remember, you’re making today’s income, not the fixed income of someone that finished their career 40 years before you got yours started.
Don’t you get that?
What you’re advocating for is to give more money to a wasteful and criminal government, who never spends our tax money on us anyway, other than a few token gestures. I worked for the State Department of Transportation in California for 30 years, up until last year. It was like watching sausage being made. Knowing how my money was being misspent was like having my face rubbed into a giant turd every day I went to work. I am not kidding. And our State government is like Mahatma Ghandi next to places like Illinois.
Thank you Karen for clarifying your position. As I read it, you want to keep the tax for 80-year old people low, as one cannot expect him or her to start working again. For the government to get enough property tax (yes, they waste too much of it but that’s not the issue when it comes to the distribution question) they have to double it for other people. So according to you, millennials have to subsidize the elderly.
Hey wait a sec… isn’t that your 10 guys getting a beer story all over again? The moral of that story you told here was about how unfair it is to let the same people pay for others each and every time, and the others not being fair to the ones paying it all… But when it comes to your situation, where you are being subsidized, your arguments magically reverse! Well it’s your opinion, you’re entitled to it, but I really don’t see any sense of fairness in it. If the guys in the beer story do not have the cash to pay, they should not drink, and if people don’t have the money for the upkeep of a house they should move to some less expensive place. No matter if the upkeep is maintenance, tax or anything else.
Something else from the anti-tax front: splitting the tax very unevenly makes it easier for governments to up it… Did you realize that? All the people who are basically exempt from it will tend to support the government every time the tax goes up. Why not? Even if half the money is wasted, some of it might pay for some services. Divide and rule, supported by the likes of you.
Sincerely,
Henk Poell
Henk~
None of what you wrote makes any sense, nor does it connect soundly with what I wrote. You obviously didn’t understand my points. I was going to address your comments, but it would be a waste of my time as it’s obvious you wouldn’t make an attempt to understand this either.
You also didn’t get my story about the 10 drinkers. To quote the ending:
“For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.”
I believe Henk is saying that your beer example obviously makes sense.
If someone is receiving the same beer or service, then they should all pay equal amounts for the same beer and service.
By that argument, Prop 13 is not fair since the older homeowners pay much less than the newer homeowners.
Karin’s other argument is that we all pay too much. It would be like the bar charging $20 per beer to fix the leaking roof or a broken driveway. The older people have been paying for beer much longer so they should only pay $10/beer.
The bar manager was the smartest, he was a Republican and borrowed millions against the bar and gave each of his customers $10/beer in bar credits and he went on golf trips to his resort at Mar Lago and deducted the entire amount from his taxes.
Bob~
You don’t remotely get any of my points either. I would explain them yet again (for maybe the 20th time), but if you haven’t understood what I’ve been saying by now, I doubt my further explanation will register with you.
I find myself posting (or even reading) on this blog less and less. There are some pretty sharp bloggers on here, but they are in the minority.
Karin, Please explain again for us dull people. 🙂
If this helps, I agree with you about Prop 13 and why it should be kept for senior citizens or people on fixed incomes.
Unfortunately, I think this makes you a closet Socialist. Sorry.
If this makes you uncomfortable, please explain.
Karin, Please explain again for us dull people. 🙂
If this helps, I agree with you about Prop 13 and why it should be kept for senior citizens or people on fixed incomes.
Unfortunately, I think this makes you a closet Socialist. Sorry.
If this makes you uncomfortable, please explain.
Karin,
I believe I understand you perfectly. You simply want to avoid paying more tax. Very human behavior. And as you are probably above average intelligence, you do not say: “I I I me me me wanna keep paying lower tax then the rest” as it would display a certain egoism… So you say: “instead of upping my tax, it should be lower for everyone”, which sounds very sweet and social. And in the end it is never going to happen, so your reasoning protects both your financial interests and social appearance.
I’m from Europe so the outcome doesn’t effect me, but… something always draws me to this website 🙂
Hey, Bob, “Those up in Sacramento” that are the problem are the legislators that you in Inferior California elect and send up here to ruin everything. Get the pole out of your own eye before you complain about the good folks of Sacramento. (And stop stealing our water!)
I do agree that the pols that you and your neighbors send up to the state capitol would piss away any extra money they can squeeze out of Prop 13, plus use a good portion of it to put the Golden State deeper into debt.
As for Dr. Housing Bubble’s gripes about Prop 13, of course grandma isn’t losing her home today–she’s protected by what’s left of Prop 13! (Duh.)
Prop 13 was intended to resolve a problem that began in the 1950s yet the legislature (remember, they’re the people the voters of Inferior California have stuck us all with) fiddled around and refused to fix it. Instead, for decades that legislature would toss the voters a quickie
Band-Aid patchbribe to head off a more comprehensive fix brought to the voters by citizen initiative.The situation came to a head in the mid- to late-1970s. Yes, I was alive back then and I knew young adults back then whose grandmothers had literally lost their homes because the taxes on their homes had skyrocketed so much that their annual property tax assessment was higher than the original purchase price of their home! I can’t honestly call such literally confiscatory tax rates ‘fair’. I don’t know how Dr. Housing Bubble can.
When I voted for Prop 13, I knew that it wasn’t a perfect solution to the inflationary crisis of the 1970s and ’80s but it was the best proposal on offer. (Does anyone else remember then-Assembly Speaker Willie Brown–an immigrant from Texas, BTW–saying that if Prop 13 failed, he would take it as a signal from the voters that we don’t feel we are being taxed too much?) I figured that 30 or so years down the road, Prop 13 would itself require reform or replacement but I was willing to leave that problem to the voters of 30 years later.
Instead of comprehensive property tax reform to address the appearance of unfairness that has built up in Prop 13, the Democrats that Inferior California has sent up to the statehouse have simply been greedily eating away at Prop 13’s protections, all to feed their hunger for Other People’s Money. (When was the last time you heard your preacher expound on the sin of coveting–whether it be thy neighbor’s goods or thy neighbor’s spouse? Yeah, I can’t remember either.)
Anyway, Dr. Feel Good’s rant here isn’t a serious argument for comprehensive tax reform in California, including reform of property taxes. Dr. Feel Good is ranting that the fortunate who moved to the Golden State earlier are advantaged over those who blew into town yesterday. Or that the successfully frugal homebuyer is advantaged over her less frugal counterpart. Or that those who bought in communities that became very attractive later were fortunate to do so. Envy is a deadly sin, is it not? California has enough sins from her sinners already, Dr. Housing Bubble, don’t add more.
According to Zillow: “Essentially, it’s a sellers’ market if the local inventory is sufficient for less than five months’ worth of sales.” In Orange Co., where I live, there is currently a 57 days supply of homes for sale below $750,000 and a 76 days supply for homes for sale between $750.000 and a million dollars. Both are well below Zillow’s definiton of a buyers’ market being over a 152 day supply. Real estate bears will have to wait and hokpe because there is no sign of a crash at the moment.
We need to keep Prop 13. It is more important than ever now that SALT deductions are limited to $10,000. I can’t believe how stupid many of those posting at this site are. They are begging to pay more than 1% in property taxes. “Please tax my home at more than 1%,’ they demand, “because that would be fairer.”
Prop13 is the biggest scam in history. It’s purpose is to screw the younger generations by putting the tax burden solely on them. Older folks pay next to nothing. Plus older people benefitted from the bubble. Younger people did not. Prop 13 needs to repealed. People love government subsidies and freebies as long it’s only beneficial to them. It’s like the good Dr said….Screw everyone because I got mine. Typical mentality of the boomer generations. End prop13 and the bubble ends tomorrow. Have them pay their fair share….it’s way overdue!
Prop13 is the biggest scam in history. It’s purpose is to screw the younger generations by putting the tax burden solely on them.
Why do you post lies? You KNOW that younger generations benefit. They benefit when they inherit their folks’ houses.
You KNOW this because YOU expect to inherit. You said so many times.
You ARE just a troll, aren’t you? You post stuff that you know is false. Stuff which you wouldn’t support if your life story (as you represent it) is true.
“End prop13 and the bubble ends tomorrow.”
So there’s no bubble in the northeast where taxes are 2%+ of current value?
Not sure what my inheritance has to do with the fact that millennials have to pay 8-12 times more than some older folks? Prop13 has to go and older people have to start paying their fair share.
Maybe Our Millennial is an idealist who believes in equity for all.
Prop 13 is not “an equity for all” amendment.
1) Inheriting your parent’s (or grandparent’s) tax base from the 1960’s or 1970’s is not equitable.
2) Having a 2% cap on tax increases is not equitable for all. Even Social Security has a inflation indexed increase. When in the 1980’s under Reagan, people were getting 14% increases in wages and Social Security. Yet their Prop 13 taxes were capped at 2%. When retirees on Social Security are making out like bandits, that means the government subsidy is unfair to all. Prop 13 should follow the US government inflation rate covered by Social Security.
3) Corporate taxes are also covered. Many companies live longer than people. If they can’t make it in a free market unless at the expense of our schools, fire, police, then they shouldn’t exist.
So unfair! As our current President would say.
Those old people have been paying property taxes for decades, Millennial.
When are YOU going to start paying your fair share ?
Millie, read my reply to Gary.
Funny thing about Prop 13 – it didn’t exempt parcel taxes that the voters pass. In the last 24 years taxes on our home have doubled – from $1,840 per year to over $3,600. Even with the Prop 13’s limited 1% annual increase, our property taxes have been going up 3% per year.
Tenants aren’t “exempt” from Prop 13 either, unless some rent control ordinance provides the “jackpot” of limited rent increases for ever. In which case, the property will become a deferred maintenance nightmare.
We pay a lot of money in property taxes for lousy public schools. We don’t have any children going through the system. Perhaps addressing the cost of educating children, in addition to the corrupt public pensions which are a total ripoff of the tax paying public.
Begin with responsible management of public funds, cut government spending. Prosecute corruption. Public employee unions are responsible for massive bribing of elected representatives – but campaign reform is hardly a topic anyone can talk about.
Yeah, Millie, and if you ever buy a house, you’ll appreciate the protection Prop 13 gives you 20 years down the road. You don’t think long term. Plus, if Prop 13 is eliminated, you won’t be paying less in taxes. Your neighbor will just be paying the same as you, giving politicians more money to steal or waste. And based on recent history, those higher tax revenues aren’t going to go into useful infrastructure unless it benefits politicians and their friends, like the high speed rail in California.
End prop13 and the CALIFORNIA bubble ends tomorrow.
Corporate taxes are also covered. Many companies live longer than people. If they can’t make it in a free market unless at the expense of our schools, fire, police, then they shouldn’t exist.
Prop 13 companies don’t make it “at the expense of” schools, fire, and police. The latter don’t have any right to anyone’s tax dollars. It’s “We, The People”‘s decision how much we wish to pay teachers, firefighters, and police.
As for myself, I think teachers, firefighters, and police (and all govt employees) are way overpaid. Especially with their lucrative overtime and health & pension plans.
I’d me more willing to slash Prop 13 benefits, if there was a concurrent slashing of govt employee pay and benefits. Maybe cut all health and pension plans by 50% (at the very least).
Karin,
I mostly agree with you except when it comes to prop13.
I do not want to subsidize someone else’ freebie. I don’t want to pay multiple times more in property taxes than the guy next to me. We should be paying the same.
I do not care what politicians do with our tax money. Politicians can’t be trusted as we all know.
My property taxes (if I buy now) are already sky high. Thinking about the situation in twenty or thirty years doesnt help to resolve the current issues. The issue is that new buyers (mainly millennials) have to pay multiple times of what older people pay-for the same house/same services.
Why can’t we all pay .5 percent of market value instead of 1.1? Increase the taxes for people who enjoyed the freebies for decades and lower taxes for new buyers.
The problem with that is that boomers are an entitled, selfish generation. They are spoiled and think they deserve these freebies in paying next to nothing in property taxes.
Millenial,
If you decreased property taxes from 1.1% to 0.5% the vast majority of current owners would be paying far less in property taxes than current.
Just do a simple calculation on people who bought in 1990 and have owned for almost 30 years. In fact if you actually get the crash you want those people will be paying more in property taxes than you. Not only that but they paid property taxes for 30 years and built the community you will be buying in…. while you did jack crap.
Trust me on this, you want Prop 13. Most people own a home for 5 years or less. The Prop 13 inequities are really very minute when you look at the big picture. The key for you when you buy is to make sure Property taxes can not go up at will. I have lived places where this is the case. There are areas of the country where house prices have inflated dramatically despite 2-3% property taxes. If you eliminate Prop 13 watch out for the unintended consequences. I can promise you it won’t work out the way you think to your benefit.
Tank in sight,
WAIT WHAT???
“If you decreased property taxes from 1.1% to 0.5% the vast majority of current owners would be paying far less in property taxes than current.”
the vast majority? Dude, do you know how many people living in million dollar homes pay next to nothing? Here a guy from my family: lives in a multi-million dollar home and pays less than 2500 dollars in prop taxes. He inherited it.
if he pays 0.5% of current market value it wont break him. I PROMISE YOU THAT.
0.5% of 3 million dollar is 15,000 dollars in taxes. He gets an absolute freebie as of now. 15k is not even that much and this guy would not even feel it but its a lot more than 2500. Plus it would lower the taxes for new buyers like myself. For that 700k condo i would only pay around 4k. This is how easy and simple you can fix this mess. The millionaire will finally pay closer to what he should and younger buyers would get a break. Just how it should be.
And I dont care if poorer people pay less…..if you have it equal for everybody (0.5% of current market value) a LOT of people who received freebies finally start paying something! If you think that paying 0.5% in property taxes means the vast majority pays less than you should support my proposal, no? Arent you for lower taxes??
Older folks were once young folks too. They paid 1% of the purchase price in the first year, 1.02% in the next year, 1.04%, 1.08%…. It is a fair system, like accumulating seniority over time.
Millenial,
You are talking about a very small percentage of people, less than 2%.
However one thing we can both agree on is that inheriting property taxes is wrong.
If you actually looked at people who bought in 1990 who still own the home (which is extremely rare)…. you would see they pay about 80%-90% of current market and paid it for 30 years at 2% per year increases. If you get you crash you will pay less than them. They built the community you will be buying in.
Why should property taxes increase more than inflation? Trust me you don’t wan the unintended consequences of eliminating prop 13. Just look at the areas in the country with inflated property taxes and 2-3% property taxes. I can assure you if they eliminated prop 13, taxes would not be 0.5%… but sign me up LOL
Doug,
“They paid 1% of the purchase price in the first year, 1.02% in the next year, 1.04%, 1.08%…. It is a fair system, like accumulating seniority over time.”
Yes…..they paid 1.1% of a very cheap purchase price. We have to pay 1.1% of current inflated, bubble prices….which translates into several thousands of dollars more a year in property taxes…for much less house!
Tank,
“If you actually looked at people who bought in 1990 who still own the home (which is extremely rare)…. you would see they pay about 80%-90% of current market and paid it for 30 years at 2% per year increases.â€
Show us an example!! My bet is you won’t
Socialists aren’t very good with math. Or logic. Their only concern is making sure that anyone more succesful in life than they are is punished.
This is the mentality of a Democrat today: I can give you $100 and your neighbor $200 or I can give each of you $50. They’d rathe lose out on $50 as long as their neighbor loses out on $150.
Socialists like being subsidized by others. Prop 13 is a subsidy program. You’ve got it backwards.
And there is no basis to your example. Under what scenario would the benefits of $100/$200 be reduced to $50/$50? Liberals may have problem with math, but this seems no more than pulling numbers out of one posterior to reach some pre-determined conclusion.
Dan,
Look at tax cuts as the best example. The typical leftist middle class worker got $2K back in taxes. But he hated the tax cuts because evil Mr. Rich White Guy got $50K back. The leftist would rather have $2K less money if it means the rich guy has $50K less.
Socialism does create equality. Everyone is equally poor and miserable. Well not everyone. The leaders of socialist countries always make out like bandits. Fidel was worth billions when he died as was Hugo Chavez. But you know, they are all for helping the little guys and girls LOL!
Well, I’m not a socialist, and I’m really good at math. I just posted this above, but it’s worth repeating. I checked the math, and it’s correct:
The true meaning of socialism and why capitalism wins everytime it’s tried (taxes)
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100… If they paid their bill the way we pay our taxes, it would go something like this. The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,†he said, “I’m going to reduce the cost of your daily beer by $20â€. Drinks for the ten men would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from every body’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. “I only got a dollar out of the $20 saving,†declared the sixth man. He pointed to the tenth man, “but he got $10!†“Yeah, that’s right,†exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!†“That’s true!†shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!†“Wait a minute,†yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!†The nine men surrounded the tenth and beat him up. The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill! And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. David R. Kamerschen, Ph.D Professor of Economics. For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Dr Landlord,
You sound like Marie Antoinette. She said “Let Them Eat Cake” while she was eating caviar and filet minion.
That didn’t end well. She was beheaded by the 99% who were tired of eating cake while the 1% kept raising their rents.
Like in a game of Monopoly, true capitalism doesn’t work and is a dismal failure since eventually there is only a 1% and the rest are homeless and starve to death(ie are out of the game). In true Capitalism and Monopoly, there is only one “winner” and most everyone else has starved to death (ie out of the game)
You sound like Marie Antoinette. She said “Let Them Eat Cake†while she was eating caviar and filet minion.
No, she didn’t. That story is apocryphal. And like many people today, you don’t even understand the point of that fable.
That fable, which arose after the Revolution, wasn’t meant to suggest that Marie was cruel or callous. (Think about it –What’s so hard-hearted about consigning people to eat cake, an expensive treat?) That fable is meant to illustrate the entire ruling class’s cluelessness, not their cruelty.
The aristocracy was blindsided by the French Revolution. Most never saw it coming.
As the fable goes, Marie asked one of her courtesans why the Parisian mobs were (yet again) rioting. The courtesan replied that it was because flour was so expensive, the people could not afford bread. So Marie replied, “Well, let them eat cake.”
She wasn’t being callous. She was trying to be helpful. But she was so insulated from reality, she not only didn’t know that cake was more expensive than bread. She didn’t even know that cake (like bread) was made from flour. All she knew was that when she asked for cake, a servant brought it from … somewhere.
There’s no evidence that Marie Antoinette really was this ignorant. But the story does illustrate how the ruling class’s bubble lifestyle blinded them to harsh daily realities, until the Revolution unexpectedly burst that bubble.
Millie~
WHAT freebies are long-term taxpayers getting. I already pay a very high income tax, sales tax, and on and on. My property taxes (back when I owned a house) were not spent on any benefits I or anyone else got. The roads were falling apart, the schools were indoctrination programs (and I had no children in them anyway), bus service (for which we had 4 parcel taxes voted in in the 7 years I owned my house) was nearly non-existent in my area, etc. WHAT FREEBIES ARE YOU TALKING ABOUT?
Son of a Landlord,
Thanks for the background on Marie and it is exactly what I mean.
The rich person gets $1M in spendable income while the poor person gets 2K.
The Rich person looks at the poor person and says “You should be grateful for the 2K and never mind my 1M”.
Meanwhile, the poor person is making 20K per year with a 2K per month rent bill. Does the 2K help? Sure, but the rich person is extremely arrogant in thinking this solves the poor person’s problem. So the poor person runs up their credit cards to pay the bills and that is where we are today.
The last time this happened in the US, FDR was elected for 16 years and we became a Socialist Nation.
That does remind me of a joke.
Trump, Bernie, and a Libertarian are sitting around a table with a plate of 5 cookies. Trump immediately grabs 4 cookies and tells the Libertarian. “You better watch out or that Socialist Bernie will take your cookie.”
Karin,
“WHAT FREEBIES”
I agree that taxes are very high in California. I never asked for higher taxes. I am asking for a fairer allocation. Here is what I mean by freebies:
Long-term tax payers pay next to nothing in property taxes while new buyers (you and I) have to pay 1.1% of the inflated purchase price. The guy next to us, who bought a long time ago for a much lower price has locked in property taxes. Both, he and I are locked in. Our Property taxes will not increase by more than 2% each year.
Obviously, the base is what makes a difference in thousands of dollars between me and him. His base was a cheap purchase price a long time ago. My base is the inflated house price today. He has no incentive to move because he doesn’t want to lose this great benefit. I wouldn’t want that either.
We have situations in California where someone is living in a multi-million dollar home and pays next to nothing in property taxes (a couple thousand dollars is next to nothing compared what a new buyer would have to pay). How can that be? Well, inheritance or someone bought a very long time ago.
Why can we not cap the property taxes for new buyers? 4k max. for instance?
Or Why can we not reduce the percentage of property taxes? Instead of 1.1 do 0.5%.
Most of us know about the debt burden in California (e.g. unfunded pensions), most of us know what property taxes are used for (schools, infrastructure, staff salaries, etc), Most of us know that lower taxes is not what California can afford. Yes, they waste it, you have corruption and stupidity etc.
Bottom line is nobody wants to pay more taxes and California is not going to lower taxes. Prop13 is allocated in a way the that screws those that are buying now and benefits those that bought a long time ago. I mentioned it many, many times and will continue to do so. You have many posters here who even brag about how low their Prop13 taxes are and how enormous their RE market value is.
I have a family member who owns a multi million dollar home and pays less than 2500 dollars in taxes. If i buy a condo (much smaller, HOA’s, less favorable location) i pay MUCH MORE IN TAXES than the guy sitting in his multi-million dollar home. Say i buy a 700k Condo. My property taxes are 8,030. Why should I pay 3 times more in property taxes for much less house???
It has nothing to do with jealously.
It has nothing to do with socialism or communism or Bernie Sanders, or Obama or snowflakes or liberals or weed.
It has to do with common sense and fairness.
Prop 13 greatly benefits a few and sucks the money from people who are struggling to buy their first home. Its so painfully obvious.
There can easily be a better solution to make it fairer. However, we still have lots of boomers who fight against it and the rich of course. Because they love when others subsidize their low property taxes. What gives me hope is the army of renters, millennials and the recent outrage over prop13. We have historic low ownership rates. It just needs to be marketed the right way and it will be repealed. Its just a matter of time.
Millennial~
Let’s skip all the old arguments against and for Prop 13, and get down to the real problem, one that no one has even hinted at so far on this blog. The real problem is inflation, aka debasement of our currency, all done by the banking families that own the Federal Reserve. The last tie our dollar had to anything of value was gold, and that tie was severed in 1971 by Richard Nixon, whereby he declared that not even foreign nations could redeem dollars for U.S. gold anymore. It was after that that inflation went hog wild. It was after that that the U.S. real estate market went into perpetual boom-bust cycles. It was after that that the homeless population started growing, until we come to today where every city and town in America has a homeless problem, mostly due to the high cost of housing.
After I bought my first house in 1998, the comps on my house went up over $5,000 per month, for every month I owned it for the next 7 years. Everyone else’s house price went up too. We had a young guy from Palestine in our department, and one day he commented on the ecstasy of everyone that owned property. Regarding how values were shooting through the roof, he said, “But if everyone looked around, so is everyone else’s house.”
And this, Millennial, is the point. The only time you have the money made from the house’s rise in value to pay the taxes is when you sell it. Then you think you’re rich, until you try to buy another house. That’s when you find that it’s not that the house got more valuable, but that your dollar has lost a lot of its previous purchasing power. The real solution is stabilization of our currency, and not taxing people that are barely hanging on (and I’m talking primarily about older folks on fixed incomes) until they lose the roof over their head, after which they will barely be able to afford a condo.
As Thomas Jefferson once said:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”
“The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs.”
avi~
Prop 13 only subsidizes our government.
It’s the politics of envy. If the poorer taxpayers save money under a tax law, but richer taxpayers save more than they do, they complain about the law because it benefits the rich more than it does them, and they therefore want the law abolished. They don’t look at the fact that they are saving on taxes as well.
Here’s a perfect example of what I’m talking about:
The true meaning of socialism and why capitalism wins everytime it’s tried (taxes)
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100… If they paid their bill the way we pay our taxes, it would go something like this. The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59. So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,†he said, “I’m going to reduce the cost of your daily beer by $20â€. Drinks for the ten men would now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from every body’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving). Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings. “I only got a dollar out of the $20 saving,†declared the sixth man. He pointed to the tenth man, “but he got $10!†“Yeah, that’s right,†exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!†“That’s true!†shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!†“Wait a minute,†yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!†The nine men surrounded the tenth and beat him up. The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill! And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier. David R. Kamerschen, Ph.D Professor of Economics. For those who understand, no explanation is needed. For those who do not understand, no explanation is possible.
Ahem, that last line is directed to you, Millie.
Karin,
my response never showed up…i’ll try again.
short version…..the message of your post makes sense but it has little to do with prop13.
In your beer example everyone gets the same beer. The rich pay more.
In prop13’s case, many rich people and many boomers (not all) pay a very small percentage of their current property value in taxes. New buyers pay 1.1% of the highly inflated purchase price (often several thousands of dollar more than the guy next door, for the same house). The rich/many boomers get a benefit that we all have to subsidize. The rich keep RE in their dynasties and the offspring inherits the locked in property taxes.
You cant have someone in a little condo pay multiple times more in property taxes compared to someone living in a multi-million dollar house. But thats the current state.
Its socialism for the ones that dont need it. But it can easily be changed….just educated the millennials and renter nation. The moment they understand this scam it will be gone.
I just posted this under the previous topic, but it is much more apropos to this topic, and since it was the last post for the July topic, it can also be one of the first for the August topic.
There is a very interesting article in today’s OC Register by Jeff Collins about accessory dwelling units (ADUs). In 2017 state laws took effect that made it easier to build these small add-ons. Almost 5000 such permits were issued by municipalities in 2017, which is a 60% increase over the previous year. LA and Orange Counties had a 122% increase. And in 2018, the permits are up 78% over the first half year compared to 2017, with LA/OC up 125%! The boom is less evident in the I.E. where housing is cheaper.
Some people are adding them for elderly parents, but others are building them as rentals. One fellow in the SF valley got into trouble when the inspectors found an un-permitted rec room in the garage. He spent $5K to remove it and is awaiting a new inspection to remove the city lien on his property.
The big concern among neighbors seems to be parking for rental units. I think we can foresee cities adding increased parking spaces to the requirements for ADUs unless there is something in the new state laws that block this.
I love more ADUs!
Who cares about more cars….we need more supply of housing! Way more!
Is that you, Milli?
This ADU news was posted in the previous thread, and you pretty much posted the same response.
Are you now trolling under multiple handles?
“Who cares about more cars…” I do. Do we need more parking impacted neighborhoods?
“Is that you, Milli?”
I’d bet money on it. Looks like he posted under several different names toward the end of the last thread.
Even though Millie says he has all the time in the world to wait this bubble out, I don’t think that is the case. I’m sure pressure to buy is starting to show itself. We’ve had several of these bear bloggers in the past (post all day long under multiple handles) and then they just go away one day. Likely after swallowing their pride and buying a house.
Lord,
What pressure are you referring to? I pay a very small percentage of my gross income for rent. I get paid to wait. I would lose if the market goes up in a straight line but people with a half brain know that markets move in cycles.
If you think I buy anytime soon you are dead wrong. I have to say though, some price drops I have seen lately are remarkable. People trying to cash out before/duuring summer are now lowering prices by a significant percentage. Have seen a nice home in the high 800’s that is now on there for 700 (after three months of no offers according to the realtard). Not that I believe him but that is a huuuuge drop. Also, realtards are willing to write low ball offers now, something they weren’t willing to do a while ago.
We’ll see…. if you think I am disappearing anytime soon you are dreaming. Next year is going to be interesting. Rates are rising, we are due for a recession and the tax reform will kick in.
Millie, for every person like you with an unlimited time horizon there are probably 20 people with pressure to buy. Spousal pressure, family pressure, safety and security for kids, etc. Most people with kids wouldn’t even think about getting a cheap rental in a part of town with bad schools. And there it starts. If you want to live in an area that is safe, good public schools, close to job centers…you will pay dearly whether you buy or rent, it is that simple. And that is why certain areas have such sticky prices.
Lord, you are correct.
Utilizing a cheap rental to save lots of money doesn’t work for everybody.
No secret here, I stated many times I am not the avg. Joe. But that doesn’t mean you have to buy! Why cant “they” just rent a nice place?
Your BUY PRESSURE statement is misleading (purposefully).
From a financial perspective it doesn’t even make sense, that’s why you avoid the numbers. You are going for the emotional aspect, because that’s what is driving the decision to buy for many people.
Let’s look at it in more detail:
You mentioned “spousal pressure”
I agree, if you marry someone with expensive taste you are screwed (Either way). But that was your choice. In most cases, having money in the bank goes long ways though. Just show the well-stocked bank account and/or rent a nicer place.
You mentioned “family pressure”
Your parents?
Sure. They want you to buy because they might not understand prices can also fall. When they bought a long time ago prices were cheap and it paid off nicely.
But all of us here know that prices can fall and will fall.
Your in-laws?
Absolutely, your in-laws want financial security for their daughter. They might even judge you by the size/quality of the house you buy for their daughter.
That can be a 15 min conversation though. If you show them evidence of your funds in your bank account it can do wonders to reassure them.
Safety for your kids:
That’s dumb. The rent I pay is dirt cheap but hat doesn’t mean its unsafe here. I don’t have to explain that? Are richer kids all saints and don’t bully you kid in school or beat it up? Can an instructor/coach at your sports club, school or someone in your family not be a pedophile? What about break-ins. Do you think its more likely someone will break into a cheap rental versus a nice house? What’s there to steal in a low-income neighborhood?
Again, if you want to live in a nicer area, just rent in a nicer area. You still save a lot compared to buying. If you feel pressured to buy (renting money from the bank) instead of renting from a private landlord, maybe you are too weak to hold your ground. Most of the time, you argue with numbers. Just show a rent vs. buy calculation and consider the new tax laws (24k standard deduction for married couples and 10K cap (SALT)). Numbers don’t lie.
Lord, you are correct.
Utilizing a cheap rental to save lots of money doesn’t work for everybody.
No secret here, I stated many times I am not the avg. Joe. Why cant “they” just rent a nice place instead of buying?
Your BUY PRESSURE statement is misleading (purposefully).
From a financial perspective it doesn’t even make sense, that’s why you avoid the numbers. You are going for the emotional aspect, because that’s what is driving the decision to buy for many people.
Let’s look at it in more detail:
You mentioned “spousal pressure”
I agree, if you marry someone with expensive taste you are screwed (Either way). But that was your choice. In most cases, having money in the bank goes long ways though. Just show the well-stocked bank account and/or rent a nicer place.
You mentioned “family pressure”
Your parents?
Sure. They want you to buy because they might not understand prices can also fall. When they bought a long time ago prices were cheap and it paid off nicely.
But all of us here know that prices can fall and will fall.
Your in-laws?
Absolutely, your in-laws want financial security for their daughter. They might even judge you by the size/quality of the house you buy for their daughter.
That can be a 15 min conversation though. If you show them evidence of your funds in your bank account it can do wonders to reassure them.
Safety for your kids:
That’s dumb. The rent I pay is dirt cheap but hat doesn’t mean its unsafe here. I don’t have to explain that? Are richer kids all saints and don’t bully you kid in school or beat it up? Can an instructor/coach at your sports club, school or someone in your family not be a pedophile? What about break-ins. Do you think its more likely someone will break into a cheap rental versus a nice house? What’s there to steal in a low-income neighborhood?
Again, if you want to live in a nicer area, just rent in a nicer area. You still save a lot compared to buying. If you feel pressured to buy (renting money from the bank) instead of renting from a private landlord, maybe you are too weak to hold your ground. Most of the time, you argue with numbers. Just show a rent vs. buy calculation and consider the new tax laws (24k standard deduction for married couples and 10K cap (SALT)). Numbers don’t lie.
“If you want to live in a nice area, just rent there.”
That’s the problem right there. Contrary to what you say, getting a cheap rental in a nice part of town is next to impossible. And if I am wrong, send some links as evidence. When people look at rental prices for 3/4 bedroom homes in nice areas, they soon realize buying isn’t that much more. There are problems with kids in wealthy areas, but I’d rather deal with these problems then send my kid to a ghetto school where you are surrounded by gang bangers, low lifes, non english speakers, etc. The chances of somebody thriving in that environment is very low…
Lord,
““If you want to live in a nice area, just rent there.â€
That’s the problem right there. Contrary to what you say, getting a cheap rental in a nice part of town is next to impossible.”
What is wrong with you? When or where did i say cheap rental in a nicer area???
Of course you pay more rent in a nicer area!? Thats why i dont rent there.
But renting in a nicer area is still WAY more inexpensive than RENTING MONEY FROM THE BANK (“buying”). That changes when we get a crash, which it looks like we are headed to.
You probably still dont get this. One more time….renting in a nicer area is still cheaper than buying in a nicer area…..during a bubble….in California…..no rental parity……buyer loses, renter who saves money wins when he buys during the crash…..not that hard? ….for some it is….
I posted it twice because as I explained, it was more relevant here, and it was at the tail end of last month’s blog. I agree with Millie about 10% of the time.. sometimes more sometimes less. I think Millie adds an important point of view as do you. If everyone who posted agreed with me, there would be no purpose in having this blog at all.
BTW I haven’t gone back to last month’s blog to see if there were any responses. Since I posted both on the same afternoon (before and after this thread appeared), I figured the action would be here.
It is possible for two people to share the views everyone. Geez.
Joe R. I researched building an ADU on my property in SoCal. We have a perfect setup for a rental property, but they way my town handled the new law was to make it easier to build an ADU only in the lowest density zone up in the hills where they are least likely to actually be built because of the proximity to bus routes requirement. In the medium density zoning where I live, they actually eliminated the possibility of ADU and increased the parking requirements for a second unit making it more difficult to convert to a multi-unit property. Each unit on the property now must have a 2-car garage! Meanwhile there are many properties in my neighborhood where a single unit doesn’t even have a 2-car garage, plus many un-permitted second units…
I kinda figured they’d use parking to get around this new law. Right again!
I’ve been fighting the City of Burbank for two years now. I originally wanted to demo my garage and attach it to the back of the house and add a master bedroom and bath. They made it damn near impossible. Then came the ADU’s so I had plans drawn up for the ADU to 740 sq. ft.. They turned that down said I can only have 500 sq. ft.. I’ve been waiting over six months now for the plans to get through plan check.
I have plenty of parking on my property. Burbank requires two spaces for each unit. Right now now I have three vehicles, a RV, and my toy trailer parked on my lot. When completed I’ll have two vehicles in the garage. And rest at the rear of the property.
I agree prop. 13 needs to be phased out over time. It really isn’t fair to young people.
Regarding Prop 13, ending it is NOT going to lower property taxes for young people. It’s only going to INCREASE taxes for longtime home owners. Also, new buyers (‘young people’) lose their future protection against out-of-control tax increases. Why doesn’t anyone on this board understand this?
Karin: Why doesn’t anyone on this board understand this?
Some do, but don’t care.
Milli will happily suffer more, provided that others suffer way more.
The nine most terrifying words in the English language are “I’m from the government, and I’m here to help.”
– Ronald Reagan
I know someone who moved out of their two bedroom Tudor revival bought in the late ’70s into a much larger ranch house (built maybe 10-20 years later) in a better neighborhood with the inherited Prop 13 tax break. I think the taxes are probably about the same, or maybe slightly more on the Ranch house. They leased the Tudor out on a long term lease before rents skyrocketed. Now they’re planning to move back to the Tudor, sell the Ranch and possibly buy something else nearer the beach in a County where you can transfer the Prop 13 benefit. We’ll see how that plays out.
People stop using “crash”. It did crash last time and you still missed out. Prices will drop but there won’t be a elf waving a banner saying Today Is The Ultimate Bottom.
Don’t you know that clicking your ruby red heels together three times while repeating on housing blogs over and over “there’s a crash just around the corner†will make it so?
Andy, in California it crashes every ten years. A severe crash is right around the corner. I did not miss out last time….it just finished school. That like saying you missed out in the 80s….no, I was just born. Millennials did not have a buying opportunity yet. It’s all about timing. Once we get a crash we buy of course. Has to be a biggie though 🙂
@Millenial
At least you got your crypto crash. 1 out of 2 isn’t bad.
Very true And thank goodness….imagine BTC would not have crashed…I wouldn’t be able to buy as much. Remember, buy low, sell high. Not the other way around!
Prop 13 won’t be repealed outright; they’ll end up using ballot initiatives to chip away at it to the point where the tax savings only apply when the home is a primary residence.
The big thing that is absolutely coming down the pipeline for SoCal (particularly the expensive coastal cities) is widespread rent control. Demographics guarantee it. The millions and millions of central and south Americans are going to continue to flood in, voting democrat. Dem politicians will go for easy wins with these (average 90 IQ) folks, and since they’ve already painted “the 1%”, white people, and capitalism as their boogeymen, it’ll be easy to keep pushing that window to include anyone with property to rent out…. and voila! Rent control. It’s an absolute, 100% guaranteed inevitability.
It won’t stop at just being only for owner occupied properties because people will lie. It’s going to eventually be made nearly impossible to get the prop 13 subsidy. It’ll be in name only and we’ll not only see its demise, but the other taxes which have been raised to accommodate it in the past won’t be lowered after the fact.
State and local governments are probably looking under every rock for any missing tax revenue or trying to find ways to change old laws just to keep the pensions going and other services in my opinion. When I read most homes in Cali are second homes. Means most of these people probably live out of state or different counties. Sure seems like a big imbalance in taxes and pensions and other bills.
You have it backwards. People withs second homes are ideal home owners. They pay taxes yet use very few, if any, tax provided resources. Those and seniors are what you want in your state/city from a tax payer / service user ratio. Seniors are great since they have no kids in school, don’t commute to a job (hence don’t contribute to traffic) and spend more than they save.
I might have it backwards. However, if the ideal home owners didn’t live in their towns or counties and putting money back into those towns where they got pensions or using their retirement savings in those locations they are slowly draining these locals tax revenue and assigning it somewhere else. Good for the other location. Not so good for the other towns.
Many local governments will likely be more dependent on keeping property taxes up and sales taxes to maintain pensions and other vital services, which are currently sending smoke signals.
https://www.ocregister.com/2018/04/23/the-realities-of-californias-pension-crisis/
“People with second homes are ideal home owners. They pay taxes yet use very few, if any, tax provided resources. Those and seniors are what you want in your state/city from a tax payer / service user ratio. Seniors are great since they have no kids in school, don’t commute to a job (hence don’t contribute to traffic) and spend more than they save.”
In the end it doesn’t really matter as each towns grow they will shrink and other small towns that saw zero tax revenue growth will see a turn around. Either way if towns are not managed right or don’t bring in the type of economic development or government services it will likely not last long. Second Home owners and Seniors may not hang around to support those city/county taxes. Prop 13 is just one of items once you decide to remove this it could potentially send a shock to the system and it may be wise to leave and wait for the dust to settle in my opinion.
Home of genuis: https://www.redfin.com/CA/Santa-Monica/3014-7th-St-90405/home/6778152
Price: $1,650,000.
Lot size: 2,482 sq ft.
Home size: 2 bed, 1 bath, 704 sq ft.
Built in 1909.
Bonus: Listing says there’s also a “barn” with its own bath on the lot. But since the lot is only 2,482 s ft, it’s more of a shack.
Other Selling Points: This property is in the desirable and hip neighborhood of Ocean Park. Live the Venice lifestyle while taking advantage of the City of Santa Monica’s infrastructure. Walking distance to trendy eating/shopping on Abbot Kinney, Rose Ave, Main St. Marina del Rey and the Santa Monica Pier are a quick bike ride.
“Live the Venice lifestyle…”
…where bums park their 50-year-old motor homes in your residential neighborhood and dump their septic tanks in your gutter.
“We also have a need for higher density housing but of course NIMBYism makes this more difficult.”
I love the euphemism of “high density”, lol. Let’s call it what it is, cheap apartments. If I’m paying $1M for a house, I don’t want Section 8 trash living next door in their “high density housing”. Call it NIMBY if you want, I call it common sense and protecting my home value.
Yes! Let the poor eat cake!!
We all know how that turned out for headless Marie.
My point is that people need a living wage and Trump is not focused on that.
I guess from and investor/landlords perspective if you set a mandatory living wage for all low skilled work they will just increase the rent to make sure it reflects 30-40 or 50% of their pay. Also homes may potentially become more expensive to reflect the wage increases depending on where they live in my opinion.
Sorry Bob, what you propose doesn’t work and never worked in real life. If you understand Econ 101, a minimum wage job provides a minimum wage lifestyle regardless if the minimum wage is $0.25, 15 or 1,500 per hour.
Social engineering and equality work only in communist countries, by the full force of the government and all they accomplish is EQUAL poverty. It is logical if you understand basic economics and human nature. It was proven ALWAYS in history regardless of culture or level of education. I lived under communism in one of the european countries.
All the government can do is to protect the borders against illegal immigration and remove the H1B Visas in order to have less competition for the middle class. Otherwise you have a race to the bottom. That is the difference between Trump’s rhetoric and the Democrats. Maybe Trump will not do anything to change the current immigration (all Democrats and RINOs oppose), but in that respect he is right and the only adult in the conversation.
Also, the main driver for inequality is the low interest environment promoted by the FED. No politician can do anything about that, unless they take the business license from the private company called the FED (good luck with that after they bought all politicians for over 100 years).
So, there is no practical/doable solution to the inequality both of us rage about. Both of us want the same thing – a strong middle class. What you propose does not work in theory or from the practical point of view. What I propose works in theory but not from a practical point of view (given the entrenched interests). So we’ll both continue to see everything deteriorating for the middle class till something will snap. If it becomes like the French revolution will be good. If Bolshevism will be installed in this country the same way it did in Russia in 1917 it will be really bad for 99.9% of the population. The 0,1% do well now and they will do fine under bolshevism, too. Just the actors will be different.
People will always act in their own self interest. If you own it is in your self interest in the short term to block housing construction since it will keep your value higher in the short term.
Long term, homelessness will rise turning your city into zombie apocalypse (happening now), business will close and leave due to high housing costs, and poverty will rise. Thus eventually lowering the value.
High density is an euphemism for crowded.
Problem is, a lot of developments I’ve seen in the past 15 years at least in San Diego are high end but require “affordable” housing next door, so that nice park is filled with 3rd worlders (and Barnie Panders saying they have 90 IQs is generous) blasting their music all the time and leaving their trash all over. Schools filled with their crotch fruit so your kids cant learn a damn thing but you get to pay those insane mello-roos or whatever it is for a brand new school to house mexico – and give them free meals – all paid for by YOU!
Pay 800K+ to live next to that? LMAO.
Are there any other states that have the equivalent (or approximation) of Prop 13 on the books?
I know Colorado has the Tabor amendment that allows state government to increase spending by only the increase of inflation plus a factor for the the increase in population. This lump sum budget is distributed out to all taxpayers.
The property taxes are 0.8% of assessed value in Colorado due to this limit.
Yes, we in Oregon followed you but made it 3% instead of 1 1/2% but the state hungering for money has shown the counties a way around the limit. State pensions are guaranteed an 8% annual increase and some pensions are 77 thousand a month, yes I’ll say that again 77 thousand a MONTH! The state is going broke and is looking for any way to squeeze the public out of every dime they can. My property accessed tax value increased $242,000 with out the assessor even coming out to the property. My zoning did not change nor did my sq.ft increase. The county board of appeals is simply a rubber stamp for screwing the public.
Nevada has something similar but it’s a floating cap set annually by the state legislature, so not moronically destructive like prop 13 since rates can respond to dynamic factors such as monetary inflation and market conditions.
Florida has a homestead amendment in it’s constitution.
it does two things, but only applies to residential lived in properties.
1. Forbids someone from taking a home based on a court settlement.. (IE Doctor sued for malpractice, home is safe)
2. Homes covered by the homestead exemption get 50k off the tax basis of the home when figuring taxes, and taxes can only go up by 2% per year.
Note, above from memory …
Property taxes in FL, are normally about 2% of the purchase price.. So if you were to buy a $500k house property taxes would be around 10k per year but increases limited by law going forward.
Florida state constitution has a homestead amendment. It does two things (working from memory)
1. Makes someone’s primary residential property exempt from seizure due to a judgement. IE you cannot take a Drs. home if you win a malpractice case.
2. Gives homesteaded property a reduction of $50k in taxable value, then limits increases to 2% or less going forward.
Property Tax in FL is roughly 2% of the purchase price, so a 1 million dollar home will have a 20k per year property tax. But a cheaper home, say $250k, will have a $4k per year property tax (250k minus the 50 homestead exemption) x 2%.
Yes, Arizona has something similar that was passed by voters in 2012. It limits the increase to the taxable property value at no more than 5% a year. I don’t know about other states.
Colorado has TABOR (Tax Payer Bill of Rights) which is basically the same thing, but even better. It limits all taxes and spending to population growth and inflation. Any spending or taxes that go beyond that have to be approved by voters.
Prop 13 got it 1/2 right, they limited taxes. But they should have also limited spending to the same growth rate. Colorado did it the smart way. But since CO is now turning into CA with colder weather, the socialists there are pushing to repeal TABOR just like the socialists in CA want to repeal Prop 13.
Prop 13 is also effectively a socialist program. It’s some people subsidizing handouts for other people.
Problem with eliminating homestead is elderly with no or limited income get forced out of homes because of government inefficiency. One solution might be to increase doc stamps for Seller when selling based on length of ownership. Also eliminate homestead when original owner or spouse dies so kids would start with current tax value. Unfair to fault longtime owner and force them from a house they planned on dying in. That was the original intention.
There it is.
I was there when it passed and CA was out of control sticking property owners with tax increases every year. People actually were being forced out of their houses because of the plundering the legislature was doing.
Additionally those same people had been paying taxes for decades already.
Unlike those free riders like Millennial.
A property tax on a primary residence is obscene in the first place, if one wants to advocate for people paying their “fair share”.
The squat to own crowd loves to stick homeowners with tax increases every election cycle with all those ‘just 25c a day for the average homeowner’ initiatives.
Somehow public greed is more honorable than individual greed.
It’s not. It’s just greed.
dweezilaz
Why do you think that taxes paid in prior years makes a difference?
The DMV just raised my car registration. I have been registering cars for 20 years. I should tell them that this is not fair, Please bill my new neighbor who just moved from CO.
My city is raising the sales tax to raise repair aging schools. I have sales tax my whole life. This is not fair to raise my taxes, please bill the young family that just moved in next door.
Dear IRS, I have paid my income taxes every year since I was 16. I have determined all my prior years of taxes are enough. I will not be paying any more taxes.
I do agree with you on this point: “A property tax on a primary residence is obscene in the first place….”
Lets focus on reducing taxes, not just sticking it to other people.
“Unlike those free riders like Millennial.”
I wouldnt say I am a free rider.
I pay a small percentage of my six figure income in rent. I pay for electricity, internet, for gas and avocados. And I paid a lot in taxes for crypto gains.
You do have to game the system a bit though, right?
Most successful people did not get there by doing things by the book, did they?
A few examples:
Our con artist president. Do you think he would have gotten where he is without cheating or lying?
Real estate Agents: Do you think they make a sale by being honest?
Your CEO: do you think he can tell his workforce that he wants to sell the company and cash out? No, he tells them they will conquer the world and will get big bonuses soon.
Police men: Do you think they they can be honest in court after shooting a black kid 17 times in the chest? Of course they have to say, they feared for their live and thought the cell phone was a pump gun.
I’ll be happy with prop 13 in thirty years from now!
Let’s end prop13, which will pop the bubble and renters will be happy immediately!
Why should we finance government subsidies for a few people? Everyone should pay their fair share!
It won’t pop any bubbles. What will happen is long time owners will HODL harder than before and that’ll help keep supply constrained. Why? Because they’ll be more stuck than they are today. If they were smart they’d get out now while the getting is still good. So would you. Anyway it’s not going to play out overnight. You should start thinking more critically for yourself.
“Let’s end prop13, which will pop the bubble”
not
Ha! – someone on this board gets it!
We don’t “need” more high density housing. We need to cut off welfare benefits so the losers in this state can pack their sh*t and move to Missouri (sorry Missouri buy you’re expendable.) CA is for winners. It’s no longer for some artist that makes driftwood sculptures circa 1975.
No one has a right to live here. And given the sales tax and income tax it’s a no brainer to have at least some break on property taxes and liquor taxes.
As a matter of fact Prop 13 portability will be on the ballot, and I strongly support it. It will alleviate traffic by having the old wheat cakes move to rural and semi rural areas when they retire:
https://ballotpedia.org/California_Proposition_5,_Property_Tax_Transfer_Initiative_(2018)
What makes you think Missouri wants freeloaders?
You’re dreaming if you think the politics of California are moving in any direction other than socialist. And you’re gonna get to help pay for it. Suddenly smug comments about other states won’t seem as cute as you think they are today.
@avi this is exactly right. Demographics due to mass legal (and illegal) immigration guarantee California goes full Mexico/Venezuela in time.
Demographics = Destiny. Race is real, folks. You screwed up believing the propaganda.
JR wirth, exactly right. Nobody has the right to live here. That’s why prop13 needs to go. Why should we give you a freebie that costs all us an arm and a leg in higher taxes? You don’t deserve it, pay your fair share or GTFO. And hiding like a coward behind “poor grandma†doesn’t fly either.
Milli: Why should we give you a freebie that costs all us an arm and a leg in higher taxes?
You’re not giving anything to anyone. You pretend to be poor, so your landlord won’t raise your rent. You pretend to live in another building, so you can use their pool for free.
You don’t deserve it, pay your fair share or GTFO.
Who anointed you king of who deserves what? California has Prop 13. If you don’t like it, you’re welcome to GTFO. No one put a gun to your head, forcing you to live in California.
Thats correct. I would not pay several times more in property taxes than the guy next to me. Another reason why i only buy if the market crashes hard.
I chose to not subsidize this entitled, selfish generation who got spoiled with low taxes (prop13).
Millie~
I’m so freakin’ tired of your nonstop mantra that “boomers are an entitled, selfish generation”. Guess what? I’m a boomer, and I don’t own a house. I’m holding out until real estate comes down, but I get to start my retirement with a brand new mortgage and very high property taxes when I choose to buy, same as you do. How does that make me entitled and selfish?
As for your constantly ragging people about not paying their fair share, son of a landlord rightfully brought up this, which you should never have told us: “You pretend to live in another building, so you can use their pool for free.” You posted that yourself under the last article. Not to mention the fact that you’re waiting to own property by inheriting it, property that you did not earn and for which I’m sure you’ll file for the lower basis you can use if you inherit. Of course you will. Your concept of paying ‘your fair share’ will completely go out the window at that point. Everyone on this board knows it.
You’re nothing but a sanctimonious hypocrite.
Karin,
“which you should never have told us: “You pretend to live in another building, so you can use their pool for free.†You posted that yourself under the last article. Not to mention the fact that you’re waiting to own property by inheriting it, property that you did not earn”
why should i have never told you that?? There is no law that prohibits this? No sign at the pool….except one that says if you have diarrhea please dont use the pool.
Inheritance…..cycle of life….you cant take a house with you after death. It gets passed on. Not sure why this is an issue for you?
BTW, i am willing to buy, but only after a severe crash. No crash no purchase.
Millie~
It shows that you are perfectly willing to use something that you are not paying your fair share for.
As for your inheritance, to repeat, “I’m sure you’ll file for the lower basis you can use if you inherit. Of course you will. Your concept of paying ‘your fair share’ will completely go out the window at that point. Everyone on this board knows it.”
“perfectly willing to use something that you are not paying your fair share for.”
100% correct. Boomers teach us everyday that you have to abuse the system, game the system and take freebies whenever possible. I am just applying what i am being taught.
Millie~
Man, you talk out of two sides of your mouth. You are the biggest hypocrite on this board. You get on your high horse and say everyone else is greedy and selfish when all they’re doing is hoping their taxes won’t go up even higher. But when you deliberately game the system and lie, you say you’re only following everyone else’s ‘example’. You are absolutely immoral. I have no respect for you. If you were my neighbor, I’d move. You are going to burn in hell when you die for being such a dishonest fake.
You seem emotional and upset. Is it the prop13 scam that I continue to call out?
Prop13 is all about -screw you i have mine-.
RE in general is all about -if I lie more to you and screw you over I get paid more-.
That’s the name of the game.
Gaming the system / playing the game is the only way to get ahead in This RE market.
Mildred~
You are mental. And I’m not emotional about this. I am, however, EXTREMELY irritated, in the way that I get when I see that Hillary Clinton and George Soros have not yet been strung up from a lamp post in front of the White House.
It’s people like you that make people like Clinton and Soros get away with their extreme crimes. You are so busy fighting everyone at your level that you don’t pay attention to the giant screw job that The Cabal that runs this country are exercising upon the general population. NOTHING anyone says will cause you to change your mind. And in the words of Winston Churchill, “Those who never change their mind, never change anything.”
I changed my mind many times in my life.
At some point (when I was much younger) I realized no politician on this earth will make your life better. It’s up to you to improve. No political party can manipulate markets infinitely. Bubbles will pop and economic cycles will occur no matter who is in charge. I couldn’t care less if corrupt Hillary is in charge or this clown con artist. I actually like him for attacking blue states and the tax reform that takes away government subsidies that artificially inflate prices. Whatever puts pressure on inflated RE prices is a good thing.
Also, I changed my mind on buying RE. I used to think it’s the right thing to buy when you have the financial capability of doing so. During the process I asked myself why is everybody on the same page and encourages you to buy( literally everybody) but It all feels so wrong?! If you think about it, it’s very unnatural: People usually don’t give good advice that benefits you. They give advice to you to do something that some way or another will benefit them. Also, why are the involved entities (real estate agents, lenders, banks and sellers) so heavily focused on getting you to rush into buying and all read from the same script? Why are so many sales pitches and “little†lies needed? If buying makes sense why put on such a show? That’s when I started digging and looking for answers somewhere else and questioned everything I was told during the process. (I Read Books, reviews from first time home buyers and found many internet RE blogs). I realized I was a sheep getting prepared to be slaughtered. Luckily, I prevented buying in the last stages (I was in escrow). But that experience was priceless! Everything that happened and was said makes perfect sense now. Another thing I did well is taking notes and writing things down that happened during the process. I saved some email and conversations. It just adds clarity and you will memorize it better. I was a first time buyer that experienced that process without the financial impact (i ended up not buying) and It completely changed my mind. I know the name of the game now.
“You are mentalâ€
We disagree on our prop13 views. That’s okay. It’s not worth getting upset over it.
Millie~
Regarding real estate, I mostly agree with you. The three big areas manipulated by the Global Cabal have the acronym of F.I.R.E.:
Finance
Insurance
Real Estate
Tons of money to be made here off of the fleecing of the taxpayer/citizen. My BF & I have been together for 26+ years, and both have recently retired. He has 4 kids and a grandkid on the way, and desperately wants a bigger place so that we can have them all over. However, we are just coming off of the peak of the market, and prices are still insane. As for the mortgages out there, lenders charge a fortune in junk fees, and want over 4% for even a conforming 15-year loan, while the banks are barely paying 0.1% (I actually started putting my savings in 4-week Treasuries at 2% – big whup!). Plus, most of the houses we’ve looked at have major deferred maintenance, and the sellers want to unload them ‘as-is’. What I want to do is save up enough cash to pay my half without a mortgage, and I’d like to wait for prices to come down a lot more. I figure my savings will meet that sweet spot in maybe 3 years. Since my BF makes a lot more than I do, he has (since he is the one with the dire need for a bigger house) agreed to pay the full property tax every year. I HATE property taxes, and he has been telling me forever that they are no big deal, so I told him fine, then you pay them. It took a while, but he doesn’t have enough to swing the type of house he wants on his own, so he finally agreed. I hate property taxes so much they make my teeth hurt when I think about them. If I own a house, I shouldn’t have to rent it back from the government. I pay enough in income taxes as it is.
Having said that I know real estate is a big con in many ways (many of which I haven’t even mentioned yet, for the sake of brevity), I do want to own a house, and here’s why:
Being a renter is unstable.
Here’s what I mean by this, based on personal experience. I had been a renter for 24 years in 1998. The complex I’d lived in for the last 4 years back then was bought out by another company who decided, among other things, to go non-pet. They let current pet parents keep two of their pets, and I had three cats. They were relentless about this, entering my apartment (with a 24-hour notice) to check on my cats nearly every week as a form of harassment, which they could technically do legally. I just couldn’t keep taking time off to be there, and they knew it. They told me either get rid of one of the cats, or move. Rentals that allowed pets that were in decent neighborhoods were becoming nearly impossible to find at that time, so I ended up buying my first house in order to keep my little ones. Seven years later, I sold it for a huge profit, and moved into a rental within the same community. 7.5 years later, one of my landlords lost his job, and they had to sell the unit we were in. We got a 60-day notice, during which time we found that the rental market was even tighter than when we moved in. We ended up in the armpit of Alameda County, in San Leandro. Two years after that, we got a 60-day notice (again) to vacate because the owner wanted to sell the house we were renting, and use the money to buy a 4-plex for increased cash flow. The landlords of both places loved us as tenants, but their needs overrode ours. Anyway, this time the market was so bad that the best we could find was a tiny condo 30 miles from work, that 3 dozen others showed up for. It was more than twice our current rent. There was one family that was so desperate for a place to stay that the father was practically in tears. It was horrific. So I went to an apartment complex across the street from my office in Oakland, thinking we could store our extra stuff in the house my BF had inherited in Santa Rosa until we were able to retire. I looked at a 2 BR/2BA that was 1000 SF. With not even a balcony. The rent? $5,300/month! In Oakland! And that didn’t even include parking. So we ended up moving to the Santa Rosa house, and commuting 4-6 hours a day for the next 2+ years. It was hell, but at least no one could give us a 60-day notice and throw us out. Each of the three times this happened to us was incredibly stressful, and it always seemed to happen at some of the worst times for us. We always ended up with higher rent, longer commutes, and worse neighborhoods.
And that is why I still want to buy a house. No one’s kicking me out again.
As for Prop 13, yes, you are mental on the topic. I try to not even respond to your rants about 13 any more. There’s no thinking going on there, and I waste my time trying to explain the overall picture to you.
Karin,
I am glad you are retired and dont have to do that terrible commute anymore. ~I take it you dont believe that commuting for hours is considered “downtime”. Some Inland Empire shill on this blog actually mentioned that.~
I really appreciate your real Life examples. Interesting and helpful.
Also, I will take a break from ranting about prop13.
Millennial~
No I do not consider commuting to be downtime. I used to have to get up at 4:30 a.m. to get ready for work, and never got home before 8:30 p.m. That left me 8 hours to prepare my meals for the next day, wash the dishes, feed the cats, do laundry, etc. What was left over was for sleep. The wear and tear on my car (and on me!) was unbelievable. The weekend was all for chores, from sun-up to sundown. It was killing me, literally. No time for exercise, naturally. But thank you for your kind words about my being able to end that.
As for your taking a break from your Prop 13 rants, I really would appreciate that. We are simply repeating ourselves, and it is one of the reasons I check in to this site much less frequently. Let’s just agree to disagree, and leave it at that.
Also, I hope that your rental situation stays as stable as it has been. No one should have to go through what we went through three times, particularly when we were such good tenants, and definitely did not earn such treatment. But just in case, re-think your stance on buying a house. And remember my advice on timing your buy. The market has a long way to go before it hits bottom, and may stay there for a few years. You want to buy when you starting seeing a strong increase in sales, and before the prices start jumping again. Don’t remain a renter all your life. As long as you pay your property taxes, no one can give you a 60-day notice to vacate if you own. Even eminent domain doesn’t happen overnight. Face it, it’s the lesser of two evils.
From my prior posts, I have been very against inheriting Prop 13 tax rates.
I read the Good Dr’s post and the LA times article and I am still very against this entitlement.
However, the LA TImes article had a good example why it should be kept.
If you are a dependent of your parents living in your parent’s house for any reason, ie disabled physically or mentally, you should not be forced from your current home due to taxes.
If an amendment to the law allowed only inheritors to take advantage of this law who have the house as a primary residence, then I am for the law. That was the intent of the law.
The loophole allowing people to inherit a house and rent it out for 26K per month and pay 1970’s taxes on the house is just ridiculous abuse. I don’t know why it hasn’t been closed long ago.
This would be tough to police, like in the case I mentioned where the person who inherited moved in and then rented out their old place. The time between the death of the parent and the closing of the estate was very long. People would try to move in just before the parent died and claim it as their residence. But the real instances where the person who inherits has lived there all along do deserve this break. A more complete investigation could prove or disprove this, no doubt.
Joe R,
That is a good point and it is open for abuse.
However, an exemption for:
1) Someone who was a dependent on their parent’s Federal Income taxes for 3-5 years before the parent’s died.
and/or
2) Someone who listed the parent’s residence as their own residence on their own Federal Income taxes for 3-5 years. Many disabled people can work part-time jobs but can’t afford or have the means to move away from caregivers. Also, there are children who have moved back in with their parents as caregivers and have not been able to hold a full-time job due to this demand.
I think that would limit most abuse.
I have millionaire relatives that pay less than $1,800 property tax a year on properties worth in excess of $2 mil.
Their kids, my cousins will move in to those homes eventually and pay the same rate.
Meanwhile I pay almost $6k a year on my home that is worth less than 1/4 the value of those homes. It’s patently unfair.
Will you still be saying that in 15 years when your neighbors are paying double?
The problem isn’t that your relatives are paying $1800. The problem is you are paying $6K. You should both pay $1800. Fight to cut spending to lower your tax bill instead of fighting to raise taxes on your neighbors. Why do retired cops need to make $200K? Why do you need a high speed train to nowhere? Ask these questions before asking why your neighbor pays $1800.
Exactly. Our rulers use ‘divide and conquer’ to get us fighting each other over things like Prop 13 tax inequality, which distracts us from seeing who is really getting the best deal here, which are the entities taking and wasting and/or stealing our hard-earned dollars. They do this with everything, including the racial division currently tearing many of our communities apart. The real culprits? Look at the banking families. Look at George Soros, who funds the dissent (he was behind ‘Black Lives Matter’, and I’ll bet he’s behind the anti-Prop 13 movement as well). Wake up people, and open your eyes. Your neighbor is not your enemy!
It’s obvious that prop13 is incredible unfair. Repeal that scam. The bubble will end the minute you repeal it.
Is Prop13 a disguised form of welfare?
Why should non- owner occupied units be protected under Prop 13?
It’s debatable whether they should (maybe limit it to one or two other properties), but fixing that needs to come after repealing the commercial property and inheritance protections, which probably has a better chance of passing.
Prop 13 was sponsored by lobbyists for apartment owners. It included all real estate, not just residential. There is currently an attempt to get a repeal of Prop 13 for commercial property on the 2020 ballot. I’m worried how such a repeal would affect our economy, especially brick and mortar retail. Tax retail commercial property more and you make it tougher to compete with big on-line retailers with warehouses in flyover country.
The repeal would not affect residential real estate whether owner-occupied or rental.
Joe,
Let me tell you this as someone who has many rentals. When my taxes go you by $1 I raise rent by $1. So repeal Prop13 all you want. But all it will do is raise your rent. Socialism never works bro.
Mr L: I wasn’t arguing against Prop 13. I was pointing out its origins which were to protect homesteads, rental residential AND commercial RE from property tax inflation. Its primary sponsors were in the residential rental business. Its supporters at the polls were primarily owner occupiers, but that is because people in the rental real estate business (and I am one also) are a minority. WI Downey was wondering why non owner occupied property was protected by Prop 13. The fact is that this was an important reason for putting Prop 13 on the ballot in the first place. I have really low property taxes on my rentals in Oregon due to a similar measure there. However, it would not be as easy there to pass along a tax increase. My property becomes harder to get rents from when gas prices go up because it is 25 miles from a major town. Right now a shortage in that town is making it easier to rent. But an economic downturn would hurt the rental market.
I will vote against the measure to repeal Prop 13 on commercial property that WILL be on the 2020 ballot. I am dubious about the benefit of giving the extension of Prop 13 tax breaks to non-occupiers of inherited residential real estate, but that is a minor thing to worry about with all of the other problems besetting our state.
I happen to be one of these people (along with my 2 siblings) that inherited a house that my mother lived in, which was purchased by her parents in 1955 for $16K.
The house rents for $8500 / month (on 16th Street, North of Montana Ave) and the tax base is $300 per month.
the passive income (split 3 ways, minus taxes and reserves) will augment my retirement by about $2K per month.
Well, what can I say, I am enjoying the Prop 13 tax rules…if we were taxed at current value, we’d have to sell the house, but then who would buy it for $3.5M and then pay $30K per year in taxes, surely no on this blog who is complaining about Prop 13.
@QEAbyss
Please stop repeating this same story. Yes, yes, yes we all know you inherited a house, you pay low taxes, you rent it out for big $$$… blah…blah…blah. Good 4 u.
Every time the DR. posts a new story you go ahead and repeat this same thing. At this point it sounds like your either bragging or very insecure.
At $8500/month or $102K per year, you would likely be able to pay the property taxes on the updated value of the house.
You could just raise the rent to cover it.
I hope Our Millennial isn’t your tenant.
Bob is 100% correct. Leftists don’t understand how the world works. Business taxes – which is what property taxes are in this case – are never paid by businesses. They are simply passed on to their customers. Increase property tax by 10%, guess what I do as a landlord? You got it. I increase rent by 10%. In the end, it’s a wash for me.
Just because your cost goes up doesn’t give you the ability to raise rents. Theoretically you should already be pricing your rents at maximum value. Your cost of operating just hits your margin since you are already maximizing rent.
Rents are set based on area incomes not your costs. If the increase in taxes crushes your margin and prevents you from turning a profit then the value of your asset will also fall to compensate.
@MR. Landlord
Actually increasing your rent will have a peak and you will likely be eating that 10% in less rent profits.
You miss the point. If the property taxes were correct(not Prop 13) on all of these homes they wouldn’t be worth 3.5 million to begin with.
Exactly! There’s going to be a rude awakening when Prop 13 is effectively stripped to nothing and then they’ll all rush for the exits because prices will take a hit along with a reduced basis no longer being inheritable.
The effect of property taxes on home values is infinitesimal in desirable areas. There are 1.5-2.4% taxes on assessed value in the northeast, and their most desirable areas are just as outrageously priced as ours if not more so.
There would definitely be some effect on values, but already, taxes on newly purchased property are sky high. So I doubt you’d see million dollar properties going down by more than 10% for this reason. Repealing the commercial property tax break would be more likely to have a big impact on those property values (especially retail space).
It’s obvious that prices come down as soon as you repeal prop.13.
Many older people own several properties and would be motivated to sell ones prop13 falls and they have to pay their fair share in property taxes. The market would be flooded with houses for sale which will result in hefty price reductions. Obviously, RE cheerleader hate the idea of reduced prices so they will say or do anything to keep prices sky high.
So prices drop 5-10%. As Landlord has already pointed out, owners would just raise the rent to cover it. As for those with vacation homes, they would just suck it up and pay it, because the part you aren’t getting is that property taxes in California are already low even for new buyers.
John,
i disagree, “property taxes in California are already low even for new buyers.”
New buyers pay a tremendous amount in property taxes. 1.1% of the purchase price.
Prices are sky high at the moment. Its translates into new buyers paying several times more in property taxes that most boomers next to them. Its like a scam.
Saying that taxes are low is like saying you dont need AC in Temecula during summer.
Yes. Oregon has limits that the State has explained in this report:
https://www.oregon.gov/DOR/programs/gov-research/Documents/303-405-1.pdf
This article explains the limits in layman’s terms:
https://www.oregonlive.com/politics/index.ssf/2014/03/three_misconceptions_about_ore.html
As a long time property owner in both CA & OR, I benefit in both states. Lucky me!
Unfortunately for you, both Oregon and California have horrible governors with the last name of Brown and both state legislatures are completely controlled by loony leftist DemocRATs.
Overheard a conversation at the grocery store between a millennial (who has no interest in politics) and a 50+ year old (republican).
I was just there to get food for the next few days (avocados, salt and some toast).
50+: I cant believe these stupid people. Now they are attacking prop13. Just how stupid are some people in this state?
Millennial: actually, I am one of them!
50+: seriously? Prop13 is the best thing that happened to us. Why would someone in their right mind want to repeal prop13?!?
Millennial: several reasons
50+: I cant wait for that one….I was on my way to play golf but want to hear that one! All ears!
Millennial: appreciate your time. I hope we can have a honest conversation. May I ask what you are currently paying for your several million dollar home in property taxes?
50+: AHA, that’s where this is going! Typical socialist thinking! No offense, but you snowflakes need to grow up!
Millennial: I am actually with you on that, I don’t like socialism. I am not a fan of the government picking winners and losers. I don’t like when markets are manipulated by government subsidies that benefit only a few. May I ask again what you are paying in property taxes?
50+: why does is matter? Are you just jealous? You can’t accept some people do better than you so you have to destroy it?
Millennial: all I want is an honest conversation but I might have to give up. Enjoy playing golf!
50+: don’t be a snowflake….I pay 2grand….a little bit over 2grand.
Millennial: 2grand! And your house is worth what? 2million?
50+: yep! And btw., Neighborhood house just came on the market, priced at 2.1mio. You should go for it. Hahah
Millennial: so if I buy that house next door my property taxes would be over 23,100 dollar a year? My wife and I work, saved a lot, outstanding credit. But we would never be able to afford the house, left alone the property taxes on that!
50+: if you are trying to make me feel guilty. Not working. Why don’t you start with a condo?
Millennial: yep, A nice condo costs me about 700k. Almost 8grand in property taxes. Basically 4 times what you are paying. And your house is like 3 times bigger!
50+: are you sure you are not a communist? You sound like one. In this country, hard working people will be successful. Accept it or whine all day.
Millennial: if I remember correctly, you owned two houses at some point (including the one you live in)? The house you own used to be your parents home?
50+: yep, I bought my first home when I was 28. Nowadays, 28 year old live with mom and dad and play Xbox all day. Anyways, a couple years ago I inherited my parents home and decided to sell my other home. That let me retire early! I sold it for a large profit!
Millennial: so, essentially, you enjoy locked in property taxes and pay next to nothing and new buyers like me finance it. You are basically getting a freebie while others pay an arm and a leg?
50+: I am done listening to this crap. Instead of getting polluted by internet conspiracy theories you should get some extra income. I am late. I play golf now.
Millennial: one moment. Just what would be so bad if you would have had to pay property taxes on the inherited house based on market value? You got it free and clear, what’s so bad about paying the fair share…like 20grand in property taxes?
50+: 20grand!!!! You really are nuts! I budgeted for 2grand. I banked on prop13.
Why don’t you think for a moment? You dads a landlord…you inherit his houses. Do you want to pay more taxes? You’re generation is really messed up…asking to pay more property taxes….insane! Go back to your Xbox!
Millennial: just because I profit from prop13 later on when I inherit real estate doesn’t make it right or has anything to do with what I said. It’s a government subsidy that benefit a few and screws many by putting the tax burden on them. We all should pay our fair share.
Millie, don’t turn this into republican vs. democrat. You can bet your ass that the majority of wealthy people in CA who benefit from Prop 13 vote democrat.
You are right. Personally, I have little to no interest in politics. In the last election a con artist ran against the most corrupt politician (Hillary). If these two clowns are the best our country has to offer……. that should tell you something.
Another fascinating Millie piece.
Truly titilating material Young Shakespeare!
Yawn… TLDR
Sry, I know it went longer than I originally planned.
It’s really good though. I even read it twice. U are missing out if you don’t read it. Will take you only 25 seconds or so. Enjoy
Millie you live an interesting life. None of your friends make over minimum wage yet you shop at a grocery store where 50 year old Republicans and 25 year old socialists spark conversations about housing. LOL
Oh and what about the part where the 50 year old evil rich white Republican said he hates women, minorities and children? Was that before or after the Prop 13 part?
How did you get that through that whole Millie piece?
I got through 3 lines and was exhausted afterwards.
50 year olds rocked out to Nirvana.
You make it sound like he listens to Bing.
50 year olds rocked out to Nirvana.
You make it sound like he listens to Bing.
Time to start backpedaling, Millie. That obviously never happened. This is why no one believes a word you type.
That was the most contrived conversation I’ve read in a long time. Obviously never took place other than in Millie’s fevered mind.
Agreed. He calls BS on many of our anecdotes, when in fact he’s the liar.
When I or someone else in the industry posts on here, we’re liars.
Everyone is lying and he lives in his own fantasy world. Sad
A little update from the lending trenches here.
Inventory seems to be up a bit and properties are sitting a little longer. Properties that had multiple offers within days are now getting less offers or actually have to hold multiple open houses. I am definitely hearing from agents that the market has cooled.
This is far from a crash and definitely not a buyers market (yet), but, feels like a little bit of a turn towards a balanced market where sellers cannot ask for the world and get it. Still a lot of buyers but I don’t see the same ferocity as I did the past 18-24 months. May be a pause or may be a turn, who knows, I just thought I would give an honest assessment.
As a homeowner I would like to see values increase, but, as a mortgage broker lower prices is better for my business. Stay tuned…..
Dan,
“Inventory seems to be up a bit and properties are sitting a little longer. Properties that had multiple offers within days are now getting less offers or actually have to hold multiple open houses. I am definitely hearing from agents that the market has cooled.â€
No way! The market has cooled? It’s not like that’s on every news page…what would we do without our friendly lender who is just here to help and inform!
What’s weird to me is how you stated just a couple months ago how there is no inventory. Somehow that story changed quickly and the market is turning now. Funny how this works. And funny how quickly things can change…
Please keep us posted!
I grew up and went to high school and college in S.CA so I go back to visit family and high school friends frequently.
I had a very similar conversation as yours with a friend whose parents were still living there.
What I noted is that friends whose older parents and now retirees who had purchased a house in the late 70’s and were still there.
Absolutely everyone high school friend whose parents had rented during this time are long gone. Rents in Coastal CA forced them out in the 90’s.
My similar conversation with my friend’s parents was:
1) They worked as a trash collector all their lives and eventually moved into management when they couldn’t do the manual labor anymore. They managed to overextend in the late 70’s and buy a small house for 50K.
2) They don’t have a pension so they are living on 1500/month in Social Security. This is 18K per year.
3) Their house value for a 3 bedroom nicely kept but not updated 1960s tract house has gone from $50K to $1M. It is paid off Their property taxes are about 2K/year with the Prop 13 2% year increases. The property taxes would be about 12K/year at the current value.
They are very concerned that they will be forced out of state or intto a trailer in Bakersfield if Prop 13 is repealed. How can they afford to live when they are 80 and their income is 18K per year and their property tax would be 12K per year?
Do you really want to kick my friend’s 80 year old parents out on the street for inability to pay property taxes?
Most Prop 13 beneficiaries don’t belong to a golf country club.
My friend is doing well and owns his own house (with a mortgage). I don’t think he should inherit the house and inherit the 1970’s 2K per year property taxes and rent it for 6K/month.
It is sad, and unfortunate, but your friends 80 year old parents cannot afford to live in Coastal CA. They are not entitled to stay because they were there first. Prop13 has perpetuated an this entitlement at the expense of higher taxes on everyone else.
Let me draw a comparisons. My friends 80 year old parents have lived in a Coastal CA rent-controlled apartment. The land lord needs to raise rent. Do you really want to kick my friend’s 80 year old parents out on the street for inability to pay high rent?
To be fair, I cannot afford the taxes on a $1,000,000 tract home in Coastal CA either, nor am I entitled to have one.
Prop values are very strongly tied to demand/interest rates/investor sentiment.
Prop13 is a form of protection of long time home owners who would be otherwise punished just because there is a lot of speculation or interest rates are dropping.
You can think of it as a form rent control/SEC controls/etc….
It protects those who buy a house for UTILITY.
The 80-year-old couple are not entitled to live there? Excuse me, but the only entitlement unlawfully exercised here is that of the government. As long as you have to pay property taxes at all, you do not own your property. You’re renting from the government, who gives back nothing in return in recent history. Stop paying the ‘rent’, and they kick you out of your own house.
Surge described the real value of Prop 13.
Karin and JD also get why property taxes are wealth taxes and are unfair.
Here is a conspiracy theory that I am starting.
The Fed lead by bankers lower interest rates and drive housing prices to to incredible heights.
Lobbyists in CA revoke Prop 13 and millions of fixed income people cannot afford to pay their property taxes so they must sell their houses.
Millions of new houses enter the market and due to supply and demand, housing prices crash 70%.
Our Millennial is dancing in the street until he realizes all of these properties are now owned by the state for back taxes or the banks for foreclosure.
The Banks swoop in to save the day by buying all of the houses at 80% on the dolllar and package them into REITs and rent them back to millions who lost their houses.
This is why property taxes are unfair and could be abused by artificially raising home values.
This conspiracy theory may sound familiar. It is what happened to many foreclosed homes in 2008. The Blackstone Group and other banks are now making money on people forced out their 2008 homes.
Bob, that is a conspiracy, but it’s not a theory. The late Bob Chapman, who wrote the ‘International Forecaster’:
“Seven years ago, we wrote that Fannie Mae and Freddie Mac were broke, and everyone within the beltway knew it. We said it was America’s way of nationalizing housing, with 60% as a goal. This way, renters could be herded hither and yon wherever government wanted to put them. Since then, both Freddie and Fannie became wards of the US taxpayer.” (July 2010)
You’re lying. You didn’t “overhear” that conversation. You made it up. (Which is why I skipped it after the first few lines of fictitious dialog.)
And yet you call other people’s anecdotes “lies.”
Son of a landlord, No shit Sherlock!
The conversation is of course a representation of younger people (mainly millennials) who have to subsidize older people (mainly boomers) – who enjoy dirt cheap property taxes. It highlights how entitled boomers are and how selfish they act. I also liked how I implemented the standard response by some Republicans. Everything that doesn’t benefit them must be labeled as socialist or communist. But they welcome the government subsidies that they receive and that others have to pay for. I like the hypocrisy.
This conversation I outlined doesn’t just happen here, it happens daily, everywhere. Can happen in your grocery store or when you get your nails done. Younger people are fed up with the scam that benefits a few and screws the rest. You should be more focused on the content not with the introduction sentence. Btw, I also did not buy just avocados and toast even though some of you think that this is our daily nutrition (and the reason why most millennials have no money for a downpayment).
Sorry folks, but Millennial is right about Prop 13. Much like religious zealots, Prop 13 defenders will come up with any rationale possible to defend something that is clearly unfair. If you don’t like the way property taxes are levied, fix the problem…don’t pick winners and losers like what’s being done with Prop 13. The same argument goes for Affirmative Action. You don’t solve discrimination by creating more discrimination.
Wow, that’s a very detailed conversation you recalled. You must have been using a voice recorder or had a notepad handy. Maybe you’re a trained court reporter? You are so full of shite.
hahahaha.
I was thinking the same thing, amazing recall he has!! Add that to his list of amazing virtues and talents.
Socalguy
To answer your question, I didn’t utilize a voice recorder. I have an excellent memory. As one poster said, thats another talent I have to offer.
Are you just jealous?
There seems to be a lot of that is these threads, those that got/get the freebies are calling the rest of us that are saying WTF jealous…..it’s a shell game to look here look over there!!!
What I AM jealous about
I’m not one that the government chose to make whole again.
My industry isn’t protect by the government
the government not prosecuting bankers for the control fraud that caused the 2008 GFC
being allowed to live mortgage free for 48 months
I’m not close enough to a senator to get the sweetheart contracts for the not HSR
an illegal alien can afford to have 5 kids when 2 about broke me
of people that can watch the nightly “news” and actually think it’s true
I’m sure there’s a bunch more
Prop 13 will never die. And, renters will always complain about not making enough money to buy an expensive home. Renters never get to retire because rent just goes up. Nothing ever changes.
My rent hasn’t gone up yet. The days of prop13 are numbered
jt, that is 100% correct. Prop 13 is here to stay. It may get revamped in one form or another, but Prop 13 for primary residences ain’t going nowhere. If Prop 13 were to get repealed, what would happen to long time big apartment owners who just got hit hard with tens of thousands of additional property taxes. You can bet your ass that rents are going up!
Only fools believe in never. Just ask all the libs how smug assumptions of never worked out in November 2016.
Very true. Be cautious when RE cheerleaders talk about never or ever. It’s usually just a cheap sales pitch. “Buy now or be priced out for-everâ€
“Interest rates will never be that low in our lifetimeâ€, “if you don’t buy soon you will never own†etc.
I do not get why you are so hung up on prop13. The point is to de-couple your decision and emotions from something that is absolutely beyond your control (and no, you personally will contribute exactly zero to prop13 status).
Who gives a shit about prop13. fair or unfair, it does not matter, it will enable anyone to buy a house.
Surge, I dont expect you to get it.
You bought in 2005 and 2017. One could not time the peak better than you and you actually said price does not matter. You also said that paying 200k down and 1500 dollar more than a renter is rental parity. You have been my rockstar in providing material. I wish you luck!
I can see the commercials for Repeal Prop 13 already. The vast majority who own a home will get a tax increase, the vast majority who rent will get a rent increase, government will get more money to wisely spend. We need your vote, Repeal Prop 13 today. Bwhahahahahaha.
Millie,
I bought at peak because I do not care to save money. Honestly, I do not. I like to earn money and and spend it on quality things. Home included.
I buy when I want it. I would rather work hard (which I rather enjoy) and get things when I want them. I dislike sales, it really cheapens the experience of life.
Frugality, coupon clipping, endless waiting and fear, propaganda of cheapness – are all so stupid and eventually lead to the path of being delusional like you are.
Surge,
“Millie,
I bought at peak because I do not care to save money. Honestly, I do not. I like to earn money and and spend itâ€.
Exactly! I appreciate your honesty! And you know what? You just keep doing your thing. There wouldn’t be boom And bust cycles as dramatic as they are if they weren’t people like you. We can’t all be like you and we can’t all be like me.
“Frugality, coupon clipping, endless waiting and fear, propaganda of cheapness – are all so stupid and eventually lead to the path of being delusional like you are.â€
Here, I can’t agree. I am very frugal wenn it comes to overhead spending. I usually buy things used and much cheaper than retail price. (Like cars, cell phones). My monthly payments are extremely low(low rent, low electricity bill, low car fuel, stream internet shows instead of cable etc). Groceries are already so cheap (Aldi, Walmart). It’s not necessary to utilize coupons. I am not sure what you mean by endless waiting. RE boom and bust cycles move in ten years. What’s ten years over a lifetime? I do go on vacations regularly. I usually combine it with my business travels. I do collect lots of points and play the credit card games. I don’t like to pay for nice hotels but like to stay in them. You have to put a bit of work in for that.
Again, I thank you for being honest. What I don’t understand is why someone like you is here on a bubble blog!? If everything is so awesome by buying at the top then why are you here? You obviously don’t care about your money or if things that you bought lose in value. Money has no value to you as you like to spend it right away. So what your agenda? Trying to convince us that your path leads to prosperity?
Correct jt. Anyone who is renting past 30 year old is doing something wrong.
Landlord, its not about the age its about timing the market. E.g. living with your parents as a 40 year old can be very smart to save money and then buy when the market crashes by 55-75%. That guy who buys low wins big time…..a buyer like surge who buys in 2005 and 2017 will never be able to catch up with the buyer that gets in at a bargain. Its just simple math.
Many decent beach cities are at least 50% above the 2005, and they are still rising. Milli, you already lost.
Some homes are still not back to where they were in 2005. And looking at the current market, it seems they wont for a while. I am seeing some nice houses sitting on the market all summer. Second wave of price reduction and open house after open house.
Sucks to be a seller who already bought somewhere else and needs to sell the old house for a certain price. You cant say there weren’t enough warnings….
Any home in a good coastal location is well above the 2005 level. End of story.
Looks like JT is pissed about the recent price drops, increased inventory and high volume of open houses.
Jt predicted at the beginning of the year that this spring season will be epic….rofl!!
It looks like I was right… a few month ago I said we reached the peak. Now MSM and realtards are admitting it too.
every home worthwhile is at least 10% above 2005-2006 levels. If some homes are not, there is probably a good reason. Yeah, you already lost Millie. Keep hiding your impotence behind your theme to time the market.
What’s very obvious during this time (i call it phase 2: higher inventory, a ton of open houses and price drops) is that the remaining RE cheerleader are in denial. And they seem to get more aggressive. Fun times ahead. I see houses that were bought in 2005 and are still not back to the old levels. Now, sellers are trying to get out before the bust. At a small loss. Pathetic if you ask me. Over a decade later selling at a loss….shows you how crucial timing is. It’s actually very simple. Buy low and sell high. I will be buying in about two years (according to my calculations and experts, RE in prime areas should be 55-75% below today’s prices).
There is an issue with the Texas property tax example that should be clarified as it is slightly misleading. Texas is about choices. Texas has no state income tax, thus necessitating higher % property taxes that fund schools, municipal utility districts, etc. A landowner in Texas can choose a lower cost property with lower taxes, or a higher cost property in a nice part of town (with nicer schools) and pay more in taxes. It’s the property owner’s choice where to live and, essentially, how much to pay.
Property taxes are unfair because they are a wealth tax based on home value that is out of your control and is difficult to extract money to pay the tax without being forced out of the house. . A state income tax is more fair since you can control how much you make and it is in money that can be used to pay the tax.
If grandma bought a 50K in Texas in the 1970s and her taxes were at 5%, she would be paying 2500/year in taxes back then. If she is now retired and living on Social Security and her house is now assessed at $1M, her taxes would be 50K/year.
There is no way grandma afford this and will be evicted from her house of nearly 50 years. This is completely out of grandma’s control. She’s on Social Security and has no control over her income.
Texas is much worse than CA due to this.
This is a false statement:
“There is no way grandma afford this and will be evicted from her house of nearly 50 years. This is completely out of grandma’s control. She’s on Social Security and has no control over her income.”
Grandma is a capable human being. She has the control and choice to make more money, save more money and how she spends her money. If she lived a life that left her with nothing but her house and social security, then that was a lifetime of choices and opportunities within her control. Taxes are certain, she should have been prepared to pay them or be prepared to move.
Poor grandma is nothing but a straw man.
My point is hypothetical Grandma had no control over her house value rising from 50K to 1M. and her taxes going from 2500 to 50K.
Grandma must sell and move to pay her taxes. Government is forcing her out of her house of 40 years.
Nobody should be forced from their house due to taxation after paying it off and paying years of taxes. That is the problem with property taxes. They are a wealth tax. I agree with sales taxes and income taxes since they are under a person’s control. The assessed value of a person’s house is not under their control.
However, if Grandma wants to sell and become a millionaire in reality, that is her choice also.
JD, you must not be old enough to know what inflation can do to a fixed income, no matter how high it is at retirement.
@See it all before Bob “Nobody should be forced from their house due to taxation after paying it off and paying years of taxes. That is the problem with property taxes. They are a wealth tax. I agree with sales taxes and income taxes since they are under a person’s control. The assessed value of a person’s house is not under their control.”
I agree with your take on property taxes (I am completely against any). However you say that inflation is beyond her control (or yours when you get older) but at the same time you advocate higher and higher minimum wage. Did you ever stop to think about the consequences of that ????!!!!….I’ll spell it for you – it is called INFLATION after it’s working it’s way through the system. All lose – poor and middle classes – only the banks and politicians benefit. INFLATION is the most regressive form of taxation. Consequently, those on minimum wage will suffer the most. However those on minimum wage are not educated to understand that and the liberals take advantage of them.
So, when grandma or you vote liberals “and collectivists” for higher minimum wage, you do have a choice and you vote for higher inflation. However, higher inflation will not make it easier for you to pay your mortgage because at the same time the collectivists liberals want millions more illegals and Trump is “mean and racist” for not supporting them in that race to the bottom (for the middle class).
Life is not fair. Unfair is a losing argument. Neighborhoods change—which can increase demand—there are no guarantees. Death and taxes. Older people should know better. Life is about selecting options. It’s a choice to stay in a changing neighborhood and state. Get out while you still can is often the best choice in hindsight.
Housing market is a cluster fuck. We desperately need a hard crash, job-loss recession, deflation periods to heal it.
http://www.bloomberg.com/amp/view/articles/2018-08-21/housing-is-back-but-the-american-dream-isn-t
The good thing is that all that wealth is being handed down to us. For our retirement age we will be fine.
More great news
https://www.zerohedge.com/news/2018-08-22/fomc-minutes-another-hike-soon-see-emerging-markets-trade-risks-yield-curve
Expect two more rate hikes in 2018!!! As you can see over and over again, when rates increase prices for homes fall. That’s what we want/need….Realistic home prices again. Increase rates and make this market great again!
Sorry Millenial, but long term rates aren’t rising, only short term rates are going up. In fact 30 yr mortgage rates have receded a little from 4.75% due to weakness in the 30yr treasury yield. Mortgages are not based on the short term rate. You need that 30yr treasury note to increase well over 3% for a substantial increase in 30yr fixed mortgage rates.
Fact is, mortgage rates are the still lowest they have been in many many years. And if the yield curve inverts like some predict they will stay that way.
Millie, like most of his peers, thinks history started the day he turned 18. He doesn’t realize that 4.75% is historically low for mortgages. He doesn’t know that in the 70s and 80s mortgages were well in the 15% range. He doesn’t know throughout the 90s, mortgage rates were in the 7-9% range. Nor does he realize that even in the 2000s, 5 and 6% rates were common.
Which is why he sounds so foolish saying rates going from 4% to 4.5% or 4.75% will crash the market. It’s like saying temps rising from 60 to 65 degrees equals a heat wave. Nah brah. It got a little warmer but compared to the 95 degrees of the 80s, it’s still cold outside.
Right now at my local credit unions rates are in the 4.25% to 4.50% range for 30 years and 3.75% to 3.875% for 15 years. Where is this supposed great interest rate spike I keep reading about in the doom and gloom world? Mortgage rates under 4% and you people are acting like it’s 1981 or something. Let’s get some historical perspective here people.
Yeah, but why would anyone even take the risk to lend long when short term rates are paying the same, or even more? There will be no one lending to the broke consumer wanting to take out their 30 year death pledge.
Fact is, mortgage rates are the the highest they’ve been in more than 7 years. With prices the highest they’ve EVER been. Don’t try to compare rates now to the 80’s and 90’s. Completely different country/population then. Society now is not capable of producing those yields. These yields where they are now are doing absolute carnage already. It just takes time. Patience.
Thank you! That’s a post for the archive folder. I have another post from a RE cheerleader clown saying rates will never go up again in our lifetime. It’s the RE cheerleaders wet dream that rates stay artificially low. You are in for a rude awakening. Let’s see where rates will be by next year….
Bro is another guy who gets it….needs to be re-posted!
“Fact is, mortgage rates are the the highest they’ve been in more than 7 years. With prices the highest they’ve EVER been. Don’t try to compare rates now to the 80’s and 90’s. Completely different country/population then. Society now is not capable of producing those yields. These yields where they are now are doing absolute carnage already. It just takes time. Patience.”
Prop10 / rent control / costa Hawkins repeal
http://www.beyondchron.org/5-biggest-lies-about-prop-10-costa-hawkins-repeal/
I’m in favor of Prop 13. Why?
Property taxes are evil. Ask yourself, should owners of property be forced to pay rent to the state on something they bought?
Anything that miminmizes this tax is a good thing. Expecially for low income home owners.
So ask yourself, if you are against Prop 13, are you just a jealous loser, or are you a Statist who is opposed to private property rights?
“So ask yourself, if you are against Prop 13, are you just a jealous loser, or are you a Statist who is opposed to private property rights? ”
You are oversimplifying the situation. There are two distinct parts to Prop13. What it does and who it benefits.
I support limiting property tax. I do not support HOW it’s benefits people unequally and how it manipulates the market.
And don’t tell me that in 20 years I will benefit from the tax savings. Its not equitable that some get a major tax discount and other get a promise of a major tax discount.
Don’t be Wimpy. “I’ll gladly pay you Tuesday for a hamburger today”
“So ask yourself, if you are against Prop 13, are you just a jealous loser, or are you a Statist who is opposed to private property rights? â€
It’s not an OR question. One can be both a loser AND a statist. In fact most statists are losers and most losers are statists.
“Property taxes are evil. Ask yourself, should owners of property be forced to pay rent to the state on something they bought?”
They didn’t *buy* anything. They got *a lease* from _state_ that they may use a piece of land. Which part of that is too hard?
There is no such thing as ‘land ownership’ in any Western country. Haven’t been in decades: You lease country from the government and that’s that. I’m not happy with that but taxes pay roads and such, better with them than without.
Any land anywhere eventually is owned by the state, not an individual. No matter what you believe: The state can use the army to prove you wrong if necessary, you can’t.
Another angle: So the roads and schools just appear without taxes? Or that the poor ought to pay same dollar amount in taxes as the millionaire, from ‘a house’?
If you want a palace, pay taxes for a palace and stop whining: That was all your own choice as no-one really needs a palace.
Prop. 13 muddles all that: The lucky, i.e. the old rich, get their palace cheaper than any new buyer gets a crap shack.
“Protection” for future tax rises is totally irrelevant as the tax is still 10 times than what the majority of old properties are paying. And 2% raise to 10* the amount is still 10* the raise and the gap gets even wider, not narrower. Too complicated mathematics?
Then some greedy people, who enormously benefit from that, want to keep it that way. Sure, let me live for tax free while the youngsters pay all the taxes, including the raises.
Literally stealing tens of billions in unpaid taxes statewide. Then some poor schmuck has to pay the stolen taxes in his taxes.
Taxes won’t get lower by not paying: They won’t rise so fast if and when everyone pays their share in full. But only then.
That’s an observation some people fail to make. By ignorance or willfully, I’ve no idea.
Prop. 13 has really only one function: Major transfer, i.e. theft, of money from poor to the old rich or their descendants.
No other reason exists, but oh the amount of word play around that function, very clear in comments.
Thomas got it!
You try to make it like the property taxes are the only taxes people pay and without them we can’t have roads and schools.
In case you did not know, people already pay high sales taxes, high income taxes, high state taxes, medicare taxes, SS taxes and a whole list of other taxes. The money, they way the government uses them are fungible. There is not a trust fund just for SS. There are plenty of money for roads and schools; we don’t need house nationalization on top of all the other taxes. You sound like a typical statist/collectivist.
Yes. Roads and schools do just appear without taxes. Learn some history. The public school system has apparently fooled you into believing that without taxes, civilized society doesn’t exist despite a vast amount of historical evidence showing otherwise.
In 1900, a high school graduate was exponentially better educated than a college graduate is today And without an income tax, without a sales tax and with very low property taxes. There was no Dept of Education either. No teachers unions either.
Fast forward 118 years and we have high schools graduating functionally illiterate 18 year olds and colleges providing remedial reading classes. Blame it on all Prop 13 right?
Thomas,
This is an excellent summary.
I have a few exceptions.
Prop. 13 has really only one function: Major transfer, i.e. theft, of money from poor to the old rich or their descendants.
This should read.
Prop. 13 has really only one function: Major transfer, i.e. theft, of money from poor to the old rich OR OLD POOR or their descendants.
The old poor purchased a house when they were poor in the 1960’s – 1980 with a set tax payment per year limited by Prop 13.
This tax payment should NOT be raised to a 10X amount based on the inflated values rich Millennials or rich Boomers pay for a house at a peak of a Bubble which is happening now.
There are many poor Boomers who are living on Social Security fixed incomes. 20% of CA seniors live below the poverty level. Prop 13 is allowing them to live in a house they purchased long ago. Repealing Prop 13 would force them out of their houses they have been living in for up to 50 years. This is government taking of property of the poor elderly.
No inheritor of this property should inherit the tax on the house unless they have been a resident of that property for at least 3 years before the death. This covers any inheritor who has a caretaker/parent on the property. These inheritors are likely poorer than the parent and should not be forced out of the home they live in.
They should restrict Prop 13 to the living. When grand dad dies, the property should be re appraised to market. The kids can sell the place and take the money to Vegas and party.
Asaaand more great news
https://www.zerohedge.com/news/2018-08-23/us-housing-market-slump-continues-new-home-sales-tumble-july
It’s amazing to me that so many people think raising taxes on the rich somehow magically lowers taxes on the poor. All it does is give the govt more money to waste on high speed trains to nowhere and $200K pensions for govt workers. But I guess in the world of Bernie and Fauxchohantas that’s the new mentality; eat the rich and see what happens. It’s only failed 100% of the time in the past 100 years. But I guess CA will make it work, LOL.
No one here is saying that.
Yes they are. Read between the lines.
JD@ “We need to install a better tax control on government. I am a big supported of the dollar caped solution. No primary residence shall pay more than $X,000.00 per year, with the ability for it to rise no more than 2% per year. Remove all the transferring and inherited benefits as well.”
That is how it should have been done from the beginning. With that we wouldn’t have all the aberrations associated with Prop. 13. Don’t get me wrong. I am for no property taxes on personal residence. However, if people like to be taxed (slow nationalization of personal residence), it should have a limit in how fast the government confiscates a personal residence (a communist/collectivist ideology). In Switzerland they have that and it is a MAXIMUM $1,500 per YEAR. Fine, if you want it indexed at 2%/year; personally I would prefer 1% per year. Don’t worry! With those property taxes in Switzerland, you get better schools and better roads than in CA even with those heavy winters which are hard on roads. Of course, Switzerland does not have sanctuary cities and they don’t have the spending with millions of illegals – but that was their choice (they like the Germans to do that).
The higher the property taxes, the more corruption you get.
New IRS rule on deductions hits California, other high-tax states hard
https://www.pressdemocrat.com/business/8668090-181/new-irs-rule-on-deductions?sba=AAS
“In a statement, Cuomo said eliminating full state and local tax deductibility will cost New York families $14.3 billion a year and that the effects already are being felt, citing declining home sales in some wealthy communities.”
beautiful! very beautiful news!
The mortgage deduction was the biggest deduction for most middle class people who had enough deductions to not use the standard deduction. I started making extra principal payments in the early 2000s, and when I paid it off in 2009, we were already getting more of a deduction from taxes than interest. I haven’t had to itemize the Federal tax since 2012 when I increased my 401k contributions. Last year was the first time since then that I got a small break for itemizing for the state taxes. I am sure that it is absolutely pointless for me to save the information for itemizing the federal taxes, but don’t forget the 10% state income tax for middle class earners. Itemizing there may pay off even without a mortgage.
SOL@ “The aristocracy was blindsided by the French Revolution. Most never saw it coming.”
That reminds me of our Democrat aristocracy which were shocked by Trump coming to power. They did not see that coming because they were out of touch with the middle class and their desire for jobs not just freebies. They thought they could outsource all the jobs and bring millions at the same with no consequences. They were also out of touch with the american desire for freedom trying to chip constantly on both 1st Amendment and 2nd A. They also thought that the americans are stupid and don’t see Obamacare for what it is – the most regressive tax slammed on the back of the middle class to the benefit of insurance companies owned by Wall Street.
2/3 of houses turn over (at the higher tax rate at sale) in 10 years. Anybody arguing against Prop 13 is arguing for government to get even MORE money to waste. Don’t get me going….
Doesn’t matter what the turnover rate is, any amount of free riding by some at the cost of most others won’t last forever.
The tax grab for MORE has already been long underway, although some people are proportionally paying more while getting LESS than others in return, so the writing is on the wall for the gravy train to end sooner rather than later.
I’ve been in the industry since 2002. (SoCal)
Needless to say, I have seen a few up’s and down’s. IMO you are not going to see a crash like last time but the writing is on the wall. I’d say most buyers have gotten the memo but sellers haven’t yet. Sellers are still in the anxiety/denial phase. Obviously, the RE market moves slower. It takes time to shift sentiment and perception. What’s clear to me though is the direction we are headed to. Some sellers still think its just seasonal. If you think the slowdown is due to end of summer what are you going to say when we see a continuation of price reductions until the end of the year? This time last year, I saw 10 offers flying in for quality homes. To be fair, quality homes still sell but its nowhere near to what it was last year.
This is how they take over. Political types always yell about how “Latinos don’t vote,” but given their numbers it hardly matters.
First, you notice that a majority of little children at the elementary school level are Latino. Then bilingual signs appear in the grocery stores. Then sh*tty little stores selling burner phones and money wiring services. Then a few fatal DUIs, often killing elderly White people or, as in the case of the guy who made A Christmas Story, a family. Then the local Police Department has a “Gang Enforcement Unit” and their budgets are now through the roof. Then the civil rights cases start, so your local cops start pulling over you going to work at 68 in a 55 zone, while studiously ignoring the beaner beaters completely out of code and not street legal.
Then there are zero White kids at the primary level. “Social Services” becomes code for “Free stuff for Latinos.” To the extent people are still walking around in your town, they are 4’11” latinas, each pushing three kids in strollers and each so pregnant they are wider than they are tall. Then the state comes in with the “women and infant children” program, congratulations, sucker, you’re paying for those kids.
Then the annual New Year’s Day story about “the first baby born here in X!” mysteriously always feature a blank-eyed latino couple, and the white anchors coo over Baby Rodriguez or Gonzalez. You begin to notice that you haven’t seen a White baby be the first born in the New Year for ages.
A few more years pass, and every service job imaginable is filled by brown people. The town you grew up in, with young White kids hustling to mow lawns, and local high school teenagers working at McDonald’s and Dairy Queen is dead as a doornail. In fact, speaking of fast food, you used to like to grab it on the go every once in a while but now ordering is an ordeal and the food always sucks..who puts that much mayonnaise on everything? (Answer: Latinos)
The new Gang Enforcement Unit isn’t doing too hot, so they need more manpower, bigger budgets, maybe hire a few consultants from the L.A. County Sheriff’s Department to help out. PTA and other school meetings are now held in Spanish, because 85% of the students’ parents speak Spanish in the home.
A few old family restaurants have been bought out. One–it was Jack’s Family Restaurant, you remember it fondly from when you were a kid–is now purple of all things and it’s called “El Pulpo – Mariscos” whatever the hell that is.
A few old bars are now hangouts, and one is Salvadorean and the other Nicaraguan and there are fights. People get stabbed. Fire Chief says he needs more paramedics, budget needs to go up, so property taxes go up again.
Local hospital is in crisis due to ER room write-offs in the tens of millions. They shut down. Now, if something happens, you need to go to the City, about 40 mins away, maybe 25 if the ambulance is going Code 3, but what if something happens? That was part of the community here. Now, it’s all strip mall “Urgent Care” places run by arab-ey looking “doctors” and rumor is that there is a lot of Medicare/Medicaid fraud going on.
Your high school, the one you lettered in and still go to all the football games, now has a metal detector at the entrance and two cops posted there full time. There are fights between the latinos and the 20% of students left who are White. The school counselors are now all bilingual and latino and they have posters up on their wall from strange organizations like MeCHA, that speak openly of “Brown Pride.”
You’re paying through the nose in taxes. No public benefits are going your way. Now, your youngest is getting to high school age and you’re thinking private school, but, Jesus, how will you afford that?
Well, it’s Sunday, so you’re not going to think about it right now. You’re going to watch some football with the guys while your wife takes the kids to the Aquatic Center for some swimming and cute pictures. Just not going to think about it right now.
And then you hear your wife pull up and the car door slam. She walks in all business, herding your three children in to go upstairs and change out of swimming clothes. You notice: no one is wet, or has been wet.
“What happened? Is everything all right?”
“No, it’s not all f**king right. You won’t believe what happened. I’m standing there juggling towels and floaties and the Parks and Rec guys are telling me it’s now $10 a kid for a day swim pass, so I roll my eyes and I’m digging in my purse to get my card out, and then all these little mexican kids go flying through the front door and I’m like ‘Hey, why aren’t you telling them they have to pay’ and the guy is like ‘They have red wristbands” and I say “So?” and he says “it’s a program we have here at the Aquatic Center for disadvantaged youths so they get the benefit of swimming and lessons in a safe environment” and they just kept piling in and I’m thinking we’re already paying through the nose in taxes, and now I have to cough up money for OUR KIDS WHO WERE BORN AND RAISED IN THIS TOWN so these people can swarm the pool for free.”
You’re hoping she’s done there, but she’s not. You can feel Sunday slipping away. The “boys” can hear everything going on, but you can bet your ass they’re staying out of this one. She continues:
“And there were so many of them, and they were SCREAMING AND YELLING and it was chaos, and I just, I just, couldn’t do it, so I told the kids we were leaving and I turned around and walked out of there. Then, before we get to the car, James starts crying, says it’s ‘no fair’ and that I promised we’d go swimming today all week, which is true”
And she’s looking at you, because, you know the deal, you are responsible for fixing this. You think. Or maybe she’s just venting. But you do what you can.
That night, you get the Sunday Night Blues and Monday morning comes around, and you’re driving into work and you’re looking around your town and you’re thinking:
This isn’t my town any more. I don’t know what to do. I don’t know what to do.
Am I racist? Jesus, am I becoming one of those guys. I sure sound like one of those guys.
And you’re stopped at a red light a few blocks from the office and here they come, slow walking across the crosswalk, two toddlers in tow, one in a stroller, and both pregnant, and both talking as loud as they can into two cell phones.
And you laugh, because hey, it’s all okay, because these people right here, right in front of me, them? They don’t vote much.
https://mpcdot.com/forums/topic/9420-ice-ice-baby/page__st__3120#entry4…
Hahaha…. it’s actually a well written piece. Yeah, illegal immigration has a lot of negative effects.
Although, the tone of your article is exactly how the Native Americans felt lol…
@oceanbreeze
1. You’re making his argument in favor of stopping migration for him, considering it didn’t work out so hot for “Native Americans”.
2. Speaking of “Native Americans”, we now have evidence proving that Stone Age hunters from Europe were in America thousands of years before “Native Americans”…. so who are the real natives?
https://www.independent.co.uk/news/world/americas/new-evidence-suggests-stone-age-hunters-from-europe-discovered-america-7447152.html
California “Boomer Life†TM:
Works/worked average career or trade job
Owns a primary house they paid $250k or less for that is now worth $750k-$2mil depending on town/city, enjoys Prop 13 low taxes. Sometimes owns 1 lake/mountain/beach area 2nd vacation home and/or 1 rental property they rent to millennial for $2,500-$5,000 a month depending on town/city. Often acquires parents home when they die and uses as a $3,000 a month rental or sells for a quick $1mil cash profit, ocassionally rents or gives to their own children that are otherwise priced out but not usually.
Owns 1 nice brand new or newer primary car or sweet big truck and a second prestigious cherry classic car that is housed in the crapshack garage and/or nice motorcycle and/or nice RV/ deluxe House on wheels camper trailer.
Takes multiple small trips per year to Vegas, Tahoe, the 2nd lake house,etc. takes a few 1-3 week vacations to international hot spots and/or Hawaii where they may also own that 2nd Maui house they bought back in 92’.
Average California millennial/Gen.Y life( anyone under 40 that doesn’t isn’t a tech mogul/doctor, doesnt have rich parents, large inheritance and/or family money to help them buy a house)
Works an average career or 2 full-time jobs or 1 full time and 1 part time job and/or works a good career or owns small business earning $100-200k and/or splits living costs with significanct other combing 2 incomes.
Rents a crappy substandard apartment or condo for $2,700 a month or rents a crap shack from boomers for $3,000-4,000 a month or lives with multiple roommates in an average sized house paying $1,500 for a bedroom and kitchen/ common area share. Younger millennials often found living at their parents house rent free well into their mid to late 20s because the rent is too damn high.
Owns 1 car or truck that they make payments on monthly ocassionally but rarely has 2nd vehicle or motorcycle, if they do it usually “needs work†or is average unlike the Boomers perfectly restored classic car or $35-50k Deluxe edition Harley. No RV or luxury $100k camper trailers, occasional small trailer or strange camping trailer apparatus hooked to their 2005 Subaru or Toyota truck that has 200k miles.
Travels wherever whenever possible but travel is usually very limited to a couple times a year for a reasonable timeframe due to high cost of living and rents
I think that RE prices will go up because people will feel more euphoric now that another globalist and warmonger is gone (John McStain). It feels almost the same as when Klinton lost the elections.
It’s not quite as much a relief (understatement!) as when Hillary lost, but the world is certainly a better place with that globalist traitor (McCain) gone.
Note: This ridiculous but mostly true rant is based on the “Average Boomer†life, this probably accounts for 60-70% of boomers. If they had a high end white collar career or a successful business and/or large inheritance they are “Boomer elite†status and they are somewhat wealthy and live way better and bigger than this. If they had a severe drug/drinking problem, a bad divorce or life event or made really bad financial decisions they are in the “Sub-Boomer†demographic and can usually be found barely working, riding a bicycle and/or old beat up truck around town dressed like they’re still 25, drinking a beer, chain smoking cigs renting a random rent controlled apartment or house share with roommates.
California “Boomer Life†TM:
Works/worked average career or trade job
Owns a primary house they paid $300k or less for that is now worth $750k-$2mil depending on town/city, enjoys Prop 13 low taxes. Sometimes owns 1 lake/mountain/beach or out of state area 2nd vacation home and/or 1 rental property they rent to millennial for $2,500-$5,000 a month depending on town/city. Often acquires parents home when they die and rents it for $3,500 a month to a dumb millennial couple or sells for a quick $1mil cash profit, ocassionally rents or gives to their own children that are otherwise priced out but not usually.
Owns 1 nice brand new or newer primary car or sweet big truck and a second prestigious cherry classic car that is housed in the crapshack garage and/or nice motorcycle and/or nice RV/ deluxe House on wheels camper trailer.
Takes multiple small trips per year to Vegas, Tahoe, New York City the 2nd CA lake house,etc. Aleays takes a few 1-3 week vacations to international hot spots lie Europe,New Zealand, Japan,etc. and/or Hawaii where they may also own that 2nd Maui house they bought back in 92’. Boomer elite always has a 2nd house in Hawaii, average boomer usually just visits Hawaii frequently or owns a nice little condo there.
Generally has some other type of financial “investments†and money socked away from their rental property, inheritance and/or career benefits.
Average California millennial/Gen.Y life( anyone under 40 that doesn’t isn’t a tech mogul/doctor, doesnt have rich parents, large inheritance and/or family money to help them buy a house)
Works an average career or 2 full-time jobs or 1 full time and 1 part time job and/or works a good career or owns small business earning $100-200k and/or splits living costs with significanct other combing 2 incomes.
Rents a crappy substandard apartment or condo for $2,700 a month or rents a crap shack from boomers for $3,000-4,000 a month or lives with multiple roommates in an average sized house paying $1,500 for a bedroom and kitchen/ common area share. Younger millennials often found living at their parents house rent free well into their mid to late 20s because the rent is too damn high.
Owns 1 car or truck that they make payments on monthly ocassionally but rarely has 2nd vehicle or motorcycle, if they do it usually “needs work†or is average unlike the Boomers perfectly restored classic car or $35-50k Deluxe edition Harley. No RV or luxury $100k camper trailers, occasional small trailer or strange camping trailer apparatus hooked to their 2005 Subaru or Toyota truck that has 200k miles.
Travels wherever whenever possible but travel is usually very limited to a couple times a year for a reasonable timeframe due to high cost of living and rents.
Generally has little to no savings or investments due to the absurdly high cost of living and rent, ocassionally does have money saved and/or some financial investments but not nearly enough to put a downpayment on a California crapshack.
PricedOut, you just described my life when I was young and my life now.
Yes, it is normal when you just start in life with no money and just student loans to have very little. I came to US without knowing English, no clue about this culture and no support from anyone. That was my life in my 20s and 30s. I was rich just in kids (4 of them). My wife had to stay home to raise the children so I was struggling for decades with one income and going to school for graduate work (at night). My wife’s parents and mine were as poor as they can be (zero RE and zero investments); therefore, no inheritance for me. By necessity, I learned to live very frugal and delay any form of gratification.
Fast forward, decades later, children have their income and I have millions. However, I did not get there overnight. It was super hard and many times I was thinking that life is not fair. Other people were speaking English fluently and it was easier for them to get better jobs. On top of that, they had help and inheritances from both parents and sometimes relatives. They also had connections for good jobs. However, instead of wining (never helped anyone), I worked harder and I became even more disciplined with my life and finances. Over decades it paid off.
In conclusion, there is no substitute for hard work, learning and delayed gratification. Some people get something much faster, without effort, but they lose it just as fast.
Remarkable. I have a similar story, without the kids. Also, I was only 3 when we moved here from Germany. I ended up running away from my dysfunctional home at 17, with $2 in my pocket. Almost wound up on the streets, but I got a job at a 24-hour restaurant in Oakland. I worked the night shift, and finished my senior year in high school during the day (during which my grades went down while I tried not to fall asleep!). I paid for my college books and tuition on my own, and didn’t graduate until age 30 with an engineering degree. I didn’t get a dime of help from either parent.
On the bright side, people like you and I made it on our own, and can be much prouder of what we’ve accomplished. I don’t think we would have appreciated things as much if everything had been handed to us. I didn’t have parents I could stay with, like Millennial has, which would have made things so much easier. But hey, he doesn’t acknowledge things like that. He has a victim mentality, when in fact he’s riding on everyone else’s dime.
Thanks for sharing that. You set a good example for your children.
Flyover,
You are what the American dream used to be about. Come over here from the old country without a dime in your pocket, and become rich in a generation or two. Oh and learn English since there was no Press 2 for (my language) option. I grew up in a ‘hood with a lot of immigrant families from E. Europe. And your life was pretty much their lives. Parents came here with nothing and 10-20 years later had a nice house in the ‘burbs. And much like the stereotypical Asian mom today, the Polish/Ukrainian/Czech mom back in my day was all about education. I know how to say “did you finish your homework” in about 12 languages, lol.
Those days are over. Now the American dream is cross the Rio Grande, press #2 for Espanol, go on welfare, vote Democrat and cry racism 24/7. Rinse and repeat for the next 5 generations.
I get the age gap correlation and how we all usually improve our incomes with age but I don’t think you Boomers get it 100%. I “work hard†and am smart with my money but at the same time the cost of living and real estate now is so much higher than its ever been the quality of life isn’t even compariable. There is no entry level real estate for anyone even making a decent living to buy anywhere that’s worth living in California. Even in crappy areas like Oakland and way out in the nether reaches of Sonoma county and 4 hours from a city in SLO the property is waaaaay off base with incomes and outrageously expensive.
Boomers were able to work average jobs and buy a house in the decent areas where the jobs are in CA, have a boat, a couple of cars, maybe a vacation house or 2nd house ,etc. I am definitely better off now at 35 than I was at 25 but I still have to pay $3,500 a month in rent and utilities and houses in my area cost $850k and up, most are over $1mil. for a mediocre crapshack. I wish it were as easy as “just move†but there are no jobs for my careeer in the boondocks and cheap areas and I own a small business so it is hard to just pick up and go even though I do think about it a lot. There are parts of California that are much cheaper and other states that are 1/10th the cost of the Bay Area but it’s not always possible for normal working people to just move to a new spot.
That’s why that one guys kids all live with him, they can’t afford to live on their own because of the cost of living. And if they do “work hard†and make a good income they can pay $3,500 a month for rent like me and the ever rising PG&E bills and outrageous income taxes which will make it indefinitely impossible to one day buy that $900k 1,000 sq ft out dated ranch house/crapshack. They can spend their days on Realtard.com like me looking at amazing properties in other areas dreaming they could maybe buy one some day or patiently wait like Millie for property values in the liveable areas of California to magically drop 80% so that a CA crap shack is affordable to those of us that make under $300k a year.
I realize Boomers worked hard to buy their homes and interest rates were higher back in the day but it was realistic for you guys. I did the math on a friends parents house, they paid 95k in 1982, using an online inflation calculator that was about $240k or something in today’s money, totally doable!!!! Today their house is worth around $1.2 mil and it’s just an average house, nothing crazy fancy. Boomers have no idea what we are facing and that unless you win the lottery it is almost impossible in most these areas to ever own any house in California even condos in my area are $700k and up!!! And the cheaper areas of California the pay is terrible or there are no real jobs so the lower property values there balance out to equally unaffordable for someone that has to work for a living to pay the mortgage and taxes.
I get the age gap correlation and how we all usually improve our incomes with age but I don’t think you Boomers get it 100%. I “work hard†and am smart with my money but at the same time the cost of living and real estate now is so much higher than its ever been the quality of life isn’t even compariable. There is no entry level real estate for anyone even making a decent living to buy anywhere that’s worth living in California. Even in crappy areas like Oakland and way out in the nether reaches of Sonoma county and 4 hours from a city in SLO the property is waaaaay off base with incomes and outrageously expensive.
Boomers were able to work average jobs and buy a house in the decent areas where the jobs are in CA, have a boat, a couple of cars, maybe a vacation house or 2nd house ,etc. I am definitely better off now at 35 than I was at 25 but I still have to pay $3,500 a month in rent and utilities and houses in my area cost $850k and up, most are over $1mil. for a mediocre crapshack. I wish it were as easy as “just move†but there are no jobs in my career in the boondocks and cheap areas and I own a small business so it is hard to just pick up and go even though I do think about it a lot. There are parts of California that are much cheaper and other states that are 1/10th the cost of the Bay Area but it’s not always possible for normal working people to just move to a new spot.
That’s why that one guys kids all live with him, they can’t afford to live on their own because of the cost of living. And if they do “work hard†and make a good income they can pay $3,500 a month for rent like me and the ever rising PG&E bills and outrageous income taxes which will make it indefinitely impossible to one day buy that $900k 1,000 sq ft out dated ranch house/crapshack. They can spend their days on Realtard.com like me looking at amazing properties in other areas dreaming they could maybe buy one some day or patiently wait like Millie for property values in the liveable areas of California to magically drop 80% so that a CA crap shack is affordable to those of us that make under $300k a year.
I realize Boomers worked hard to buy their homes and interest rates were higher back in the day but it was realistic for you guys. I did the math on a friends parents house, they paid 95k in 1982, using an online inflation calculator that was about $240k or something in today’s money, totally doable!!!! Today their house is worth around $1.2 mil and it’s just an average house, nothing crazy fancy. Boomers have no idea what we are facing and that unless you win the lottery it is almost impossible in most these areas to ever own any house in California even condos in my area are $700k and up!!! And the cheaper areas of California the pay is terrible or there are no real jobs so the lower property values there balance out to equally unaffordable for someone that has to work for a living to pay the mortgage and taxes.
Priced Out, I understand you 100%. I did not live for nothing. Actually it is easier for you than it was for me – English is your native language. Get to China or Japan and try there. Because I understand that conditions today are different, I already mentioned before that you have to move. The population in CA today is double than it was in my youth. You can not shrink that to create the same price/wage ratio. That time is gone- you cry over spilled milk.
Given the circumstances you can not change, you have to plot your own path. I lived in CA before and I moved; the best decision I ever made. Yes, it is hard. I moved countless times and changed my career 4 times. Don’t fight the wind, use it for your sail.
Believe me, I traveled extensively and I still do – I’m a globetrotter. US, with all its problems, still offers the most opportunities, even if they are no longer in CA or Oakland.
In my case, when I moved I had to move with 4 children not just myself.
your rant is a bit off. I have a buddy that was a steel worker in his youth and was making $30 an hour in the late 70’s……union.
He bought his house for $90K and it’s now worth close to $700K BUT here’s the rub and the wrinkle……most of his kids still live at home, none of them earn close to what he did in the 70’s and they are NEVER leaving, and he knows it. One of them is in his mid 30’s
Interesting@”…most of his kids still live at home, none of them earn close to what he did in the 70’s and they are NEVER leaving, and he knows it. One of them is in his mid 30’s…”
There are lots of problems with that picture. Nobody is keeping him by force in CA. Nobody is keeping his children by force in CA. I changed countries and many states to accomplish something. Nobody gave me anything. I would do it again than living with my parents in my 30s. I would rather have my own family and live in Midwest with a good standard of living than living in my parents basement in S. CA. But that is me.
I am not saying that his children can replicate what he did many decades ago in S. CA. I understand that there are different conditions now – first of all a much higher population. Still, this is a great country and I would search my opportunities somewhere else rather than being a basement dweller in my 30s. My son married at 20 at the beginning of medical school and lived on his own ever since. I couldn’t keep him home if I wanted to. It did not have anything to do with the relationship he had with his parents but with his drive and spirit of freedom (to be a man). We continue having an excellent relationship with him and daughter in law, but they are independent. That is how it should be if they are raised right. The way I see it, the parents failed and the children failed (unless they have a serious handicap).
I understand that not everybody is scholarly inclined but there are so many trades where you can have your own business and earn as much as a doctor. Still, you need the drive and not being entitled.
I agree it’s ridiculous, mainly because it’s describing two wildly different age groups, both with unrealistic net worth/incomes. Yes, on average a gen X or boomer family is going to be better off than a millennial. That’s what time and hard work get you. I do acknowledge that it was easier for previous generations, but as a gen Xer I was not well off in my 20’s and early 30’s. It was never easy. Owning a property in a metro or on the coast wasn’t even a consideration for any of my peers at that age, and we didn’t complain. Today, complaining about that very fact is a millennial specialty.
“…earning $100-200k and/or splits living costs with significanct other combing 2 incomes.”
I quoted that particular line because $100-200k is both inaccurate for most millennials and a good income for virtually anyone (it buys a lot more than is assumed in the rest of the description), even if it’s a combined income with a spouse/roommate, unless you’re an idiot and insist on living in a downtown loft. It seems as if the loudest complainers are in the metros – you only hear crickets from flyover country, because those millennials can buy property and weren’t dumb enough to move to LA.
Looks about right. Boomers are about 30 years from millenials, so they have 30 years to get to the boomers level.
Your theory about the average “Boomer life” quickly falls apart when you travel a few miles inland from the coast to crime infested barrios of SoCal where English is rarely heard.
Here’s a listing for PricedOut in a prime LA location:
https://www.zillow.com/homes/for_sale/20932601_zpid/33.980653,-118.246837,33.968838,-118.266042_rect/15_zm/2_p/
Single Family residence, close to Frwy’s, Shoping, central location, easy commute, hurry will not last.
sounds like a real treasure….”8 beds 2 baths 1,580 sqft”
And the rusted metal bars/fence/gate with the tow truck parked out back.
Prop taxes are only 1750/year for this wealthy boomer.
did they get hollywood to do special effects? rain in LA?? love that pic, and as the governor has said the drought is over, quit falling for scare tactics folks Flyover not so far from you except i had a language advantage growing up,,after they moved me from cali ,it was all bad, no future in sight, 760 population in town and i was seven miles from it,first job herding goats 4 miles from home,,,fast forward, now doing well thanks to lots of hard work and ok investments,,,there were times i thought i would never afford a home,, thought i had been priced out { now deciding which to sell} ,,still just renting from the bank,,,but its my place and i seem to get lots of benefits from owning,,,currently trying to relocate out of usa but thats a story for another day as i sit in rented house( 350 month) overlooking next home project
did they get hollywood to do special effects? rain in LA?? love that pic, and as the governor has said the drought is over, quit falling for scare tactics folks Flyover not so far from you except i had a language advantage growing up,,after they moved me from cali ,it was all bad, no future in sight, 760 population in town and i was seven miles from it,first job herding goats 4 miles from home,,,fast forward, now doing well thanks to lots of hard work and ok investments,,,there were times i thought i would never afford a home,, thought i had been priced out { now deciding which to sell} ,,still just renting from the bank,,,but its my place and i seem to get lots of benefits from owning,,,currently trying to relocate out of usa but thats a story for another day as i sit in rented house( 350 month) overlooking next home project in a different country
Lol!!! Wow, I can live the “Boomer life†too! Prop13 will even lock my property taxes in at an amazing $550 a month. Oh wait, Boomers would never have to live in a barrio slum and they would have nabbed a way better deal in Newport Beach or Agoura Hills back in 85’ for $124k. I guess I am screwed and have to keep renting a $1 mil. crapshack for $3,500 a month to live in a semi decent area with jobs and some bit of English still being spoken even though all the liberal boomer idiots around me want to make my town a “sanctuary areaâ€.
Now that the market is headed down……..we see open house after open house and price reduction after price reduction…….the RE cheerleaders got very quiet. I guess cheering for a losing team isn’t as much fun.
Decent coastal locations are very strong. Owners of these locations are smiling.
How many aliases are you going to use, Millie? It’s painfully obvious to those of us with more than two neurons. Real or imagined, you’re still outnumbered.
Outnumbered? Where would be the fun of the majority on here would be bears? Zero fun.
There would be no reason to be here if we would not have IE shills (John) and RE cheerleaders like tankinsight, jt, Lord blank fein, surge, wheelindealin.
I have been on blogs that are dominated by bears. Boring.
Now that the RE market is taking a turn the next few months and years will even be more fun!can you imagine me celebrating and partying once we hit the recession??!
Dude, almost forgot mr landlord!! Spokanistan shill! He adds a lot of entertainment too.
Whatever you say, crypto shill.
Muhaaaha, someone losing steam?
Crypto shill! Oh my, the far opposite….right now is time to accumulate for me. Last thing I want is another frenzy anytime soon.i buy over time a little bit. In a couple of years once Wall Street is running the show they will do the shilling for me along with marketwatch, zerohedge and the others. The masses will get involved and will chase the profits. When that happens you run with it for a bit and start selling.
To me, it is kind of ridiculous that someone missed an opportunity to buy a house on the last downturn, then wishing for another Great Recession so that he/she can buy a house at 50% off. Great Depression or Great Recession will bring many people down with losing their jobs (can be anyone), losing their houses, companies go bankrupted, more homelesses etc. Recessions can happen, but personally, I wouldn’t want to see another big one. It would affect a lot of people. I graduated back in 2010. It was hard to find a livable job at that time, same for many of my friends and family members. Many were laid off.
I don’t call that ridiculous, I call that being smart and financially responsible.
I did not miss an opportunity in 2010. I was young and finished my BA during the Great Recession. Now I am well established in my career (several promotions and make well above 100k) married, no debt, and had luck with selling crypto at the right time(we all know it’s not just luck but let’s call it that). Also, my stock investments went well, I profited from the nice bull run. Now, the avg joe would probably decide to buy their first RE at that point but I decide to wait it out. I am waiting patiently until the ship goes down again.do I give a crap if someone decides to buy during the peak and loses their job later? Dude, I am not forcing them to buy high! I don’t run a charity. Do these people care if the market is too high and overheated? No, they love it because homeowners love when their book value goes up. It gives them a good feeling. This is America, it’s -I got mine screw the next guy- type of deal. Don’t give me that sob story, I couldn’t care less. Housing is a numbers game. If you get emotional you are too soft.
The Case Against the Property Tax
Only the federal income tax is consistently rated as worse than the property tax in opinion polls. There are a number of reasons why the public seems to resent the property tax. These include: (1) the taxation of unrealized capital gains by the property tax; (2) the fact that it is paid in large lump-sum payments by many taxpayers; (3) public anxiety about reappraisal of property values; and (4) inequitable assessments and appraisals.
Taxing Unrealized Capital Gains. The property tax is levied on property values, or wealth in a sense, and not on income or consumption like the income tax or the sales tax. Thus, those who are cash poor, like many retirees and elderly, may own property which has considerable value but lack the income necessary to pay property taxes. Other taxes, like the income tax, defer taxing capital gains until such time as the taxpayer actually realizes income from a gain. The property tax doesn’t defer taxing such gains. Thus, someone who bought a home in an area that appreciates in value a great deal will have to pay taxes on the growth in value, even though their income may not have grown accordingly.
Karin,
This is a great summary. I agree with you.
This is why we need something like Prop 13. Otherwise, people will be forced from their houses by unfair taxation during housing bubbles. ie can’t afford the taxes in 2006 (or 2018) due to a bubble and then forced to sell, while in 2009, due to the crash and 50% value lost, they could afford the taxes.
Why Prop 13 is unfair is that the increase/decrease in taxes is capped at 2% of the home value.
It is unfair in both directions.
1) If a house increases 5% and inflation is at 14% like under Reagan, both wages and fixed income (SS) will increase by inflation. The local schools, fire departments, police departments, etc need the inflation adjusted tax to pay teachers and fire departments. Prop 13 is capped at 2% without any regard for inflation. Communities will starve, and police, fire, and schools will be cut.
2) If inflation is below 2% like it has been the last decade but housing prices have been increasing 8% per year, then homeowners who are workers and on Social Security and other fixed income recipients, are potentially being forced out of their homes due to taxation due to the 2%yearly increase in property taxes. Without the Prop 13 cap, it would be much worse.
Prop 13 taxes should be tied to inflation and not some arbitrary 2% based on home values.
If Prop 13 is eliminated, and taxes are based solely on property values for the entire
housing market, then it is likely to cause unstable oscillations in the price of housing.
ie housing values in a bubble, force homeowners out of their houses due to high property taxes causing a glut in home sales, causing a crash.
Nobody should be forced from their house due to taxation. Prop 13 prevents this but since it is not based on income or inflation, it is unfair to all.
Bob~
You write:
“If a house increases 5% and inflation is at 14% like under Reagan, both wages and fixed income (SS) will increase by inflation.”
I bought a house in 1998, and sold it in 2005, during which time inflation was quite high. My house went from $285,000 to $740,000 right before I sold. During those 7 years, I worked as a civil engineer for the State of California. And during those entire 7 years, under Pete Wilson and Gray Davis, I received a total of 0% in cost of living increases. In fact, my pay went down, because in some of those years we were furloughed by up to 24 hours per month. Meantime, my State health insurance contributions went up every year without fail, so my takehome was less every year. Also during those 7 years, my property taxes went from around $3000/year to over $4400/year. That’s more than 2% annually, because California does not put a cap on bonds and parcel taxes that can be loaded onto your property tax bill, on top of the 2%.
Do Not assume that everyone’s wages increase in line with inflation. That is a fairy tale. Ask Social Security recipients as well about this.
Karin,
Under Reagan in 1981, inflation was at 14%. SSI increased 14% and my salary as a new engineer increased 16% (14% COLA and and 2% raise).
My house property taxes increased 2%. Yay Prop 13! But entirely unfair.
I hope Reaganomics never comes back.
Bob~
Those were different times. Back in 1981, I was also getting 16% interest at the bank on a short-term deposit (one year). I had $25,000 saved that was earning me ~$350/month, upon which I paid no taxes because my waitressing income was so low. My rent on a 2-bedroom apartment on Lake Merritt in Oakland was $135/month, and my PG&E was $10/month. House prices were a fraction of what they are now, and property taxes were the same. That was a one-time situation where property owners got a break. You can’t compare it to now.
How much are you making at the bank, Bob? If you own a house, how much are you paying in property taxes?
Bullshit. Property tax is a levy on consumption. Services are being consumed by the real estate asset. The asset holder receives value in return. The value received is proportional to the value of the asset and confers potential to unrealized gains. I know some people argue we should pay for services on a usage model but that’s out of scope for this response.
Your complaint is actually with the price of the services being outsized to income growth. It’s a reasonable objection because oftentimes the real value of the services decrease relative to the cost, but what won’t stand for long is an increasing amount of consumers subsidizing the costs of ever fewer beneficiaries.
This is the situation in California. Either you get it and make the choice to stay/GTFO or wonder what happened when the rug gets pulled out from underneath. No amount of Internet comments are going to stop the direction of this train.
Interesting trend:
https://medium.com/social-capital/why-we-invested-in-hubhaus-9b040092cacf
LA is already 60-70% renters depending on the area.
The home ownership rate will only go down in the future and renters will increase.
There is no question about this.
Just look at Europe for the future.
Socialism = renters. It continues to amaze me how generation after generation fails to see this. A small group of people own all the property under the socialist schemes in Europe. Guess who that group is? The people running things, ie the top socialists. LOL.Much like how Bernie owns 3 homes in Vermont and Lizzie Fauxcahontas made a killing in real estate. But hey….STUFF!!!
“Socialism = Renters”
In the extreme.
Just like
Capitalism = homelessness and starvation in a good game of the great Capitalist game of Monopoly.
There is a balance of both required.
Today, we are like a good game of Monopoly entering the final turns with the leading 1% owning 90% of the board and the rest of us trying not to lose their properties.
“Socialism = Renters”
In the extreme.
Just like
Capitalism = homelessness and starvation in a good game of the great Capitalist game of Monopoly.
There is a balance of both required.
Today, we are like a good game of Monopoly entering the final turns with the leading 1% owning 90% of the board and the rest of us trying not to lose their properties.
Thanks for posting this. When I inherit my mom’s house I will likely use their service.
Nasdaq crossed 8K yesterday. Amazon is within spitting distance of $2000.I loaded up on Amazon calls during the last stock market “crash” of a few weeks ago. I may need to call a doctor my boner has been going on much longer than 4 hours. And I say “crash” since every time stocks go down 0.25% the MSM screams about how it’s all over and we’re back to 1929. Much like how the doom and gloom crowd does with housing. One or two months of bad news and it’s 2007 all over again.
We have Down at 26K again, Nas above 8K, GDP growing at 4%, unemployment UNDER 4% (has there ever been a time when UI was lower than GDP growth?). And on top of all that, inflation at 2-3%. If you gave me a magic wand and said, make the economy however you want, I’d pretty much make it like it is today. It doesn’t get any better.
And yet what is the MSM focusing on? Strippers and a guy who cheated on his taxes 20 years ago. And that’s why so many of you here are under the absurd impression that we’re in a recession right now, or about to be. You will be supremely disappointed by peeps. My advice is stop watching Rachel Maddow and figure out what’s actually going on.
Translation: You don’t need Cialis when you are on the winning team!
NorCal buddy, I realize MJ is legal in Cali these days, but come on bro, all good things in moderation.
Spot on Mr Landlord!
Things couldn’t be better! That’s why millennials are going out and buying houses in droves! You can easily tell, because there is no inventory! Not a single house for sale! Most millennials have never heard of an open house since they have never seen one! Its like telling them about a Nokia phone. And homebuilder stocks….through the roof!
And no end in sight to this fantastic bull run! Expect this to go on for another ten years! We’ve just started and Spokanistan will experience a boom never seen before!
To “seen it all before, Bob”:
I didn’t known there was anyone on Earth who made it past 8th grade, who still believes that Marie Antoinette ever said Let Them Eat Cake. That malicious myth has been long debunked.
She never said it. In fact, she and her husband gave copiously to charities every year, and had their kids donate their Christmas gifts to poor children. In spite of her youthful extravagance- remember, we are talking about a KID of 19-25 years old, before she got frugal- she spent nothing like the amount of money in her whole life on her pleasures, that Josephine Bonaparte spent in just a couple of years.
No figure in history has been so maligned, who did so little to deserve either her reputation, or to be murdered by a savage mob.
Dear Laura,
When I was in 8th grade, historians considered this to be the truth.
I must be old. History is rewritten every day. More history is rewritten recently under Trump.
However, it is a common allegory describing how the arrogant wealthy treat the poor.
The allegory is “Marie was eating caviar and filet minion while telling the poor to eat the poorest food, cake” The aristocracy owned 99% of the wealth at that time in France and the poor couldn’t pay rent or even buy food. This was the main driver for the French Revolution (So I was told in 8th grade) and the violent deaths of many of the rich aristocrats at the time. I’m sure the poor starving people of France demonized the rich with alternative fact stories like this to justify their actions but it did not help the rich.
My comparison was with the comments of the rich today who tell the poor to “eat cake” by telling them to be happy and stop complaining about a pittance the rich throw them. For example, the poor person making 20K per year and their yearly rent is 24K per year for a cr*pshack. Telling them to be happy with 2K per year pittance thrown to them doesn’t help pay the rent let alone buy food while the rich collect six figures. Telling them they are lazy and cutting Food Stamps will be the final straw I fear.
Fortunately, the US has seen this before in the late 1920’s so there is an outlet. They elected the most socialist President ever, FDR, for 16 years.
The rich people were not happy with this but it was the most democratic outcome of their arrogance.
History does repeat itself.
The allegory is “Marie was eating caviar and filet minion while telling the poor to eat the poorest food, cakeâ€
I thought I made it clear. Cake was never a poor person’s food. It was an expensive treat.
Re-read my above comment for what the allegory actually conveyed.
You’re someone how knows neither historical facts, nor the subsequent allegories that are spun in its wake.
No real historian even thought Marie said it. It’s always been a popular myth. Maybe some grammar school history teachers helped spread it, but not serious historians.
PS: I went to 8th grade in the 1970s. Catholic school. Back then I knew the “Let them eat cake” tale was a fable.
I’m guessing you attended public school, and much more recently. Grammar school P.S. teachers have been dummied down, same as their students.
Serious historians (i.e., at the university level) never took that tale as anything but false propaganda.
Socialism has never worked. It will never work. It cannot work. Making socialism work is like me trying to fly. No matter how hard I may try and how good my intentions may be, it will never happen. FDR turned a 2 year recession into a 10 year recession**. Had WW2 not started, it could have gone on for another 10 years. See also Obama, Barrack Hussein who turned followed the same game plan and had the most anemic post recession recovery since FDR.
** Prior to WW2 the word “depression” was used to describe what we now call a recession, ie an economic slowdown. There had been several depressions prior to the 1930s. But in the 1930s, they added the word Great to it, hence the Great Depression. Post WW2 the economic powers that be decided depression was too mean a word, and changed it to the more gentle word, recession. But from a technical standpoint post WW2 recession and pre-WW2 depression mean the exact same thing. And that is your economics lesson of the day boys and girls.
Son of a Landlord.
Did 8th grade teach you the meaning of an allegory?
You should look it up.
It doesn’t have to be the truth but generally has a basis in truth.
Oh,
And the rich raising a poor person’s rent, cutting their food, and calling them dindus, likely won’t make the rich popular in the next election.
The arrogance is just stunning.
The MSM has always been #FakeNews. The CNNs of the 18th century were no different than CNN of today. They spread lies and misinformation. Difference of course is in the 18th century it was hard to fight back against the lies. Today it’s a lot easier. Which is why the left wants control of the internet. Can’t let those dangerous counter-narratives get out, people might learn the truth!!!!
Which is why the left wants control of the internet.
It didn’t begin with the left. In 2015 Jewish groups met in Israel to discuss plans to censor the internet.
Sounds like an anti-Semitic conspiracy theory, but it’s in The Jerusalem Post: https://www.jpost.com/Israel-News/Government-anti-Semitism-conference-endorses-net-censorship-403123
The only news channel delivering quality and truthful data is fox and friends! Everybody knows that including the president of the United States! Eat that you perma bears from
Zerohedge!
Well, the latest news is Trump is trying to control Google on what it reports on him.
The truth seems to be the right wing is trying to control the internet.
Millie~
The President listens to Infowars, not Fox News.
Ah! And I thought nothing beats watching fox and friends and live-tweeting it. Learn something new every day.
Santa Monica is offering cash to seniors, to help pay their rent: http://www.laist.com/2018/08/27/santa_monica_offers_cash_to_seniors_to_help_with_rent.php
watching the news and reading all that negative news about the housing market is fun.
This one is particular awesome:
https://money.cnn.com/2018/08/28/news/economy/housing-market/index.html
“How did we end up, ten years later, with debt levels almost at record levels and debt being a problem again”
Response from her:
“I am not sure we learned our lesson”
No shit! Oh boy, I so cant wait for the next recession….
Rinse and repeat folks. Thats why on this blog there is only one message to new folks/potential buyers:
BUY NOW! ITS A GREAT TIME TO BUY!
“Thats why on this blog there is only one message to new folks/potential buyers:
BUY NOW! ITS A GREAT TIME TO BUY!”
It’s all in your mind, Millie. No one here is saying that. You simply interpret much more complex topics as something simple that you’re capable of understanding. Black or white.
You’re like a cult victim. So entrenched and brainwashed and slow that nothing outside your world can reach you. Someone could agree with 90% of what you say, and you would attack them like a rabid animal for that remaining 10%. It’s sort of satisfying, actually – knowing you’ll never escape the cell you’ve built for yourself.
“No one is saying thatâ€
Yeah! Like nobody ever said here “buy now or be priced out forever!â€
And like nobody ever said “interest rates will never go up in our lifetimeâ€
And nobody ever said “THIS is the year when millennials go out and buy in droves “
And def. nobody ever said “THIS spring season will be epic†lol
I went back to a July article from Dr. Housing Bubble.
“jt
July 14, 2018 at 8:45 am
“Buy now or be priced out foreverâ€. I remember that phrase. When I got out of college in the 1990s, all the old people who where real estate wealthy told me that. So, I listened to them and purchased a bunch of run down beach close tear downs with nearly no down loans. It was a lot of work, like years of work, getting those places fixed, but it was worth it.
Good thing I did what I did. Because, if I had not bought, I would have been priced out forever and would have been a life long renter. Instead, I am retired in my late 40s. Although, I am working 25 hours a week fixing my rentals … so perhaps not totally retired, but I enjoy fixing houses much more than working 50 hours a week and paying rent.”
Translation: Buy now or be priced out forever….and be a life long renter.
…but no one is saying that!
Apparently you don’t understand the concept of “context”. Go play on your Xbox, Millie.
The whole point for utilizing these sales pitches is they can be applied anytime and without any context other than to sucker you into buying rather sooner than later.
When you are a RE cheerleader, is there ever not a good time to buy?
Stating “nobody ever said that†is silly because you can easily be proven wrong.
It’s like me saying nobody ever said “go play Xbox Millieâ€. In reality that’s john’s number one “punchlineâ€.
CNN?
CNN?
BWA HA HA HA HA HA.
Thanks Mills, I needed the early morning laugh.
Landlord,
We know you are not a fan of zerohedge. Now we are adding cnn to the list.
Just for you here is fox!
http://video.foxnews.com/v/5813828472001/?#sp=show-clips
Housing market is cooling off, 4% down
You love fox right? Lemme know
Good News Everyone!!
Sen. Kamala Harris is introducing a bill that forces landlords to lower rent. I can’t think of a single that will go wrong with this, can you? LOL. Oh and the bill has a really cool name too…The Rent Relief Act. They must have spent weeks coming up with that catchy title, huh?
So how will Kamala’s bill reduce rent? Easy. It taxes people in the other 49 states. So I’m sure the 98 Senators NOT from CA will be on board and this will easily pass. Right?
She obviously knows this has a snowball’s chance of actually happening. But she also knows that her voters in CA are imbeciles who will think she’s a champion of the people who tried to get those eeeeevil greedy landlords to lower rent for the Dindus.
It’s about time. Now I can raise the rent to affordable levels and my renters can be subsidized by government cheese to make up the difference. WINNING!
Here in Illinois, rent control/rent stabilization is on the table. Chicago is a renter-majority city, and public sentiment has been growing in favor of some kind of rent control, never mind the dismal experience of every city that has ever had it. In fact, I’m told Chicago experimented with it in the 70s, before my time in this city, but the results were so disastrous that it was dropped in a few years. In 1997, the Illinois Rent Control Pre-emption Act was passed, which prohibits any municipality in IL from imposing rent control.
Now, though, numerous studies find that a good half of the renter population here is “rent burdened”, with more than half their incomes going toward paying their rent, while many formerly poor inner city neighborhoods that are now desirable because of their proximity to downtown and rapid transit, and because they have a lot of attractive old buildings and abundant charm, have gentrified and rents in them are catapulting.
So, a number of bills have been introduced in the IL General Assembly and Senate. Two would merely repeal the Rent Control Preemption Act, leaving cities free to impose whatever controls they please, which would almost surely happen in Chicago because the sheeples voted in favor of rent control in a non-binding referendum.
Other bills are far more sweeping, notably a Senate bill that would impose rent “stabilization” on every residential rental structure in the state, including houses, apartments, condos offered for rent, trailers, lofts.. whatever is used as housing. Another giant state bureaucracy composed of 6 regional boards would be formed to regulate local rents. The bill would restrict rent raises to “stabilization” rates tied to the CPI index.
Needless to say, I’ve put aside any ideas I had to buy rental properties for income, but even more, I’m urging my fellow condo owners to impose rental restrictions on our association, preferably a complete ban on rentals, because rent control will be a disaster for condo associations. I can easily envision owner-investors unable to keep up with rising condo fees and taxes, and falling behind on their obligations due to the inability to raise rents to keep up with costs.
Needless to say, controls will be a disaster for the local rental housing market, for landlords, for the city, and most of all, for tenants. Were this bill to pass, no renter in Chicago would be able to find a place to live. New development would cease except for really high-end properties, and much rental housing stock would be removed from the market as owners either elected to occupy it themselves, sell it to an owner-occupant, convert it to a condo, or, if it is a really bad property, just let it run down until it has to be abandoned, and let it go to the city for unpaid property taxes, as happened in NYC during the post WW2 era, when the war-era controls were not lifted after the war.
It is unbelievable how economically illiterate people in positions of power are. And this woman wants to run for president in 2020 ?
https://www.harris.senate.gov/news/press-releases/amid-rising-costs-of-housing-harris-introduces-bill-to-provide-rent-relief
wooohoooo
“Mayors across the country should applaud Senator Harris’ proactive leadership in addressing the housing crisis impacting millions of renters,†said San Jose Mayor Sam Liccardo. “With the billions in tax subsidies allotted to billionaires through last year’s tax changes, this legislation provides a refreshing contrast for working families who struggle daily.â€
Let me summarize this for those who don’t want to read the whole K. Harris article.
Businesses have taken notice that they do not pay their employees enough to cover rent and other expenses. Businesses are asking the government for money to pay their employees via a tax credit to the employees.
Meanwhile Corporate Profits are at historical high:
https://d3fy651gv2fhd3.cloudfront.net/charts/united-states-corporate-profits.png?s=unitedstacorpro&v=201808291255x
Here is an idea, pay your employees more.
Kamala Harris rose up in politics on her knees. Go ask Willie Brown.
My wife and I would like to buy our first home. Recent news suggest to wait as we are going back toward a buyers market. I am curious to hear what you think?
https://www.marketwatch.com/amp/story/guid/2071FD46-AA40-11E8-A423-6B9D8ECA02D8
Tyron, people have been saying your exact statements for past 7 years on this blog. How did that work out for them? The fact is nobody can predict the future. Only buy when you can truly afford it and plan on owning for the longterm. Don’t over complicate this.
You’re wrong. Millie can predict the future. He is a RE pro. He tells us a thousand times a day.
Almost correct! You can see trends in RE.
It’s highly cyclical. The RE market is like a cruise ship. It turns slowly but once it sets for a direction it stays there for a while. You can see it nicely now. You’ll see( Roughly )about ten year cycles in California. All you need is patience, the right strategy and tracking skills.
Thx Lord Blankfein! I can see my wife nesting once we get pregnant. I believe a house must be part of our long term plan.
Tyron,
Buy now or be priced out forever! Jk, nobody would ever say that
Here!
Let’s do some math, what state do you live in? I assume you are renting, what’s your rent right now? Are you paying 20% down? Will your home have hoa’s? What’s your price range on the purchase? Married? The more info the better.
@Millennial
We live in Socal and we received a present from our rental company this year. Rent increased to $2,100 plus utilities for a small 2bedroom, 2bath!
My wife and I kind of like the condo-living-lifestyle. We don’t have to take care of the yard and enjoy access to a maintained community pool. The condo’s we like are about $450,000. Our mortgage should be close to what we pay our rental company (hopefully). This is per Zillow mortgage calculator.
How Much are the hoa fees?
How Much are you planning on paying down?
Do you want my social as well?
350 bucks for HOA and we’ll pay 10% up front (down payment).
You owe you landlord lunch! JK, a vacation!
Your loan is 405k, 30y conventional rates, lets say 4.7%, Interest $1,586, principal $503, you pay PMI and homeowner insurance, together 3,400 annually ($283 a month), HOA’s $350, Maintenance…I’d say put aside $200 a month. Chances are you are using the home inspector your realtard recommends (100$ walk through and sign-off, doesnt check anything. They will tell you the $300 home warranty will cover you. BS, first off all, dont ever go with the inspector your lender or realtard recommends, get your own, do your homework and never ever settle with this home warranty crap. google reviews).
Property taxes $413. Thanks to Prop13 you subsidize the old and rich. Cash outflow 3,335 a month and downpayment of 45k plus 1% closing costs.
oh, oh, wait, what about income tax savings from interest deduction? 24k standard deduction! Oh, oh wait, the principal you pay….you get that back, its your money! Nope, you’ll soon be underwater. If you buy, 3 entities are winning and one is losing. Lender, realtard, seller and then there is you.
If you really only pay 2,100 in rent + utilities I would sign a long-term lease asap.
You are welcome.
Lord B.said “There are problems with kids in wealthy areas, but I’d rather deal with these problems then send my kid to a ghetto school where you are surrounded by gang bangers, low lives, non english speakers, etc. The chances of somebody thriving in that environment is very low…â€
Lord B., but the MSM and all the liberals in CA tell us constantly how much better is to have multiculturalism and how much more we are enriched by diversity. And here you state the obvious without being PC. Who needs those flyover places in the country with no multiculturalism and diversity???!!!!…..
You are confusing diversity and socio economic status of a neighborhood
Affluent diverse areas are the best.
Irvine!
45% Asian
9% Latino
2% Black
and nearly all of the rest White.
The best areas I’ve lived in were not diverse. Once an area started diversifying (in my experience), crime and other unpleasantries inevitably rose.
Thats the best area YOU have lived. You just have not lived in the best areas overall.
(Which are diverse and affluent).
Surge~
The best areas are where the politicians pushing diversity live. And those areas are far from diverse.
Flyover,
There is much diversity in flyover as well. Iowa has been getting very diversified over the past 20 years. So what’s a dead girl or two killed by an illegal? Diversity is our strength after all. Take a drive through Central WA state some day, and you will find nothing but diversity. I had an idea for a game show. Have 4 non-Spanish speakers drive through Central WA for an hour, randomly stopping in fast food drive throughs. First one to get an order at least 50% correct, wins the grand prize. Could also work in parts of Nebraska, Idaho, Alabama, Georgia and Ohio.
Millie,
Unlike the others here, I agree with your assessment of Prop 13. Where I don’t agree with you is the fact that you direct your righteous anger towards eliminating Prop. 13 instead of changing it. You miss direct your anger.
I agree with Karin, that there should not be any tax if there is no income – I call that confiscation of property and it is a feature of bolshevism/communism/collectivism. Whoever supports that is evil and want to benefit from the theft, or is a plain idiot. There is no rational excuse for property taxes. Even Switzerland, a far more civilized country than US, with better roads and schools than S. Cal has capped the prop. taxes at $1,500/yr. That is maximum; it is scaled down based on value and income. It is true that they don’t have multiculturalism and they are not so enriched by diversity like those in S. Cal., but that was their choice. The voters in CA made it clear that they want multiculturalism and diversity by electing politicians who do just that – their choice.
Again, supporting politicians who want property taxes is giving up your rights to your politicians and their cronies/buddies.
The whole debate should not be around Prop. 13. The whole debate should be around property rights and no taxation for unrealized income. The whole debate is about the government right to confiscate/nationalize private property, because that is the definition of property tax. Instead of debating how fast the government should nationalize private property, we should debate where in the Constitution the government has the right to nationalize and tax property. Otherwise, the whole discourse is summed up in – should we nationalize in few months like the Bolsheviks, few years like Illinois and NJ, or a little bit slower like in CA.
If the debate would be focused on the right issue, there would be no need of Prop. 13.
If people would have more disposable income (no prop. taxes), they will be more spending and more sales taxes. Sales taxes and income taxes should be enough for any decent government to take care of schools and roads, like Switzerland proves very well for anyone visiting there. It is a matter of spending, not taxation.
“I agree with Karin, that there should not be any tax if there is no income – I call that confiscation of property and it is a feature of bolshevism/communism/collectivism.”
Wait, what?
So just because someone isn’t earning an income, they should be able to consume services which benefit their land asset without paying?
Politicians do it all the time. That is, consuming assets without paying for them. Why do you think they like to tax us so much?
Flyover, yours is the best post on the entire thread- you said what I have wanted to say, only more gracefully and thoroughly. I agree with every word.
Agreed.
https://www.zerohedge.com/news/2018-08-29/pending-home-sales-slump-7th-straight-month-overheated-real-estate-markets-start
And down, down, down we go!!!
When tha shi* goes down ya better be ready!
Wasn’t there somebody on this blog who called the peak during summer?
Wasn’t there somebody on this blog who said the market moves in 10 year cycles?
Anybody seen the news lately? Spot on?
Mhm….I wonder who that was…..so hard to remember……something with Mmmmmmiil
Millliii, MILLIE!
I live in Newport Beach and bought my house in 2011. My Dad lives in Redlands and bought his house in 1975. His effective property taxes as a percent of current home value are 0.19%. Mine are 0.95%. I look a block away at folks on the water who I know bought 20 years ago and their effective tax rates are on the order of 0.14-0.18%. Those that have been there 40+ years have effective tax rates less than 10 basis points.
The benefit is a function of time owning the house AND home appreciation. Making the benefit inheritable compounds the problem. Can the retired school teachers I know who live on the water in a house they bought almost 50 years ago afford to have their taxes brought to current? Of course not, and I would hate to see them leave, have the house bought by a developer, leveled, and sold to some centi-millionaire who is here maybe 6 weeks a year. BUT there kids should not get a windfall of a valuable property and a perpetual tax break that creates dynastic effects.
Maybe some revision to the growth rate that takes into account both a fixed cap and real market appreciation makes sense – those that are house rich should be able to borrow against that wealth to pay taxes and not be subsidized by newer, younger buyers and those that live in areas with lower appreciation rates, but we should not see forced sales because the elderly cannot afford their taxes, but their heirs should not get windfall and create residential real estate dynasties.
And…BOOM!! Amazon crosses $2000 a share. Those AMZN calls I bought last month during the last “crash” have made me more money than Millie’s entire net worth. This is how you get rich Mills. You move out of mommy’s basement, put on big boy pants, and live in the real world, not some doom and gloom ZeroHedge fueled apocalyptic fantasy.
This sudden AMZN surge will also do wonders for Seattle’s r/e market. AMZN was at $1750 in July it’s closing in on $2050. Every AMZN stock option is worth $300 more than it was a month ago. A typical employee with 2000 options is now $600K richer. And that ladies and gentlemen is how 27 year olds can afford $1M homes in Seattle without batting an eye. Also see Google, Facebook, Netflix, Salesforce employees in San Francisco/ San Jose real estate market.
Lol Mr landlord,
What makes you think you know my net worth? Care to tell us what the number is?
Second question, what makes you think I don’t own stocks? I buy stocks every paycheck. My 401k is mainly stocks (I think 95%). My employer matches my contribution to a 100% (up to a certain threshold).
Ah, I know what the issue is….i remember now! We shouldn’t work for a big successful corporation long term. In fact according to me landlord this is the worse thing one can do. Instead, we need to have a bezos-like thinking. Mr landlord also told us before that every tech employer in California gets stock options. After multiple times of asking for a reference he finally sends us an article about a start-up, who instead of paying a decent salary compensated his employers with stock options! That was his basis for thinking that every tech employee must get stock options! It all comes from the guy living in spokanistan, who leases his truck and bought amazon shortly before it hit 2k a share. Buddy, you are almost there! You are sooo close to being the next Bezos!
Millie,
If you’re happy making $70K a year and contributing 10% to your 401k, have at it. It’s not a bad way to live, I guess, just not something one should aspire to.
But I do wonder, given your prognosticating ability to call 75% housing crashes….why aren’t you putting every last dime of yours into shorting housing stocks? If your prediction comes true you’ll make millions.
I thought you know my net worth? And how do you come up with 70k in salary? I make well above 100k. Thought I mentioned that before. Maybe you don’t pay much attention?
But why ask you questions that you can’t/won’t answer 😉
To be honest I have never shorted a stock in my life. I suppose i could take a little bit of money and try it. I do give myself an allowance for risky investments. Gotta have some fun right? My crash forecast is somewhere in 2020 as mentioned before, btw.
I do buy stocks by dollar cost avg. if stocks go up great. If stocks go down even better! I buy in cheaper…..don’t forget I have like 30 years left until retirement!
I wonder the same thing. If Millie is that confident on a 70% RE decline, shorting REITs, SPY and QQQ should be a no brainer. In fact, why not do a 3x or 4x leveraged short. And happened to all the money being made in crypto, funny we haven’t heard a peep about crypto in months.
Like I said above, buy a house when you can afford it and plan on holding for the longterm. You better find a new strategy if market timing is Plan A.
Yes, I’ve been asking the same question about shorting housing stocks. Put your money where you mouth is if you are so sure. But he’d rather keep his crypto millions in the bank earning 2-3%.
Hi guys, happy to help with the confusion.
Let’s start with crypto. I apologize I haven’t kept you int the loop. It’s re-accumulation phase for me. Dollar cost avg. btc, eth, ltc, ada. The frenzy/hype is gone. Coins are cheap. Shutdowns are disappearing. I would say we are in the capitulation phase for the avg joe. This might be going for a while (years). You won’t hear much in the news unless you look for it. Once the hype starts again marketwatch, cnn, zerohedge etc will cover it. Just have patience!
Shorting reits etc.
I do get this question quite a bit. Happy to provide my thoughts. With the majority of my cash I am doing absolute nothing. It can stay in my bank accounts for a couple years. It’s FDIC insured up to 250k in each acct. It makes no money for me. one cd I have gives
Me almost 4 %. Minimum deposit is 100k. Again, peanuts. It’s just a holding spot. I will invest the cash in RE once we get a nice crash.
Crash! So why not short the market? Why Havent I done it? I don’t see a problem with that. Obviously, I wouldn’t do that with big dollars but a portion of my paycheck money? Sure! I save a ton of money each paycheck by renting a cheap apartment. I like to diversify. Stocks, crypto, mainly cash, a tiny bit of bonds. Why not short some stocks and add to the portfolio? It def. sounds interesting and fun. I don’t jump on things in general without doing proper research. I will look into it and keep you guys posted. If you have any concrete ideas/tips please share! I have never been shorting stocks so I am a newbie in that area. I am a long term bull with stocks, RE and especially crypto. I have never paid much attention to shorting. Since you guys have repeatedly mentioned it i promise I will pay more attention to it and do some homework! Thanks!
Lemme know if that helps or if you have any additional questions.
So the Great Millie who cornered the crypto market and made a killing is too risk averse to short housing stocks, even though he is 1000% confident the crash is coming in 2020? Interesting.
Mr. Landlord,
you are absolutely spot on. With about 95% of my cash balance I want to take zero risk. Just waiting for a nice crash and then invest in a dream house.
Who is paying 4% on 100k and for what term?
“Put your money where you mouth is if you are so sure.”
I’ll most def. put my money where my mouth it. As soon as it crashes i’ll pull the trigger. Gotta wait a bit longer though.
I’m a millennial and was paying about $4800 a year on property taxes on my first house in So cal. If it had gone up every year (no prop 13) then I would have gotten poorer and poorer faster! Inflation was already hurting my finances.
How can any millennial want to be poorer every year because of increasing property taxes? Do you not do budgeting or try to save money for the future? Seems very odd to me.
Glaba, nobody wants to pay higher taxes.
Your property taxes are too high to begin with! Meanwhile the guy next to you pays much less property taxes for a much larger house!
It’s an allocation problem not a question of asking for higher taxes! Everybody should pay their fair share. The government shouldn’t be allowed to pick winners and losers.
We can easily reduce your property taxes if we increase it for those that are currently getting a freebie! It will be net zero for the state and much fairer.
Beneficiaries of the current scam will scream poor grandma. They love socialism as long as they don’t pay for it and collect the same services. Do some research on prop13, check out the taxes some of your neighbors pay… you’ll be shocked!
In between non-stop coverage of Stormy Daniels and some guy who cheated on his taxes 20 years ago, the MSM managed to squeak this in….
“The number of Americans filing new applications for state unemployment benefits rose by less than expected last week, suggesting that the labor market is still very vigorous. Jobless claims are an indication of layoffs and have been closely watched this year for signs that trade disputes might weigh on the U.S. labor market. So far, there are no signs that tariffs have cost the U.S. economy any jobs. The four-week moving average of claims, which smooths out weekly volatility and is considered by many economists to be a more reliable gauge of conditions, fell by 1,500 to 212,250. That is the lowest level since December 1969, according to the Labor Department.”
LOWEST SINCE 1969!! Think about that for a second. That’s lower than during Reagan’s boom years, lower than Clinton’s boom years. The population is 50% higher today vs 1969 and yet unemployment claims are lower. That’s what a good dose of MAGA does to an economy.
We are in an unprecedented economic boom right now. And all you hear in the MSM is stripper talk and “fears of a recession”, LOL. And sadly many of the Doom & Gloom brigade here is buying into the #FakeNews.
SAD!
True! with such low unemployment (yes some people are only working gig jobs) and with no NINJA loans it is hard to see any ‘crash’ coming soon. I hear about black swan events such as geopolitics causing oil to go up to $150 a barrel OR a crash in the derivatives market but if that is the only thing doomsdayers can come up with… I think its a LONG way to a housing crash…
Crash?? Haven’t you heard… recessions and crashes are a thing from the past! It’s been cancelled! No more! RE can only go up. The bull run is just about to start! You better buy now! It’s a great time to buy!
Wolfstreet had an article recently about companies raising capital to go purchase large quantities of homes for rent….again. More than a few billion dollars combined according to the companies profiled in the article.
https://wolfstreet.com/2018/08/23/second-wave-buy-to-rent-single-family-homes-scheme/
Maybe this isn’t the peak as Millie is calling it? One has to think that these companies have analysts, insiders and other knowledge that us common folk will never have access to. Do they also agree we are about to continue on this growth pattern for many more years?
Wolfstreet had an article recently about companies raising capital to go purchase large quantities of homes for rent….again. More than a few billion dollars combined according to the companies profiled in the article.
https://wolfstreet.com/2018/08/23/second-wave-buy-to-rent-single-family-homes-scheme/
Maybe this isn’t the peak as Millie is calling it? One has to think that these companies have analysts, insiders and other knowledge that us common folk will never have access to. Do they also agree we are about to continue on this growth pattern for many more years?
speaking of rents. Rents in Chicago and Honolulu that have PLUNGED nearly 30% from peak (January 2015).
My rent in SoCal has never been increased btw. One has to ask why buy when you save a ton each month by renting? Big money can buy up places to rent all day, all year. Doesn’t change the fact that the market is turning….Have you heard anyone telling the inventory is low lie lately?
Processing a refinance for a bay area homeowner, works at Apple, makes decent money 200k, but, has an investment account with 900k value, Apple stock options.
I have to imagine there are tons of these types up there that cash out their stocks for these enormous down payments on 2 mil properties.
Yep! Tons! Tons after tons! Just like there are tons after tons of wealthy Chinese with buckets of cash running around in your neighborhood eager to buy your house in cash! In other words there is a never ending supply of multi-millionaires for California’s RE. That’s why there is no inventory! Oh wait! Houses are sitting longer, open houses everywhere and price REDuCTIONS?! Can’t be! Aaah it’s just because it’s August! After summer dummies! September will be epic! Buy now!!
Not just Apple, but Facebook, Google, Twitter, Salesforce, Netflix, Amazon….the list is endless. Despite what Millie will tell you, anyone who has worked for a publicly traded tech company for the past 2+ years is most likely a millionaire from stock options alone. And so when people ask “how can someone making $120K a year working at Google afford a $1.5M house”……that’s how.
The fact Millie – who claims to work in tech and live in the Bay Area – doesn’t understand this explains a lot about him.
I do travel quite a bit. I am often in the Bay Area for work or to visit relatives. I do not live there. A >100k salary here means I would ask for 250k in the Bay Area.
It’s too funny that we can play this game again…..
Mr landlord, doesn’t it appear weird to you that only YOU know that EVERY tech employee has stock options? How come you are the only one? Why is it a secret that only you know? How come there is not a single website referencing this?
Can you use your skills and send us ONE website link referencing every tech employee gets stock options? Just one? Think about it….there are several websites that suggest Bigfoot is real, that the earth is flat, that 9/11 was an inside job etc. how come there is not a single website saying ALL tech employees get stock options?
Are you going to send us the link again from the startup tech company that could not pay a decent salary to their EE and had options in their compensation package? I wouldn’t be surprised. I still get a good laugh out of that one. Maybe you can make me laugh again that hard but Let’s wait and see what comes back…..
I believe the stock market is driving the housing market.
The incredible Obama economy drove the Dow up 250% during his term. Trump drove it up also but only 30% during the last 2 years. The Dow has finally reached it’s February high again after lagging for 6 months.
I believe the housing market is tied to Obama’s incredible performance with the stock market but with a lag.
People are pulling cash out of stock market to buy houses. If the stock market flattens, the the housing market will flatten with a delay.
Given that, there is still so much money sloshing in Obama’s 250% gain stock market that people have money to buy million dollar houses.
Dow was 18.3K the day Trump was elected. It is now 26K less than 2 years later. That’s 41% in 22 months which is an annualized 25% give or take. And that is due to real economic growth, not the BS growth Obama had due to QE.
And no Obama didn’t have 250% gain. DJIA was at 9.2K the day Obama got elected. It was 18.3K the day Trump got elected. Which is about 9% annualized, which is right about the post WW2 yearly average.
Obama: 9% annualized with QE
Trump: 25% annualized without QE
You were saying…..
Mr Landlord,
You need to redo your math.
The Dow was at 8K when Obama took office and 20K when Trump took office.
The Dow is lower today than the Feb 2018 peak under Trump. It doesn’t look good for Trump. His false economy is losing steam. 6 months with no gain? What is wrong?
Read what I read again Bobby. It was at 8.3K on election day. That’s when a president’s impact begins. Trump’s impact began the day he was elected as well with anticipation of the incredible economy that he has brought us.
Ugh…
Meant to say it was at 9.3K when Obama was elected. Obama claiming credit for the run up between Nov 2016 and Jan 2017 is laughable. Under Barry’s watch stocks dupubled in 8 years, with the 0% interest rates and QE. And you sycophants think that’s something to applaud? LOL.
SAD!
The Presidency starts when the President takes office.
The Dow nearly tripled under Obama and went up 30% under Trump .
You could argue that the Presidency starts when the new President’s first budget is implemented. In that case, since the Dow in Feb 2018 was higher than it is today, Trump has been horrible for the market and the market has dropped under Trump.
Your framing of the issue is dishonest. There are no Millennials saying they want to pay more. They are saying that they are tired of paying more to subsidize those who are paying less.
Your understanding of reality is wrong if you think somehow repealing Prop 13 won’t result in EVERYONE paying higher taxes.
I never claimed it wouldn’t.
avi1985, you just don’t get. Almost everyone who purchased a home in the last 10 years would have gained with Prop 13–and that includes Millennials! Homes in many CA areas have doubled in price in the last 10 years. Those recent buyers would have seen their property taxes increase rapidly or even double in the last decade if Prop 13 had been repealed. All that is needed is to eliminate the inheritance part of Prop 13, which I didn’t even know existed until it was mentioned on this site.,
You don’t get it. Relatively higher taxes would have governed those price increases.
avi~
Most people I know that have bought from 2005 on are paying over $10K/year in property taxes. And what’s happened to house prices? They’re higher than ever.
Avi and Karen,
Property taxes should have somewhat governed the increase in housing but they didn’t. Property taxes are 1% in CA. Interest is 4-5%. Taxes are still less than 20% of the cost of owning a house.
Why have housing prices still increased?
1) The stock market went up 300% under Obama and 30% for the first year under Trump. We have recently seen the housing market flatten. Coincidence that the stock market has also flattened under the first Trump budget? I think not.
2) Foreign investors with all-cash are still driving up the market.,
3) Poor Millennials with Boomer parents are helping them with the down payments and maybe even the payments. Boomers with multi-millions realize they can’t take it with them when they go. Tax laws are very lenient with giving your kids boatloads of cash tax-free when you are alive. Trump has raised the inheritance tax limit. Of course many Boomers cashed in under the 300% gains under Obama but now are seeing the market flatten. Will the dynasties continue? Even when a Millennial parent passes into the Great CA Sunset, the kids inherit up to 12M tax free and their parents house maintains the same tax payment due to Prop 13,
Watch the stock market and China for future gains or losses in the housing market.
Kinda fun going back a couple of month and looking through the conversations:
John’s Temecula shilling….According to the conversation: Seen it all before Bob, Mr. Landlord and John’s wife have high interest in this place:
https://www.zillow.com/homedetails/41725-Avenida-Ortega-Temecula-CA-92592/69278163_zpid/
“Mr, Landlord
July 12, 2018 at 9:28 am
That is an awesome house. If your wife doesn’t buy it, I just might. Although for that price, I would expect a swimming poo. Offer $75K less for a pool allowance 🙂”
Its still for sale guys? Has only been 225 days. Price was reduced from 1,6MIO in 2011 to 1,3Mio in 2018. Mr. Landlord just got rich this week because he bought Amazon calls. There is so much interest in this place but nobody is making an offer? Mr. Landlord, thats you way out of Spokanistan….I just thought I sent you a friendly reminder that the house is still for sale. It wont last! You better make a move soon!
Karin’s link to the house in Santa Rosa shows it is still for sale as well. Only been 82 days though and no price reductions yet. I agree the floor plan is nice.
https://www.zillow.com/homedetails/260-Darbster-Pl-Santa-Rosa-CA-95403/15803379_zpid/
Interesting times ahead!
Millie sez:
“Mr. Landlord just got rich this week because he bought Amazon calls. ”
Factually incorrect. I have been rich for a long time. I got rich-ER this week having sold Amazon calls that I bought in July.
Speaking of rich, I watched a series of Trump clips last week, and he has one great sense of humor. On one of the clips, he asked, “What’s the difference between a wet raccoon and my hair?”
“I have 7 billion dollars!”
Well, you had to have seen it. It was pretty funny. I like Donald.
@Karin
Your Trump joke was written by a comedy writer for his Roast. All Trump did was
memorize his line.
Jed~
Yeah, but at least he knows how to make fun of himself. And of Hillary. Did you see him roast her to her face after the debates? That was the most fun I’d had in weeks. Considering the trail of bodies the Clintons have left in their wake since (and including) Arkansas, Trump had balls of steel to do that.
We almost bought the house next door, at 250 Darbster. That whole community burned to the ground a year later. We passed on it only because the yard was too small. Dodged a bullet on that one.
I’ve traveled a lot, like many people on this forum. It is easy to bash CA, because well, it sucks now. All of the crime, traffic, crappy schools that encourage tranny conversions, gangbangers, hobos and the systemic invasion from our southern neighbors has destroyed a once great state.
The question is, what city is left in the US that isn’t overrun with bums, has at least decent weather, and is family friendly with affordable real estate and sans rampant crime and blight?
The answer is that it does not exist. I think there are a few places that are close in some categories, but for the most part, it does not exist.
Let’s be honest here, we know this is true, if I am wrong then please offer up this mysterious coveted locale that I have never been to. Ok here I will start..
California is Clown Town with great weather. A Mental Ward on the beach.
Coeur D’alene 20 years ago was pretty close. Now it is spendy, pretty busy, and the not-so-great weather is a factor.
Des Moines Iowa is getting some attention. It is clean and nice people and affordable, but Des Moines weather is brutal.
Austin, TX is San Francisco Light, weirdo town.
Nashville, TN is the Vegas of TN and overcrowded now. Nashville 50 years ago was probably great.
I could go on. We all know that there isn’t a fantastic place these days to avoid the Great American Meltdown. We are the once great country that is now the crumbling brick of civilization. A Sewer Pipe exporting porno and Hollywood filth and we have been overrun by the 3rd world in many ways with a citizenry that would rather get high on medicinal and catch Section 8 rent than be great.
Hit me if I’m wrong. I can take it. Nobody, not even the Great Wise Mensa Millennial can suggest one area in the US that is actually desirable anymore.
It is easy to bash CA, and for very good reason, but there is no Shangri-La.
Your view of the weather assumes hot is always good. For some it is, for some it isn’t. It’s nice to have 4 seasons. And as an avid skier, living in a “bad weather” place like Coeur D’Alene is a plus. 5 ski resorts within a 90 min drive. I’ll take that over LA’s winters.
YMMV of course
Fair point, but I agree. We live in the mountains/snow country in Nor Cal.
Not all cold weather is created equally though.
My hangup with your CDA/Spoke weather is more your super long grey extended periods and really short winter days. It isn’t the snow or even the cold.
As I said, no place is perfect but I think in the US the choices have become as bad as ever. I really don’t think there are any ‘standout’ places in the US anymore. We can all agree (the logical amongst us) that of course it is not California, obviously.
Ashland, OR isn’t too bad I agree, but a bit hippie hippie for me. No offense, to each their own, but not our speed at all.
Short winter days suck. No argument from me there. Mid December is the worst when the sun goes down before 4pm and doesn’t rise until after 7am. But the long summer days make up for it. I love June/July when it doesn’t get fully dark until past 10pm and it’s in the 70s, with low humidity at night. Doesn’t get any better than that IMO.
You’re right no place is perfect. Utah does have some really good winter weather, lots of sunny days and the best snow in the world (and yes I’ve skied all over the world and pick Utah as #1).
Fella, you make some good points. As bad as California is, where is there a better place to live? Personally, the best places I can think of are parts of Oregon. For example, I once lived in Ashland, OR, and it still seems like a fairly good to live. Last year when I visited, I was almost run over by a deer as he jogging calmly down the street.
Many years ago, I planted a palm tree near my Ashland home–and as far as I know, it is still alive today. I put some sand under the tree and pretended I was on a California beach.
Only trolls have claimed there was a perfect place to live. Pussies can’t handle dynamic climates. Real men can take the heat and cold, therefore they may choose to live in places without the problems you describe. If California was so perfect the majority of this world wouldn’t be living elsewhere. Certain parts of California have marginally better weather appeal although easily overcome by ills which come with the overcrowding it has brought. Smog, fires, mudslides, earthquakes, drought, May gray, June gloom, Fogust, flash floods, valley heat, winter chains on mountain roads, and so on aren’t attractive climate attributes. The big lie is to perpetuate a myth that it’s always sunny and 72 everywhere in SoCal. If the myth was true then we’d have no California cheerleaders on this site because the amazing weather would be fully capturing everyone’s attention.
If you happen to be a Mormon, there may be a few good places in Utah.
PS Not a Mormon!
Fun fact, Mormons do not want to be called Mormons anymore
https://www.lds.org/church/news/president-nelson-in-montreal-were-correcting-not-changing-the-churchs-name?lang=eng
True. I’m not Mormon either but they have some great communities schools families and values. Can’t say that for most groups in the US despite what a whipping post Mormons are for all the city slickers.
Utah ain’t too tree’d though. Lots of high desert and water issues. I don’t claim to be a Utah expert by any stretch though so maybe someone with more time there than me knows exceptions to this.
Either way, my point kinda stands, this whole board nobody can really point to a really great high quality alternatives to broken CA.
Utah is a beautiful state. You’ll find some of America’s best National parks there. For instance Bryce Canyon offers a surreal collection of rock spires, arches and castle like formations. I took some absolute stunning pictures with my canon SLR. Catch the sunrise at Bryce, you wont forget this colorful, colossal view. Zion and the Arches are a must-see as well. I’ve been to Zion twice. Very scenic park and lots of wildlife but the spectacular hikes are what makes this park a unique experience. Angels Landing (if you fear heights that’s not for you) and the Narrows (you hike upstream in the virgin river, most wear special water-hiking boots. next to you are thousand feet tall rock walls). Speaking of National parks, Yellowstone is not that far away (Wy).
Real Estate is overpriced in the cities (I am thinking of Salt Lake and Park City) but there are beautiful areas/smaller cities where you can get a spacious, brand new home for 250-300k. A joke for Californians but overpriced for the locals. Some areas experience issues with the inversion layer. The smog/pollution gets trapped close to the ground. They have an index and depending on the rating it may not be recommended to go outside on certain days. You like to ski? Utah is for you. Winters can get brutal though. Be prepared to shovel snow – several times a day.
Another Utah perk is the speed limit of 80mph on some freeways and that they somewhat solved their homeless problem.
I’m not bragging about where I live because:
1) It’s not nice to brag.
2) It has its flaws just like coastal CA.
3) Selfishly, too many people might move here if I brag.
The ultimate trump card.
To claim you know the answer, all while withholding the answer.
I bet it is somewhere in Tornado Alley? We wouldn’t want to live there anyway.
Very True, Nor Cal.
I claim to know the answer for myself.
I believe everyone has their own answer and should find it.
NorCal, you analyze all places based on your definition of nice. However, people are different and have different preferences. People are introverts or extroverts, have different skills, are more or less entrepreneurs, care more or less about proximity to relatives, in other words you can not fit all people in a box called SoCal or CA in order to make them happy. You are not the measure of what place is nice or not lor what climate is good or bad. Some think Palm Springs has the best weather, some FLorida and some Maine – to each his own. Some don’t need a job – they have their own business. Some like big cities and some small. For me, I like maximum 300k, but after all pluses and minuses, I ended up in a 50k city which is the minimum for me. My brothers think I’m crazy for not liking big cities, and that is fine with me; I’m happy where I am.
I agree that ‘nice’ locations are subjective. I didn’t say otherwise. Of course people have different preferences.
I was specifically referring to areas that are family friendly, safe, and don’t have really crappy weather. In the opinion of most people good weather likely means not being miserable most of the year with long oppressive winters or overly humid summers covered in insects.
It is a sliding scale but very few things other than reptiles like extreme heat and of course penguins like the snow, but when it is grey with inversion and biting cold for many months without cease, that affects most humans almost universally.
But ya I agree with you, I wasn’t saying I was the gold standard of what a good or bad city is, which is why the question was posed. To each their own. But the general decline of US cities IMO has made choices much more difficult.
Real Homes of Genius – or- just another house in the hood.
Check out the price history (5 times as much as 2009)
https://www.trulia.com/p/ca/los-angeles/2631-s-burnside-ave-los-angeles-ca-90016–1024611155
Ugly shithole neighborhood surrounded by traffic hell and only four photos—all simply a different version of the same front shot. Current tenants are probably a PITA which is why no interior photos. Looks like a dream come true.
OC Register today had an article by Jonathan Landsner titled “Supply of unsold new homes at 6 year high”. This article said that the supply of new houses for sale in LA, Orange, Riverside & SB Counties in 2018 Q2 is up 19% over the previous year, and is the highest inventory since 2012 2Q. In OC, over 15% of houses for sale were new, compared with less than 7% two years ago.The article says that building homes in the higher price range is a big part of this bloated inventory. Although the pace of housing construction has risen, it is still more than 50% below the rate in 2004-2007. So the author is expecting incentives (meaning financing and pice breaks I suppose).
This Fall election we will see Ballot Prop. 5:
Revises process for homebuyers who are age 55 or older or severely disabled to transfer their tax assessments.
“The first initiative, the Tax Transfer Initiative, would broaden Prop 13 tax benefits, benefiting older homeowners more than under the current law and potentially loosening up home turnover, too.
Under the current law, a homeowner who is 55 years or older may replace their principal residence within two years of their sale without triggering reassessment. The new property needs to be of equal or lesser value and located in the same county as their previous residence, or in an accommodating county, including:
Alameda;
El Dorado;
Los Angeles;
Orange;
Santa Clara;
San Diego;
San Mateo; and
Ventura Counties. [Rev & T C §69.5];
The Prop 13 Tax Transfer Initiative seeks to do away with these requirements, allowing a homeowner who is 55 or older to skip reassessment regardless of:
the new home’s county;
when they purchase their new home; and
their new home’s FMV.
This would translate to a loss of around $150 million in property taxes in the near term, and grow to over $1 billion in lost tax revenue annually as the population continues to age and home values continue to rise. The majority of this lost revenue will represent a loss for school funding, according to Ballotpedia.”
The person in my post of August 19, 2018 at 7:51 pm knows about this measure, and is counting on it passing so they can get a place further from LA, which will be bigger than what they can afford in LAC or OC.
This Prop 5 will be a big test of the power of Senior voters vs Millennials who are angry about Prop. 13. I think it will be close and could fail, but the people I know don’t want to hear that. Voter sentiment is a funny thing, and highly committed YES voters could counter less committed NO voters
Here’s the text of Ballot Prop. 5:
https://ballotpedia.org/California_Proposition_5,_Property_Tax_Transfer_Initiative_(2018)
Prop 13 style giveaways are going up against more than simply an overburdened Millennial vs entrenched Senior power test. Trump Derangement Disorder is in full effect probably nowhere more than in California. Angry libs are out for blood—which includes anything perceived as being advantageous toward established wealth assets. California remains on a declining path toward full retard imbalance and we have no way of knowing exactly how it will turn out nor when it will inflect back upwards. While the willingly blind keep perpetuating myths that only the poors are leaving—the truth is net negative domestic migration out of the state increasingly includes priced out liberal technocrats, fed up center-right middle class, and forward thinking true wealth owners. Only the desperate immobile middle class are going to try to convince theirselves (and us on this blog) that a comparably good quality of life includes being left behind stuck in the thin middle meat of a shit sandwich with the relative few extremely wealthy on one side and hoardes of unadjusted foreigners (domestic and international) on the other.
“California remains on a declining path toward full retard imbalance”
You sir have the poetic chops of a Byron and Yates rolled into one. Well played sir, well played.
Avi gets it. Many of my renters are and were ex-Pat Californians. And yes I call them ex-Pats since California is no longer American. These are middle to upper middle class families that had enough of the insanity. The formula is typically sell the house for $1M, pay off the $300K mortgage, move to CDA, rent for a year while getting to know the area (KA-CHING for yours truly), buy a nice home house for $350K. Never worry about money again.
This works especially well for professionals that can work anywhere like medical professionals, accountants. software peeps, teachers, etc. A nurse in CDA will make less than in LA, but adjusting for cost of living and taxes, she’s much better off. And lots of tech companies are opening up to the idea of remote work. I know several recent ex-pats in teh area who work for Bay Area companies remotely.
I read this sob stories about a teacher or nurse barely making ends meet in CA and wonder why the hell don’t you move? I can see staying in LA if you’re in the film industry or whatever. But a nurse can be a nurse virtually anywhere in the country. Why choose to live in the most insane cost of living area? It’s the same as homeless people, in reverse. Any time I see a homeless guy around here I wonder, why are you here? Start walking south until you hit good weather. Being homeless in a place with 4-5 months of winter is as idiotic as being a nurse or teacher in LA.
If Prop 5 is such a good idea, then why do they limit it just to those 55+. Why not 40+, why not <40 only? Why? Because it is a blatant money grab by boomers.
It would benefit me greatly to take my Prop13 taxes with me as well.
Look at this calculation:
Example: An individual sold her house for $500,000. The house had a tax-assessed value of $75,000. She bought a new house for $800,000. The tax-assessed value of the new house would be ($75,000) + [($800,000)-($500,000)] = $375,000.
Meanwhile everyone else will pay taxes on the full $800,000.
Yep, its theft. A painfully obvious scam by the boomer generation.
LOL. You do realize that one day you too will be 55+ right? That’s what so funny about these milenial vs boomer flame wars. The Millies think they will stay 28 yo forever.
Hint: you won’t
Good Point JD,
Why not open it up to everyone?
However, only Boomers and people who purchased in 2009-2011 will have the basis to make it work.
U.S. household wealth is now over $100 Trillion. In 2009 it was $55 Trillion. That comes to roughly, an increase of wealth per U.S. family of $350k in just 9 years. For some reason I did not see that much. 🙁
where are our friends who screamed QE Infinity and rates will never go up again?!
https://wolfstreet.com/2018/09/05/all-treasury-yields-1-month-1-year-2-year-up-to-3-years-hit-10-year-highs/
The most important chart in the article you linked to is the 2yr/10yr spread which is dropping steadily. You get almost as much for 2 yr as 10 yr now. As of Friday, the 2 yr was 2.71 and the 10 yr was 2.94! That’s 0.23 difference for eight years. Creeping towards inversion? I’ll get interested when 10 yr gets to 3.5 an excited when it gets to 4. BTW, the 30 yr is 3.11….0.17 higher for 20 extra years.
We’ll be in 2019 in a few short months and 30 year mortgages rates are right around 4.5%. That is still dirt cheap money. The people who bagged 2.x or 3.x rates a few years ago made out like bandits. I imagine that is another factor in keeping inventory low, why would anybody sell if you are locked into a monthly nut that is way below rental parity.
We’ve heard the same old sad story this entire decade, the market is finally starting to turn. The big crash is right around the corner and I’ll buy desirable CA RE for dimes on the dollar. I could only wish…
Millenials think history started when Obama was elected. So yes there was a period of time in the 2010s when mortgages were ridiculously low. I got a mortgage under 3% myself. Now that mortgages are back in the 4s, millenials think that’s some kind of record high or something.
4.5% by historical standards is practically free. A 10%+ mortgage was common for much of the 80s and 90s. In the mid 00s during the last boom, the average fixed 30 year rate was around 6%. Yes my Millenial friends, 6%!! Can you believe it? While you were in college, learning to be triggered about everything and anything in the world, people were paying 6% for a mortgage.
Right now the average is somewhere around 4.5%. To put that in perspective, here are the annual average rates for 30 year fixed going back to 2010. Rates today are alllllll the way back to those strata-strophic rates of 2010, 2011 and 2014. It’s nothing but doom and gloom ahead I tell ya!!
2010: 4.69
2011: 4.45
2012: 3.66
2013: 3.98
2014: 4.17
2015: 3.85
2016: 3.65
2017: 3.99
Blank fein, you are stuck in a mindset from decades ago. You compare today’s rates with 7-10% rates back in the days. You don’t understand the simple fact that low interest rates inflate asset prices and high interest rates deflate the prices.
You will never get that it is much better financially to buy a cheaper house at higher interest rate instead of buying a highly inflated house with a very low interest rate. You don’t get the concept that your property taxes are locked in to the lower base while you have the opportunity to refinance later when rates are more favorable. You can never change the price you paid and the subsequent taxes tied to it. Rates however change over the course of decades constantly. You are also in denial about the current state of the cycle. You still tell yourself that the bubble is going on for years to come while in fact we are past infliction point. Nobody is making out like bandits by buying an highly overpriced home at 2% interest rates. You only win if you buy very low and refinance later to 2%. Something tells me you know all of this and just try to fool the avg joe. Or, you are in fact that silly and still don’t get these facts. After many years being on this blog there should have been a learning curve though that has an upward trend.
Millie, you are wrong again. It is sometimes better to buy at lower interest rate and higher price than vice versa, especially if you are going to hold on the home for the duration of loan. This can be easily proven by plugging comparing 2 interest rates…but I forgot you are not good at math
Surge, no other than you would post such a BS.
The guy who said price doesn’t matter. The guy who said he bought in 2005 and 2017. Nobody timed the peak better!
The guy who stated that rental parity is paying 200k down and STILL pay 1500 more a month than a renter. You have been an absolute rockstar in providing material for me. Please keep it coming! Don’t stop! Most RE cheerleaders have already jumped off the ship since the bubble is popping. I have a feeling you are in for the long run. You are my star! Don’t disappoint me!
I think Prop 13 is great and the new Prop 5 initiative is great for older homeowners. Trust me that if you own a house that Prop 13 is the best thing ever and many other states constantly re-assess property and have much higher tax rates than CA which prices people out of their homes. The big issue is that Prop 13 should be repealed for corporate and commercial land and only reserved for residential property. This would generate tons of money for the state and protect home owners. Even though I rip on Boomers and how they were able to buy California real estate at affordable prices and couldn’t ever afford to own their own homes at today’s silly prices I still wouldn’t want to see Prop 13 go away ever.
The biggest issue for the middle/working class in CA is the ridiculous prices of homes and lack of new construction to create more housing. California helps people from being priced out once they own property with Prop 13 but they price out the younger generations from ever owning with $900k crap shacks.
Many other states also have much lower property prices because the taxes make up the monthly carrying cost difference–cherry picked exceptions like the northeast tri-state area excluded since additional factors are also at play there. No freeloading like in California because everyone pays proportionally for the value their property receives from the tax paid.
In other words, Prop 13 is one of the big reasons prices don’t correct to a level Millennials such as yourself find more affordable. Liars and non-critical thinkers around here will dispute that. Who could blame them, most people love the idea of free shit so much that they are unable to see the real cost.
You’ll get your shot at that in the 2020 election where there will b a ballot measure to repeal the commercial Prop 13 break. One more nail in the coffin of brick and mortar retail in urban/suburban CA if it passes.
That’s true. Business models that rely on continued government subsidies are not long-term sustainable without eventually being forced to make disruptive readjustments. The same goes for real estate assets.
PricedOut,
I agree there should be property tax protection for all. Prop13 and Prop5 is not it.
What your missing is that Prop 13 incentivize people to stay in there home longer than they should. Boomers should want to downsize and relocate to lower cost area away from job centers and closer to the services they need in later life. Instead you have boomer couples living in 5 bedroom houses they cant afford or able to maintain, they neighborhood schools are being closed because of lack of kids meanwhile the next generation is raising their families in condos and apartments farther from th job centers.
Prop5 is not the answer. If a house goes on the market and a boomer couple and a first time home buyer couple both have $4k per month in housing budget to spend. Because the boomers have Prop5 the will be able to offer more, because less of their monthly budget will be taken by taxes.
So once again the boomers are change the rules in their favor. Don’t believe any of that CAR BS about making housing more available. This will simple let boomers trade properties among themselves and gives the realtors a bit more sales volumes and commissions.
I agree with what you’re saying but they were there first and I feel deserve to stay but we need more new housing to lower prices and give younger people and families places to live in the areas of CA with jobs. The limited housing and high demand especially in the Bay Area and LA push prices up where only wealthy people can buy regardless of age.
I was thinking about Prop 5 and it seems that it is the “passive aggresive†option to your solution. It gives Boomers a way to get out of their houses and downsize without moving to the middle of the Nevada desert or to wherever if they do want to stay around their local area/home town for their grand kids, friends, family,etc. . They can sell their Golden crap shack or split level home they bought for a lower value 20-40 years ago and buy a smaller house at the current insane values in an area a little further out or something much smaller in the same area while getting a tax break that makes that move feasible. This will free some housing stock up for younger people and families. The big issue for Boomers moving especially the ones that aren’t as well off is that they can let afford the property taxes on a new property even if they have a lot of equity, the monthly payment just isn’t sustainable or possible and they are currently dialed in at a low Prop 13 tax rate with a low mortgage. Prop 5 is the best California can try to do to make it possible for Boomers to move and maneuver into smaller housing in the current market without kicking them out on the streets by eliminating Prop 13. Obviously they aren’t ever going to move if they bought at $150k and their house is now $1.2 million and they can’t downsize for less than $600k or whatever because downsizing or even moving out to the boonies is going to cost them 10X what they paid to buy in a prime location originally. The only Boomers or elderly that move are the ones “cashing outâ€, selling the crap shack for $950k and moving to Bend,OR, Arizona, Fresno, Flyover, wherever as they are now rich and can buy a house elsewhere cash and have a ton of money in the bank. The ones that want to stay in the prime areas are never going to budge and their kids know they will eventually inherite the house with low Prop 13 taxes in a prime location that they could otherwise never afford unless they made $400k a year.
PricedOut — they/I/we were here first isn’t a plan. Everything changes, that’s life. The sooner one accepts this, the better one’s life can be. People die and people are born. Older people will have to make choices, not all will be able to stay on account of when they arrived. No one gets a pass solely on account of their birthdate.
Good article:
https://www.dollarcollapse.com/mortgage-lenders-repeating-2006-mistakes/
Another case were Bolsheviks in US pick up winners and losers, nationalizing private property for the benefit of crooks in power and their cronies:
http://www.wirepoints.com/botched-chicago-county-property-tax-relief-backfires-on-working-class-minorities/
Prop 13 freeloaders should take note. This is what happens when the state can no longer rob Peter to pay Paul. You won’t be spared.
anyone who mentions “bolshevik’s” in modern day US in my opinion needs to get their head checked
You’re right. They’re just plain communists now.
Everyone who doesn’t learn from history is bound to repeat it. That is the definition of insanity – doing the same thing expecting different results. For that they should have their head checked.
I lived under bolsheviks for decades and I have an MBA in the states. I speak not only from theory but from experience – which you totally lack. You get triggered every time someone is exposing this ideology from the pit of hell because people like Emanuel Rham are your idols.
Yes, those in IL and NJ are bolsheviks enjoying wealth/property confiscation (super fast) to pay their cronies/buddies who paid for their political campaigns. Regardless of the label, that is what property tax is – property confiscation (it has zero to do with income).
So he should’ve called them Mensheviks? Flyover grew up in a Bolshevik controlled country. It’s pretty real to him. Those two terms are the names of the Marxist and Fabian wings of the Russian Socialist Party before the Revolution. I think we all know what they mean, and are still relevant as long as those two political groups are active.
Joe R, I suspect you yourself do not know what it means.
Literally, Bolshevik means a member of the majority and Menshevik means a member of the minority in Russian. It referred to the left wing political party in Russia under Nicholas II, where the majority at a conference were Marxists and the minority were less radical Socialists. So Bolshevik means one who follows Marxist-Leninist politics. Eastern Europe was under Bolshevik rule from the end of WWI to the fall of the Wall. You may not like using a Russian term but it has become a bit if a pejorative word for a Marxist worlwide.
100s in the valley today and high humidity at the beaches. Meanwhile the weather is actually nice in other parts of the country and world. So much for the always perfect weather lie.
Weather aside, let’s talk about the real story. Have you looked at what’s going on in California’s housing market? Are you tracking any local markets here? The news have not reported it yet but the boots in the ground are seeing/experiencing it daily. It’s phase two in the cycle. Houses are sitting and expiring. Second wave of reductions. Open house after open house. In this phase you don’t have too many sellers that have to sell. Some Sellers are still delusional, some start to panic because they were banking on cashing out at the top and can’t find a buyer. This is also the phase where you start having appraisal issues and buyers bailing. Buyers no longer have the fear of missing out. They now fear catching the falling knife. The buyers sentiment is what driving this turn. You will probably see riskier loans/interest only loans again. What’s different this time is that these strategic default people have done it before and will probably start doing their strategic defaults earlier in the cycle. This should be so fun to watch. The infliction point has been reached. It’s “getting your popcorn out and watching the party end†from here on.
I’ll take coastal socal weather over anything else out there. If you have any better suggestions, please let us know. Thanks in advance.
I live in Santa Monica, right near the beach on Ocean Blvd. Too sunny and hot, though this morning’s thick fog was nice.
I prefer constant gray skies, lots of rain and snow, and temps always in the 20s to 50s.
Seattle has nicer weather. But a bit too sunny and hot for my tastes.
Unfortunately, I’ve not found my perfect place, with my ideal weather, plus other requirements (e.g., urban amenities, affluent neighborhood, safe streets, etc.)
Well isn’t that special? Most people aren’t you.
Sorry. The beach weather is absolutely perfect today. Perfect. Plus, summer is over so Newport Beach locals have it all to themselves. Did I forget to mention all the home equity millionaires around here? Some of them are being real stupid and using that equity to buy six figure cars. DUMB.
Regarding “perfect” beach weather, see my response to Lord B.
Buying $100K cars, whether bubble or not is dumb.
Pro tip: Buy that $100K car for $50K when it’s 3-4 years old.Then drive it for 2 years and sell it for $40K. The depreciation curve on high end cars is very steep the first 3 years, then flattens out considerably.
Today wasn’t yesterday and today won’t be tomorrow. The truth is the weather isn’t always like today but that won’t stop you from perpetuating the always perfect mythology.
jt, same thing in Torrey Pines state beach
The weather is picture perfect at the beach. Humid? South Florida gets humid. Temp is mid 70s warming up to low 80s on the weekend. Ocean temp is almost 70 (which is warm for here). Tourists are gone. This is my favorite time of year.
You’re right, there are a handful of days during the year where it’s completely ideal considering all conditions. Usually it’s overcrowded, cold in the winter, garbage in the sand, periods of water pollution, overcast, dog shit piles, rotting seaweed, and the list goes on. Depends on the beach in question but some are full of ghetto dwellers and white trashers during the times working people have available to visit. Awful parking, traffic and RV hovels for the LA city and Santa Monica beaches. Very run down and frumpy looking property in some of those areas. Some of the OC beaches are better more or less so. Long Beach is meh with ugly industrial ships and stagnant polluted water. Even manhattan beach has that nasty refinery and waste treatment facility on the north end.
Well, Surge said above the last people whose opinion you’d want to rely on are those living in the area due to their inherent biases. You can cover a beach turd all day long with sand but it’s still shitty underneath.
Nice spin lordtB, but my saying still holds. Just because a local says something about locality, it does not mean it is the truth (or truth for you). I immigrated from Soviet Union and I know that my felllow immigrants are mostly have extreme biases.
Just because someone in Oregon (on this blog) tells me it is nice, I believe him but it is not for me.
Orange County is in heavy correction mode. Sellers are waking up to reality. Two houses are now competing with one buyer. Party is over. OC is a good indicator for areas in the east and south what’s to come. The fun is about to start!! What’s your guys favorite champagne? I am getting myself the best one. Well deserved for doing everything right.
Milli: Orange County is in heavy correction mode. Sellers are waking up to reality. Two houses are now competing with one buyer.
Which two houses are those? Who’s the buyer?
Oh, that’s right. It’s another one of your anecdotes that isn’t even an anecdote. It’s a fantasy.
Clicquat.
Clicquot. Doesn’t break the bank and just as good as higher end stuff IMHO.
Where is this massive correction taking place? I just looked on Zillow in my zip and there’s only a handful of SFRs under a million. The largest price cut I saw was $100K off a 1.8m home. I see a few 2-3% price reductions on less expensive properties.
I don’t plan on selling so I don’t really care. I’m happy that my mortgage balance looks more like a nice car note. My prop taxes are still far below market even if your 50% correction takes place. Oh and BTW, I’m not a boomer either. I just bought when I was young during a “bubbleâ€.
I also see some price drops in my South Orange Co. zip code, but most are in the 2-3% range. However, that is normal during the transition from the summer to the fall selling season. There is less demand and eventually that lower demand translates into lower selling inventory.
Nothing unusual is happening.
Please do not take the “evidence” of impeding crash from them…let them have their proofs 🙂
Denial and ego are symptomatic of phase 2 (higher inventory, price reductions, longer days on market and expiration’s of listings). But even in the midst of phase 3 (20%+ reductions) some people will deny the bust. The writing on the wall becomes a screaming speakerphone some will still tell you everything is awesome. But can you imagine how monotone the blog would be if all RE cheerleaders disappear during the bust?
@Surge,
Since you are so naive and don’t understand how the bolsheviks came to power, I can tell you what I heard from my parents.
First, they took the gun away. When you see a government who wants to take the guns, be very afraid – it is not for your good and they don’t have anything good in mind for the citizens. Without guns, they become subjects.
Second, they removed the equivalent of 1st amendment. When they start censorship, they have something sinister in mind. At that point they admit that what they say does not hold any water and they can no longer compete in the free market of exchange of ideas based on logic and critical thinking – something that our liberal universities are doing lately; also the FAG (Facebook, Apple and Google). They claim that they are private companies and they can have any rules they want, but they don’t want to allow the same freedom to small businesses who claim the same right. Then, they are forced to serve everyone, regardless if they are private businesses.
Third, the bolsheviks raised the property taxes so much, that nobody could pay them. In few years everyone donated the properties to the government because they could not pay for the stealing of private property. This is what IL, NJ are practicing right now. Soon, CA will be bankrupt under the sky high promised pensions and will be FORCED to do the same. It is just a mater of time. Don’t believe me? Ask anyone from IL or NJ (I have friends there). There is a blogger even here who is from IL and can confirm what I am saying.
All of these happen right here in US to different degrees from one state to another and they are always pushed by bolsheviks. That is the best word to describe them and their agenda. Too bad you became an apologist for a gang of thieves and parasites.
The only thing left to happen on a large scale is arrests during the night. The way things are going it is not going to take too long. One more “democrat” administration will complete the process. Obama already started to use the IRS as his goons against “enemies of the people”.
You’re full of bulshevik.
Hey, I’m going to move to a secret garden of Eden in bfe WA then troll on an out-of-state housing blog trying to convince people to agree with my politics.
Does anyone have a link to Phoenix housing blog? I don’t live there or plan to buy property there. I just want to tell people how I don’t have to run the air conditioner ever since I live a block from the ocean. They’re all idiots for living in the desert.
SoCalGuy, triggered much when you see your bolshevik idols exposed!!!….Or are you triggered when someone pricks the little bubble you live in?!!!…
I am not interested to see you or others like you become my neighbors. There are enough of those here; good thing they are in minority and can’t change the local politics. The liberals are like locusts – they destroy the finances of very wealthy cities (like Detroit or Chicago) and then they jump ship for the next city to destroy and rob the whole wealth. They don’t produce anything; they just steal.
Lol
Flyover, you are one of those types of Russians\Ukranians who think that somehow adopting stern conservative viewpoint (both fiscal and moral) will somehow put you closer to the American elite.
If by triggered you mean upset then no. Annoyed by a troll? Yes. Politics, gun control, why don’t you just throw some religious commentary or abortion rights arguments into your banter?
The only person living in a bubble is you. I live here in CA. You don’t see me going on the WA blog bitching about their politics. It does not affect me, I’m not registered to vote there, nor do I care. You must live a sad, lonely existence in your enclave where your only entertainment is getting off on telling people what’s wrong with their home state.
Your right wing luminati conspiracy theories are entertaining but lets face it- what are you going to do about it? Sit in your underwear on your laptop and type away telling people how much better you are?
Now go enjoy your remaining days chasing kids off the lawn. Soon you will be a rotting husk in the ground. In the mean time, remember some of us actually live and work here and not interested in your Bolshevik stories. We’re just trying to get by and work with the hand that we’re dealt.
SoCalGuy is obvious avoid the subject guy. Attacks the messenger’s intent instead of arguing the topic.
This is SoCalGuy and all of the other Caltards: Leave my home state alone! Waah! How dare you insult my fragile Caldentity! Waah! It’s such an amazing place I have to take vacations to this blog because there’s just too much amazingness to handle! Waa! Buh but look at those other states and stop talking about the one this forum is about because I don’t like what you’re saying! Waaaaaah! Total fking douchebags all of these caltards have such fragile egos they epitomize the problem with CA culture it’s actually worse than states like Texas and New Jersey in this regard.
Surge, I am not Russian and I’m not Ukrainian, try again, maybe you win!!!….LOL
SoCalGuy, I’l leave you be, worshiping Pelosi and Maxine!!!….LOL . You are just hopeless!
What SoCalGuy didn’t mention is that he lives in an old flop of an apartment without air conditioning in north Long Beach where the beaches are dirty and filled with homeless and turd world hordes.
Surge, the “elites”, by and large are leftist globalists (most of them). Bezos, the richest in US is extreme left and owns one of the most leftist rag in US – Washington Post. Bill Gates, Soros and all billionaires in Silicon Valley are also extreme left. That is the reason they banded together to censor all conservatives. These are FACTS my friend, if you like them or not. I am not elite and I care less what others think about me and my opinions. I don’t need anyone validation.
SoCalGuy, has serious deep psychological issues. All the time he pipes in the discussion his religious opinions. Dude, you can go on this site from the beginning and see that I never mentioned anything about religion and abortion. Respect for private property, freedom of speech and right to bear arms are part of the US Constitution and it is what makes this country different than other socialist hellholes. Maybe you should refresh your knowledge of US history and Constitution. Having financial discipline is what any financial counselor teaches – it does not have anything to do with morality. I think that you need a psychologist. In regard to my life, don’t worry about me. I live it at the fullest and I am a happy man. I have all the reasons to be happy. To read and post on this site, I have as much right as you do. You don’t own it. If you need a safe space ask the web master.
See how easy it is to trigger a conservative? They question your sanity while they flip out because someone kneels during the pledge of allegiance.
You really want to make a conservative’s head explode? Explain to them that our founding fathers were liberals. Not only were they liberals but the worst kind, progressive liberals.
Oh and Reagan favored gun control and banning assault rifles.
SoCalGuy, get a life dude! Move to Venezuela; I heard they just increased the minimum wage by 3000% not like our cruel “capitalists” who don’t want to increase it by $1. It is a workers paradise and have a “democratic socialism” were they elect Maduro in unanimity – you know, like our liberals who think popular vote is the best. They had such a high percentage of idiots that all their popular vote can produce were Chavez and Maduro.
Former Prez Chavez’s billionaire daughter who currently resides in Switzerland thinks socialism isn’t nearly as bad as its made out to be! Socialism is so beautiful that she lives in Switzerland, one of the most conservative countries in EU. She run away from the democratic socialism implemented by her dad, and that with the most natural resources a country can have.
Socialism is always good for those 0.0001% at the top. Socialism eliminates any incentive for the productive class, till there are no producers and only consumers. Then, all they have to distribute is “money” and misery. Now, those in Venezuela with the 3000% increase in minimum wage they can eat money and wipe their asses with money (no toilet paper in the store). But the brainwashed SoCalGuy is to brainwashed to see it and he lacks any critical thinking to connect the dots. He is the poster child of what is wrong with CA and he didn’t even see the end end result coming.
SoCalGuy: See how easy it is to trigger a conservative? They question your sanity while they flip out because someone kneels during the pledge of allegiance.
You’re being disingenuous. Kneeling during the pledge is a symbol. You know that symbols matter. Wouldn’t you “flip out” if football players did a Roman salute? Or would you say, “Oh, it’s just an outstretched arm. No big deal.”
@Flyover, I don’t disagree with you. I’m just not going to change anything and either are you. As long as I keep making more money, I don’t give a shit. The union negotiated a 30% pay raise over the next 3 years. The company made $5 billion in profit last year. Is it still socialism if we get a piece? I don’t see my non union working class comrades celebrating Donny’s trickle down economics.
@son of a landlord
The pledge of allegiance like the Roman salute is just another form of bullshit nationalism. I served this country and did my time in the sandbox. I saw what this country stands for and no longer drinking the star spangled kool aid.
Scary times.
All I know for sure is that “heard from parents” or other immigrants is the quickest way to color a real history of that country with personal accounts. A recent immigrant is the last person who should be asked about history of that particular country.
99.9% of immigrants from Russia(USSR) have such a biased viewpoint of their country (which is normal because it is based on tales of experience vs scientific approach to history study), they are the last person to be consulted on such matters. Then ones who learn from them, take their super simplified stories and extrapolate it on the modern world. (I know because I was born there).
It is like going to New York and asking locals for a best restaurant…their suggestions are always colored with their mood, experiences and finances, but usually it is a very bad ask.
Let’s not get over our heads on this forum. Nobody here understands history well enough to make any comparisons (and not draw a laugh). Everyone here is just trying to wrap their head around making a quick buck (or make it in this world) using one of the most primitive way – real estate. You are taking yourself way too seriously by portraying your “knowledge”.
The only parallel I see is that there is widening gap between have and have-nots. Number of reasons, including leveling off in world’s wealth and a phase in technological advances. Solution has always been some form of shift towards redistribution of resources (socialism if you like). It was very brutal in Russia, mild/successful in Northern Europe, on-going in US. It is also tied to increase of global population. Luckily, comfort is cheap. Nobody is ideological now, most politicians just cater to selected populace groups whole views are narrow and un-inspiring.
Yeah, don’t listen to the person who actually lived through the horrors of communism ask someone who wrote a book about it instead. God you’re a tool. There is a woman running for Congress in CA somewhere, Fresno I think. Her parents fled the communists of Cambodia, but Facebook refuses to air her ads because they are too triggering to the snowflakes.
Communism is a 100 year old cancer that we thought we’d killed in the early 90s. Sadly, that cancer won’t ever go away because of gullible fools like you who think if we just get the right people on it communism will flourish.
People who have experienced communist government realize that they are laboratory mice in a great experiment. You know what happens in the end to laboratory mice… and free cheese is found only in mouse traps.
People who were just indoctrinated and subjected to public school/college propaganda still believe that N. Korea is a worker’s paradise because they don’t have wealth inequality.
That is the difference between us, Surge.
I’d rather learn about something from an eyewitness than from someone who “learned about it in college”.
Funny coincidence, Flyover. I found this on the internet this morning:
https://www.naturalnews.com/2017-10-17-communist-infiltration-of-the-u-s-congress-exposed-in-mind-blowing-interview-with-documentary-filmmaker.html
Communists have been infiltrating all American institutions for decades. Communism is very seductive to the feeble minded. Which is why Democrats push it to their Dindu constituencies. See that rich over there who has a nice house and a nice car? Vote for me and we’ll destroy him!!! And sadly it works.
Lol, 1month ago it was 55gallon water restriction, then crazy weather patterns, now communist infiltration. You love to be scared, don’t ya.
“Only small secrets need to be protected. The large ones are kept secret by the public’s incredulity.†~ Marshall McLuhan
Seeing more homes for sale up in City now, Any Chinese market disruption and margin calls might brings some real price reductions…
Smart folks getting out….
The challenge is to convince sellers to price at market value or slightly below. Sounds simple right? I can’t tell you how many sellers are showing me comps from months ago and expecting the same price or even higher! The market is softening and sellers who want to sell fast are slow to adjust to the shift. It will also get more challenging for some agents. It’s not normal for houses to sell within days or weeks. Some agents got used to that and looked like rockstars. Now is the time to put more effort into marketing, educating and selling. A good thing IMO.
You are a smart realtor who understands the cycles. Congratulations.
In the neighborhood I live in, highly desired and very cultural mixed, Chinese own many a home sitting vacant here. I’m starting to think Japanese real estate adventure in 80’s is replaying again…..Margin calls create all sorts of opportunities, inventory building rapidly along with rate moves are bringing that 20% price reduction into play, it was artificial to begin with. No different than a stock, melt ups do melt down….the broker listings here have a chinese flavor in the homes I’m seeing….
its due anyways
So you are saying realtors have to actually do work to get a sale?
While San Fran real estate fundamentals become ever more challenging, CME home price futures contract prices (on SFR/San Fran) have nudged higher (since June 29). Forward prices consistent with HPA slowing after 2020.
http://www.homepricefutures.com/wp-content/uploads/2018/09/SFR-price-changes-since-June-29-1.jpg
For our resident marxist (bolshevik) shill – Surge:
Here is another article about a potential DNC “presidential material” who is jumping ship right before it sinks – Emanuel Rahm
https://www.wirepoints.com/rahm-emanuels-real-reason-for-dropping-out-the-chicago-time-bomb/
And without the scheme, the risk of a meltdown is real. That’s a risk Rahm is unwilling to stick around for. He doesn’t want to be the mayor that begs for a bailout, especially since he has ambitions for higher office.
Emanuel will soon hand over the time bomb that is Chicago finances to his successor. Will that new mayor tackle the big and unpopular reforms by taking on the unions, special interests and crony businesses to bring the cost of Chicago government in line with what residents can afford? Or will their solution just be more tax hikes that destroy the city’s tax base?
Chicagoans better hope, and vote, for the former. The bomb is ticking.
He wants to offer his success to all americans dreaming about socialism and marxism.
Rahm Emanuel is jumping ship for another reason. There are over 51,000 (not a typo) sealed indictments coming down for members of the Deep State in the next few months, and he is a big player. The rats are panicking and are jumping ship.
So Cal Guy earlier asked you, “Your right wing luminati conspiracy theories are entertaining but let’s face it – what are you going to do about it?” Well, I voted for Trump, and this would not be happening without him at the stern. I’ll be making popcorn, as this is going to get very interesting.
Even the fake Flake (Communist of AZ) is jumping ship. He just wants to do maximum destruction before doing so. I hope the new AG will investigate this treasonous communist with R after his name.
Goodness, this economy is worse than 1933!!!!
NBC NEWS:
“U.S. small business optimism surged to a record in August as the tax cuts and deregulation efforts of President Donald Trump and the Republican-led Congress led to more sales, hiring and investment, according to a survey by the National Federation of Independent Business. The NFIB Small Business Optimism Index jumped to 108.8 last month, the highest level ever recorded in the survey’s 45-year history and above the previous record of 108 in 1983, set during the second year of Ronald Reagan’s presidency. The August figure was up from a 107.9 reading in July.”
CBS NEWS:
“The numbers: The number of job openings in the U.S. climbed to a record 6.94 million in July in a clear sign that a booming economy is entering the second half of the year with a big dollop of momentum.
Big picture: The U.S. economy is booming. Growth surged in the spring and has carried through summer. Unemployment is uber-low at 3.9%, layoffs are at a 50-year low and small-business owners say they are more optimistic about the economy than ever.”
Bbbbut bbbbut bbbbut DOOM AND GLOOOOOOOOOOM!!!!
This debate about prop 13 is ridiculous. Black stone, REITS, big money, corporations, “mom & popsâ€, and all homeowners should never allow it to be abolished. The real culprit is dollar inflation by the federal reserve as a “hidden taxâ€. Global money will always buy up cheap housing before you can afford it (get your loan approved), and you will get left overs.
Even if the laws changed, smart parents will always find loopholes in new laws and plan around the system for the benefit of their children. I am so sorry that your parents were not that smart and/or hardworking. Please do yourself a favor, get an education and make the system work for you instead of the other way around. If you are a slave to the economic system, then figure out how to get out of it instead of trying to enslave everyone else around you. WORK HARD, SAVE HARD, STUDY HARD. And don’t hate the ones who got lucky, they have their own personal struggles to deal with.
Agree with you, but majority of commenters here focus on stuff beyond their control: government, taxes, neighbors. Disgusting.
Complete lack of adaption is so un-american.
Surge likes to focus on what he thinks other people shouldn’t be focused on. Total douchebag!
You can go fk yourself. You work hard and earn your own keep without expecting others to carry your freight.
Linsanity,
That’s exactly the reason why prop13 needs to be repealed and replaced. Certain boomers and the rich got used to getting freebies that others pay for
I’m glad you subsidize me and my house Millie. Keep up the good work
my pleasure Ned!
I rent a dirt cheap apartment. Rent has never gone up.
When the market crashes and I buy, my property taxes will be tied to the low purchase price.
I cant imagine buying high and paying 1.1% of that highly inflated price in property taxes until infinity. I dont think i could ever do it. I would rather rent end inherit the houses free and clear (including prop13).
Cyrpto plunges 80%: https://www.bloombergquint.com/onweb/2018/09/12/crypto-s-crash-just-surpassed-dot-com-levels-as-losses-reach-80#gs.G6is9Ww
I guess Milli would advise, now is the time to buy! Buy now or be priced out forever!
80-90% drops are very normal for crypto. It’s still at the beginning.
This happened in 2013 as well. Over time the market will mature but at these beginning decades you have fluctuation which let’s you buy in very cheap and sell very high. My litecoin made 5,000% in 2017. I dollar cost avg a little bit into crypto each month. You just do that for a couple of years and sell during the next frenzy.
“80-90% drops are very normal for crypto”
Millie you are a national treasure. Don’t ever change!!
“80-90% drops are very normal for cryptoâ€
Really now.
When crypto drops 100% then *that* will be “very normal”
I am glad you guys get it now. Crypto has insane percentage gains and loses which makes it so profitable. Right now, when nobody buys and the last sucker sold is when you buy in for cents on the dollar. Then during the next frenzy when a coin is up over 5,000% you sell and make a profit of a lifetime. You think 5,000% is made up? Well google it or read below:
http://www.cnbc.com/amp/2017/12/12/litecoin-price-hits-record-high-up-nearly-5800-percent-this-year.html
After the frenzy when you sold you want the coin to lose 80-90 % in value. How else would you be able to rinse and repeat?
Crypto is like the internet in 1997. Eventually the basic open source technology will just be used by the banks. That’s already started.
It’s like westernunion.com. The only intrinsic value it has currently is for illegal activity.
So what now, is it like the internet or is it just for illegal activities?
To be honest, i dont care about intrinsic value…i care about bubbles and how to profit from them. Why would wall street have OTC’s and want to have a BTC ETF approved? Answer: because they care about making money.
Whats the intrinsic value of the dollar? Whats the intrinsic value of buying an overpriced house if the cash outflow is light years away from the rental rate? Do you think housing bubbles get inflated because the intrinsic value goes up 10% each year? Its fear driven. Fear of missing out or fear of never owning or fear of rising interest rates.
Right now, the fear is on the sellers side. Especially, those that used leverage to finance several flips at the same time and cant find dummies to buy them.
What has changed? Buyer sentiment. Prices in the last few month did not go down because the intrinsic value fell. Its the change of a cycle, the change of buyer sentiment. Buyers no longer fear of missing out. They fear of catching the falling knife.
Millenial, for those of us who have been around the monopoly board a few times the final result with crypto is completely crystal clear.
You will ultimately be screwed, but it will teach you some good lessons.
There is absolutely no value to crypto other than facilitating money transfer for illegal activity. That’s the only reason it isn’t worth $0 right now.
Shhhhh, don’t let the crypto-schmucks know their fake money is worthless.
Worthless? Huh? Have you compared btc YoY? Nah, don’t even bother. Wait until I tell you I sold again 🙂
I’m hoping the same isn’t true of US Rasbuckniks.
There’s a movie on HBO about dating in the world of Tinder. I watched that and both laughed and cried at the idiocy of kids today. My favorite is the girl who says she is non-binary, transgendered person who was “assigned” a female body. The stupidity knowns no bounds!! The same generation that spews out that type of nonsense, also thought Bitcoin would be worth a gazillion dollars, but owning real estate is like so 2005 man!!
Conclusion: Millennials ain’t too bright.
Meh, whatever. As long as they pay me rent on time, do what you want kids.
Landlord, you nailed it. BTC will be worth a shit ton of money in the near future. I see 500k for one BTC easily in the next decade. RE is 2006 right now. Two more years and we can buy that dream house for 50-75% off-easily. Wait and see!
I truly believe that we as a society are getting less intelligent and am reminded of that movie Idiocricy. We elected a celebrity into office (I’m not against Trump, I am just pointing out most people are more familiar with his TV reality show vs. his life’s accomplishments and/or qualifications) and then large parts of society decide to throw billions of dollars into invisible digital currency with names like “DogCoin”, “ZCash”, “Tron”, “Gifto” etc. What’s next?
“What’s nextâ€
I have one. You won’t believe this but there are people who make their biggest purchase in life without much research. They actually think if they don’t buy they will not get another chance to buy. They haven’t even heard of rental parity or economic cycles!
Yet, it takes them less time to buy an overpriced house than buying a car! I am talking about these people who buy during the bubble with less than 20% down (and who have no idea about PMI) and remain underwater for many decades. So yes, I totally agree. This is like the movie idiocracy!
just googled an old address that I rented at while working a low paid research job in a genetics lab at UC Santa Barbara 7 years ago. With $2300 takehome pay, a 1 bedroom was somewhat out of my range.
This house at 907 W Valerio St was subdivided into 4 separate units in the main house, plus the apartment above the garage – each paying about $900 plus utilities. The house was totally out of compliance with normal building codes, but I did appreciate the larger space provided by these strange lofts making it sort of feel like a studio apartment. The neighbors explained that a man who didn’t know what he was doing built the house himself, including measuring incorrectly and needing to take two feet off the neighbor’s property with an easement because the required driveway wasn’t wide enough (and now cannot permit a truck or SUV). There was zero insulation so the house would be super hot and then cold in the winter. The furnace had long ago broken and there was no AC – it is just stucco on top of plywood. There were major problems with slab leaks in the plumbing that the landlord didn’t address at all – so the cold water ran hot. He didn’t pay attention to the leaking water heater as though he didn’t understand that this is what happens to water heaters, so he didn’t replace it for months and it heavily soaked into walls and the floor, and we had to essentially use stepping stones to get past the wet carpet. There were signs of termite mounds in some spots. There was no ceiling below the second story or attic, and instead it was tall open ceilings, with a cheap ‘loft’ hammered together from 2x4s. Only one of the ladders had an appropriate railing and two rooms had no railing so you could not allow children or disabled people to even go up it because they could fall from 8′ – people regularly injured themselves by carrying items up a vertical ladder and slipping. The upper storey had electric supplies by power cords run up the wall. For cable internet, Comcast didn’t want to do the hookup initially because it looked strange – the landlord had run the cable along the ground outside the house, and then for each room punctured a hole in the wall and ran the cable into the room. The landlord did not do anything with the $5000 rent he was collecting as far as maintenance.
A few years after I fled the state back to Oregon, the landlord died. His widow could not either just sell the house or keep it going using the rents even though the original cost of this house was like $260,000. It went into foreclosure. Zillow says a company that specializes in foreclosures or flipping paid $680,000.
But now, a year later, they appear to be trying to sell for $900,000. Look at the photos here. They changed the carpet, and applied a coat of paint. There is no photo of the kitchen but they appear to have gutted it. The pictures carefully avoid angles showing the strange ledges or lofts but you can see the timber supports. I speculate the city inspectors gave them bad news so they are trying to take a quick profit without actually repairing it.
https://www.zillow.com/homes/907-w-valerio,-Santa-Barbara-CA_rb/
just googled an old address that I rented at while working a low paid research job at UC Santa Barbara 7 years ago.
This house at 907 W Valerio St was subdivided into 4 separate units in the main house, plus the apartment above the garage – each paying about $900 plus utilities. The house was totally out of compliance with normal building codes, but I did appreciate the larger space provided by these strange lofts making it sort of feel like a studio apartment. The neighbors explained that a man who didn’t know what he was doing built the house himself, including measuring incorrectly and needing to take two feet off the neighbor’s property with an easement because the required driveway wasn’t wide enough (and now cannot permit a truck or SUV). There was zero insulation so the house would be super hot and then cold in the winter. The furnace had long ago broken and there was no AC – it is just stucco on top of plywood. There were major problems with slab leaks in the plumbing that the landlord didn’t address at all – so the cold water ran hot. He didn’t pay attention to the leaking water heater as though he didn’t understand that this is what happens to water heaters, so he didn’t replace it for months and it heavily soaked into walls and the floor, and we had to essentially use stepping stones to get past the wet carpet. There were signs of termite mounds in some spots. There was no ceiling below the second story or attic, and instead it was tall open ceilings, with a cheap ‘loft’ hammered together from 2x4s. Only one of the ladders had an appropriate railing and two rooms had no railing so you could not allow children or disabled people to even go up it because they could fall from 8′ – people regularly injured themselves by carrying items up a vertical ladder and slipping. The upper storey had electric supplies by power cords run up the wall. For cable internet, Comcast didn’t want to do the hookup initially because it looked strange – the landlord had run the cable along the ground outside the house, and then for each room punctured a hole in the wall and ran the cable into the room. The landlord did not do anything with the $5000 rent he was collecting as far as maintenance.
A few years after I fled the state back to Oregon, the landlord died. His widow could not either just sell the house or keep it going using the rents even though the original cost of this house was like $260,000. It went into foreclosure. Zillow says a company that specializes in foreclosures or flipping paid $680,000.
But now, a year later, they appear to be trying to sell for $900,000. Look at the photos here. They changed the carpet, and applied a coat of paint. There is no photo of the kitchen but they appear to have gutted it. The pictures carefully avoid angles showing the strange ledges or lofts but you can see the timber supports. I speculate the city inspectors gave them bad news so they are trying to take a quick profit without actually repairing it.
https://www.zillow.com/homes/907-w-valerio,-Santa-Barbara-CA_rb/
I’ve said this again and will say it until blue in the face….never buy a flip. The quality of both materials and labor is rock bottom garbage.
Sad how silly some buyers are. Why buy during the peak and be underwater forever?
https://www.zerohedge.com/news/2018-09-14/10-years-later-many-underwater-counties-have-not-escaped-housing-crisis
Horrible. The house will be knocked down. Santa Barbara land is what they’re selling. How did someone not get sick from mold poisoning?ih
Despite efforts by state legislators at creating a socialist utopia, California still has the highest poverty rate in the nation at 19%. the Orange County Register notes a significant outmigration of people in their child-raising years – as the largest group leaving the state, some 28%, are those aged 35 to 44.
According to IRS data from 2015-2016, the latest available, roughly half of those leaving the state make less than $50,000 per year, while roughly 25% of those leaving make over $100,000.
And according to ULI, 74% of California millennials are considering an exodus.
https://www.zerohedge.com/news/2018-09-13/california-tops-national-poverty-rate-key-demographic-plans-exodus-state
Meh. Every few months there’s some article saying 75% of Californians are thinking of moving out. They think a lot but rarely actually do it. I have a buddy in San Jose who has been “thinking” of moving for 15 years. And I predict 15 years from now he’ll still be thinking about it. He hates CA politics, hates traffic, hates that he paid $1M for a house that would cost $250K in 80% of the country. But he always has 2 reasons for not leaving…family and weather.
“Nobody wants to be in California. It’s too crowded.”
To all those who champion diversity, this is what it brings:
Maxine Waters Encourages ‘Resistance’ to “Knock Off†Trump
https://www.infowars.com/maxine-waters-encourages-resistance-to-knock-off-trump/
“Congresswoman Maxine Waters is under fire for spouting more incendiary rhetoric after she gave a speech in which she called for leftists and Democrats to “knock off†President Trump.
“There are those who say, ‘What if we get rid of him? Then we’ve got that Vice President and he’ll be worse.’ I say knock off the first one and then go after the second one,’†said Waters.
“The comments were made during an event in Washington DC on Friday night where Waters received a “diversity†award.”
“Waters’ words also fly in the face of claims by Democrats that it’s Trump who is responsible for pushing divisive, hateful rhetoric.
“Back in June, the California lawmaker stoked controversy when she encouraged supporters to harass Trump administration officials.
“Let’s make sure we show up wherever we have to show up. And if you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd. And you push back on them. And you tell them they’re not welcome anymore, anywhere,†said Waters.”
Yeah, ‘diversity’ means knock off whitey, and other insanities. Forget about it. I want to live in peace.
QUESTION ABOUT PROP 5 (and please Mr Landlord with your russian bot like cheerleading of 45 and the Republican Congress and Millenial’s perma bear but loves crypto and living at home no need to respond either of you.
As a recent homeowner do I vote for or against Prop 5? What are the pros and cons? Is this a test balloon for a repeal of Prop 13? Hoping for a real conversation here folks not a bunch of racists complaining about CA becoming a communist state…thanks in advance.
Hi LJ,
What makes you think I am a perma Bear or love crypto? I love making money and crypto and stocks helped me to increase my cash balance tremendously.
Also, I wish I would be living at home but the commute would be longer. I rent 10-15 min from the beach and close to my tech job. My rent never increased. I also said month ago we reached the peak and i said multiple time the inventory is low is on of the last sales pitches the RE cheerleaders have in their portfolio.
My strategy is to hoard cash for the crash and buy low when others run for the hills.
How old are you?
LJ:
Vote No on Prop5. The Prop is being pushed by the California Association of Realtors. What they want is more inventory to sell, and higher prices to support their industry. This is not for you.
And those 55+ as a group really don’t need assistance, the CAR is pandering to those who will vote. Boomers and the Silent Generation have ~83% of the wealth. Do you think those 55+ need those under 55 to subsidize their taxes? I think not.
“Boomers will continue to be the wealthiest generation in the United States until at least 2030 (figure 2). Their share of net household wealth will peak at 50.2 percent by 2020 and decline to 44.5 percent by 2030, quickly tapering off thereafter as mortality rates escalate.”
https://www2.deloitte.com/insights/us/en/industry/investment-management/us-generational-wealth-trends.html
As I explained in my original Prop 5 post, Prop 5 expands the coverage of Prop 13 for Seniors who sell one house and move to another. They can take the Prop 13 tax base with them anywhere in the state under this new Proposition. Before, it was limited to certain counties. It isn’t a repeal at all. That may be coming in 2020 for commercial property.
Prop 5 expands the coverage of Prop 13 for Seniors who sell one house and move to another. They can take the Prop 13 tax base with them anywhere in the state under this new Proposition.
Not exactly. Seniors don’t get keep their “Prop 13 tax base.” Rather, their new tax base will be the AVERAGE of the old base and what the new house’s property tax would be without Prop 5.
Right now, when seniors move to a new house, it must cost no more than what the old one sold for, in order to keep their tax base.
Under Prop 5, seniors can UPGRADE to a more expensive home, without paying a full assessment. The new assessment will be an average of their old base, and what their new base would be without Prop 5.
Without Prop 5, if seniors sell a house for $1 million, their new home must cost no more than $1 million to keep their Prop 13 tax base.
With Prop 5, seniors can sell a house for $1 million, and buy a new house for $2 million, and get SOME tax benefits. Not the whole Prop 13 tax base from the $1 million house, but still, a reduced rate.
Prop 5 allows seniors to UPGRADE and still retain SOME tax relief.
I would say as a homeowner you should vote *for* prop 5 since in case you sell your home and move when you are old you can keep your basis. It gives you more options.
As to the effect on your home value that is a very complicated matter and I don’t think we can predict either way what would happen.
It only benefits homeowners 55+ We can UPGRADE to a more expensive house, and retain SOME of our original tax base.
It will raise the price of houses. And increase inventory. This is why realtors like it.
Homeowners 55+ will benefit.
Realtors will benefit.
Younger homeowners, it will be a wash. They can sell their home for more, but it will cost more to buy a new one. (Unless they’re moving out of state — then they benefit.)
First time home buyers will lose under Prop 5, as it will raise home prices.
Millennial and All,
It’s like 2006 again and it’s time to dust off the most classic real estate commercial of the time.
Please view this and if the disembodied voice of Suzanne starts speaking to you, just run.
As a further recommendation, please listen to the Dr Laura’s advice to a similar couple after the crash.
https://seattlebubble.com/blog/2015/09/25/friday-flashback-suzanne-researched-this/
“You mean you bought a house when you really couldn’t afford it”
https://seattlebubble.com/blog/2007/08/22/suzanne-researched-this-part-2/
Glad I don’t live next door to *that* couple!
Classic – thank you! My BF keeps threatening to buy a house by himself since I’m dragging my feet on this (yeah, like I want to buy near the top of the market). He saw one two weeks ago that he was ready to put an offer on, and I told him to go for it – make an offer. He panicked because I showed no inclination to join him. The house is still on the market, and the price has been dropped twice already.
See, that’s why it pays not to get married. Your money is not community property – heh, heh.
Karin, you are way to smart to buy now.
Even realtors at open houses tell me that prices will continue to go down. They also tell me, “lets low ball them”.I Just talked to a realtor who told me about the house he lived in and that he sold. That he thinks we peaked in February and now he is renting and wants to buy again in 2 years after it crashed.
That is such a dramatic change. Just at the beginning of summer, nobody said that.
You have seen this all before. Once the market set a new trend it stays there for a while……just like a cruise ship.
I have been visiting tons of open houses lately, great way of checking out the neighborhoods i consider good locations. I agree with what FLYOVER and others said before, 80%-90% of realtors are all in one bucket but about 10-20% are very useful, knowledgeable about the area and are on the same page in terms of where the market is headed. ALso, by visiting all these open houses you get a good eye of what is quality and what is a cheap flip. Often the investor is also the listing agent. When they see me checking out the “new” kitchen and cheap materials and hear me asking about if its a flip or not, they immediately stop the conversation. They know i know whats going on and that i am not interested in buying their flip. In addition, every time I am done with my open house tour i learned at least one little thing. It doesnt cost me anything but a little bit of gas and time. Its a good investment.
Where are our RE cheerleaders telling us the inventory is low lie?
Fact is (California and Seattle) inventory is up and sales are down (waaay down).
I know, we don’t like facts.
Instead, this is the year when millennials go out and buy in droves! Or, this is just the end of summer slowdown. Lol!
All is not gloom and doom here in the good ole USA.
huge amounts of job openings…household median income rising… poverty declining.
I guess history tells us there will be another recession but from whence will it come???
https://loganmohtashami.com/2018/09/12/positive-poverty-income-job-openings-data-2/
Breathe QE Abyss,
everything is fine. Every morning just repeat this:
We have low inventory and record high demand. House Prices cannot fall.
The Trump economy is the best it has ever been. Stocks cannot fall.
Everything is fine. Recessions wont happen anymore. A thing from the past.
feel better? Just keep repeating it.
Where is all this CASH coming from???
over 20% of all buyers this year in LA are all-cash.
https://la.curbed.com/2018/9/17/17861524/cash-buyers-los-angeles-home-prices
“All that cash”
Flippers. I am watching a few flips that occurred over the summer. Bought in spring and tried to sell 2 months later for 200k profit. Its sitting and sitting and sitting. Oh well, its only the after summer slowdown. NEver mind it was expected to sell right away with 40 offers flying in. Now, its open house after open house and price reduction after prie reduction.
Come on guys, no takers? Lock in your low interest rates before its too late!
Played golf yesterday. 70 degrees, not a cloud in the sky, no humidity, slight breeze.
Heaven. Late summer, early fall is my favorite time of the year. Still hot enough to do outdoor things, but not too hot, low UV index, and best of all the tourists are all gone.
Of course in 3 months it will be 38 and sleet, lol. But my point is there is nice weather everywhere. And paying 5X the national median to have that nice weather for an extra couple of months in LA is kinda dumb.
I shot a 97 if you all are wondering. But that’s a true 97, no mulligans, no gimmes, take all penalty strokes, etc. Which translates into about an 87 the way most people play, with all the cheating 🙂
“best of all the tourists are all gone.”
all the tourists….rofl. Yeah, these tens of thousands of tourists who travel from all over the world to visit Spokanistan. Thank goodness they are gone after the summer. There was no parking, the streets, parks and shops were filled with these tourists. Number one of top travel destination is California and but Spokanistan is not far off.
Spokanistan, lol…
http://www.khq.com/story/38385298/spokane-ranked-3rd-as-most-dangerous-city-for-property-crime
California used to be a top travel destination for many in the US before it became dirty crime infested third world communist hellhole. Now Commiefornia is a travel destination for turd world hordes hoping to drop an anchor baby and the homeless.
I like overcast skies.
Late summer, early fall is the worst time in L.A. September and October are often the hottest months.
You like fall? What fall? L.A. has no fall. Only hot & sunny Halloweens.
Someone told me when he was a kid and went trick or treating in the valley, it was over 100 degrees one Halloween. Yuck!
I hate L.A. weather.
Right. The weather in SoCal has no personality, much like many its inhabitants.
I’m telling you dude, the major flaw in your commentary on this board is bragging about your location so much. I’m not saying that as a hater I’m saying that you are already in the most inbound area for fleeing texans, Californians etc. For your own sake, why make it worse?
Your quality of life will be impacted negatively by this trend. If you love where your at, which is cool, I would stop telling everyone to move there.
People used to brag about CA too and then it became a total S-hole. You do not want everyone who has internet access rallying their dirtbag families and caravanning to your area to vote for subsidized housing, bus stops, lgbt conversion parades at your kids schools, and your new neighbors teaching them about the virtues of cannabis.
I’m not hating I’m honestly saying that as a head’s up. You don’t want our turds in your neighborhood, but if you keep pitching hard you made get them. If you have a good spot then keep it a secret for the sake of your family so they don’t have to flee when it is ruined, like CA. Unless you work for the greater CDA tourism board or something, then disregard above LOL
Nor Cal fella,
my guess is the way Mr. Landlord presents himself here doesn’t make anybody want to live in Spokane. And btw. what bragging about Spokane would possible make us want to live there? What we hear from Mr. Landlord is a constant bashing of CA, liberals, poor people, immigrants and renters. And a few funny statements like “This is the year when millennials go out and buy in droves, Living in an apartment with kids is child abuse, every tech employee in california gets stock options, an avocado toast cost 18 dollars, and working for a large corporation is the last thing you want to do, have a bezos and zuckerberg like thinking”. He is funny and adds entertainment. I give him that. Also, there was one good piece of advice when he talked about how he vets potential renters.
Good point Millenial.
Long term rates have finally started to rise with the 10-year treasury just over 3% and the 30-year treasury at 3.23%. Current interest rates on 30-year fixed mortgage approx. 4.75% with some companies like Quicken Loans advertising over 5% APR. It is possible we will see mortgage interest rates at or above 5% by the end of the year.
The Treasury rates were over 3% for the 10 year in April & May too, but they went down again. We’ll see what they do now.
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
Agreed. But the current period of low interest rates we have been experiencing for years is artificially created and not healthy. I think a slow to moderate climb is well past due. Just slow enough to prevent hyper-inflation. Our current president has been vocal about his opposition to higher interest rates, but he never explained what his definition of “higher” rates is. I don’t think there is much he can do about it anyway. I think we could see 6% mortgage rates in a couple years, barring any recession. Keep in mind that with the median US home price at approximately 250K, this would effect the portions of our country with lower costs of living far less than places like CA and NY.
How quickly things change, huh IELandlord?
Tired of people telling you that interest rates are still low by historic standards? #metoo
little lesson in interest rates:
look at inflation. Inflation today is about 2%, so people lend money for above that…. 2.5-5%. The savings rate is more like 1% or less. That’s why you hear people who save money, lose money.
So you hear people say that in the 70’s and 80’s interest rates were much higher! Its a bargain today!
True, interest rates fluctuated between 8% and over 14% back then. And inflation was much higher too. Inflation was 13% on January 1980 and peaked in April 1980 at 14.76%. The median home price in the 80’s was about 47k.
In other words, high interest rates in the 70’s and 80’s wasn’t a big deal at all. Home buyers bought low (dirt cheap compared to today) and could refinance later to a much lower rate.
But how do rates impact home prices today? If you move out of your house (say its worth 600k) and you move right back into the same house (still 600k) you are already paying more than before. Hundreds of dollars more because rates are going up a percentage point. Just because rates are 5% today instead of 14% (80’s) doesn’t mean you get a better deal today. That’s because the base (your house price) changed from 47k to say 600k! Still dont believe me?
14% of 47k is 6,5k. 5% of 600k is 30k! BTW, median household income in the 80s (for whites) was ~50k. Its just a few thousand dollars higher today.
But, of course its much easier to say, take advantage of historic low rates! Buy now, before rates go up!! You are making out like bandits if you lock in today’s low rates! People who say that have an agenda. They want you to buy high.
You also have an agenda. Observing you and them is like listening to a fattie and anorexic argue about how much food normal people should eat.
Oh Please,
yes, i have an agenda:
buy low, learn from others, exchange infos on this blog.
Whats your purpose? I know….nothing will come back.
Let us know when you get the flux capacitor working.
The math doesn’t lie. We paid $78000 for a 2 BR in 1980 at 14%. We made about $36K/yr with the two of us working. Two years later we had a baby, she quit work and I had a couple of raises. We were paying nearly half our income for housing. A couple of years later we were able to refi and barely made it. It was difficult but not impossible. That same 2BR is over $500K today. A couple like us would make about $100-120K today, so at a 4% interest, we’d be better off now except for a much smaller tax deduction.
I checked my numbers with the westegg.com inflation calculator and $36 K in 1980 is about $109K last year. My numbers were from my knowledge of salaries for people at the same stage in the careers we had.
Thanks Joe for confirming! Wow, incredible, your house cost only 2 times more your salary back than! Now, its like 8-12 times more what people make. Plus, your property taxes were tied to your incredible cheap purchase price and locked in all these decades!
AND on top, tuitions were free back then too! Nowadays, people actually go into debt for their education! Insane how bad things got and how buying is so much harder now then it was back then.
Well, it makes sense that you need an army of RE cheerleaders, realtors and lenders that preach the propaganda day in and day out. “buy now, its a great time to buy! interest rates are still low! take advantage, take the risk, be a man. There has never been a better time to buy, if you dont buy now, you will never own.”
M: Actually. our payment was about 25 % of our salaries because we put down 10% and had a $10000 second at a lower rate. Two years of raises didn’t make up for the loss of one salary, but the eventual refis at a lower rate did. On that point you are 100% correct. Today’s buyer will not get relief from lowered interest rate on refinancing. At 4%, the payment on that tiny house would be about $20K/yr which is 20% of what a couple like us would make make today. The taxes would be about 6.5 times higher on a salary about 2.8 times higher., so that would be more of a burden on today’s young couple. The recent changes to the tax code on deductions might be a wash or moderately burdensome. So, if you are a young couple, and lower your expectations (< 1000 sq ft 2BR), you might be able to swing a place. Would I recommend it? That depends on your lifestyle and rental costs. Also on your job security, and whether one of you will quit working when the kid comes. That would be tougher today because as we both know, a refi won't lower your payment much.
As a homeowner and out-of-state property landlord, I wouldn't be looking to expand my holdings in RE at this time. I don't think rising rates will be the catalyst, but rather some world financial crisis that will cause debt deflation again. That is different from starting out in long term ownership of your own house. You are likely right that patience will pay off. The question is will that delay impact your lifestyle choices?
Yes M… The dollar denominated cost of a cash purchase would’ve been 2X salary in 1980, but we were young and needed to borrow at 14%.High inflation made it more likely that values would climb if we waited. (They did!) Mostly investors buy for cash, so for your average Joe, the monthly payment is King.
Joe,
“So, if you are a young couple, and lower your expectations (< 1000 sq ft 2BR), you might be able to swing a place. Would I recommend it? That depends on your lifestyle and rental costs."
I am not a fan of HOA's and wouldnt buy a condo as primary residence. My house needs to be at least over 2k sq. ft. Maybe a cookie cutter, great school district and a outstanding pool with overall very low HOA's. Not including anything on the house. That, i could live with. Right now, is the worst time to buy, we are just past the peak (3 month of price declines). The fun starts in 1-2 years when you see desperation. Prices have a looong way to go down before it meets affordability. Notice, how you don't hear anymore about the millions of cash buyers from china?
"As a homeowner and out-of-state property landlord, I wouldn't be looking to expand my holdings in RE at this time. I don't think rising rates will be the catalyst, but rather some world financial crisis that will cause debt deflation again. That is different from starting out in long term ownership of your own house. You are likely right that patience will pay off. The question is will that delay impact your lifestyle choices?"
I agree, its not interest rates alone. Its higher interest rates in combination with SALT, general affordability issues, stagnate wages, slowdown in foreign cash buyers, and overall economic cycle. Plus Millennials who are are drowning in debt and don't even think about buying and having kids. Delaying the purchase absolutely is the right choice because in California its all about timing the RE market. Take me for instance, if I would have bought, i wouldn't have been able to save that much money, rent a dirt cheap apartment, go on vacations and profit from the stock market (and speculative investments, aka crypto). I just had this discussion with my wife today. We constantly check on what they are approving us for loan wise. Its insane. 43% debt to income ratio is no problem. They would sign us up for a million dollar + home without any problem?! People are way over their head buying at 43% ratio. This is based on gross income….what about emergencies? car breaking down? Vacations? Job loss? kids? future childcare?
There is no doubt, this will end up exactly like last time. Just be patient.
The numbers on foreign buyers in the market were posted by me in a previous post earlier this year, and it is tens of thousands, not millions. But then, sales were in hundreds of thousands not millions. They are a factor, but not a tidal wave. The poor (unlikely to buy a late model car let alone a house) foreigners are a much bigger factor in that they eat up the supply of rental housing and make rentiers big profits that can be put back into the market.
I didn’t buy a condo, but rather a small antique house from when houses were either very small or very large. There are a few old neighborhoods that have those around here. Beautiful but decidedly tiny.
Millie, you are absolutely correct. 43% debt-to-income for a home is insanity. If this is your situation for an ideal home (or anyone else), buying should not be on the table. Income is simply not high enough.
Buying vs renting (equivalent) might drop 43% to 35%. (because of you rental parity assumption). Still very high.
No matter what, you need to earn more money.
Lol Surge,
and again we could be further away from each other.
43% is insane, we agree. The key here is that lenders will go for it! In other words, people buy waaaaay too much house. Not much has changed compared to 10 years ago. People are way over their head with debt. As soon as prices fall, they run for the hills. They are already trained.
I dont desire to buy a 1.5MIO dollar home. I will buy that home when its priced right (700k). I dont need to have a higher income. I am already way above avg. No debt, over 100k income, wife works, 800+ credit score, big cash balance, great career.
All i need to do is continue to research, track and wait until the market is ripe.
People who think they need to buy high or make more to pay premium dollars are doing it wrong. All wrong. But we need those people too. Not everybody can have an investor type thinking when it comes to home buying.
Problem is, Millie, homes that are 1.5mln today will never cost 700k again. At least the ones in the prime area. Not even 1.2, 20% drop maximum at some point.
Some key points:
1) Affordability is unlikely to improve. Even though prices dropped in 2007, affordability did not significantly improved.
2) Even though they might quote you 43% debt, there is still process to get fully qualified and actually get a loan. They can promise all they want, but underwriters will do final checks. Dan can weigh in on that, how many people actually buying at 43%
3) Best locations normally go for a premium with people with good finances…they can weather storms. They won’t sell at 50% discount en masses. My condo bought in 2005 experienced 30% drop in value throughout the crisis, and this is good (but not affluent) location. Shittier location might experience larger drops, but who cares if you never going to buy there.
During every bust in California you can buy homes 50% off. This is for prime locations.
In crappy area’s like the Inland Empire you can buy 70% off the peak during the bust. Easily.
Not only are these facts but it makes perfect sense that artificially inflated prices drop down to true value eventually. Every bubbles pops at some point. Just have patience.
You can already see price reductions now and we haven’t even started the recession yet.
Millie, just for you, next bust will be 90% off in the prime areas… Owners, banks will take a loss, so you have your dream bust.
And for inland, they will actually be paying you to take their distressed property off their hands, because you know it is practically a timeshare.
You have a good future lined up for you
Naaah Surge,
A 50% discount is perfectly fine. No need to exaggerate. Just remain realistic.
Yep, just for you Millie the sellers (or banks) will be selling to you at 2002 levels.
Every bust offers 50% off. Just facts
A house is by far the best asset class in an inflationary environment.
We will see another 1970s period in our lifetimes.
Tankinsight,
Yes, if bought during the crash. Buying during the boom/peak is like throwing money into a fire pit.
The Rentenmark stopped the hyperinflation in Germany. (A currency based on land values and an annual levy.)
If inflationary times are inevitable, market timing is less important. (Spend bad money on something good…Gresham’s Law.) If deflationary times are inevitable, then market timing will work wonders.
Are you poor? Good news!! You get some more free shit from California. That’s right moochers and losers, you too can own a brand new shiny electric vehicle for a super low price! To those of you who get up every morning, go to work and pay taxes….sorry, this deal is not available. You not only get to pay taxes, you also have to pay full freight for you cars.
https://www.sfchronicle.com/bayarea/article/New-law-intends-to-put-more-low-income-California-13242718.php
Good grief. More income distribution by Commiefornia’s communist Democrats. Also it’s no surprise that the legislation was sponsored by Democratic state Sen. Ricardo Lara who is a La Raza racist and brown supremacist.
Want to sell houses to millennials?
Lower prices by 30, 40, 50 percent and we can talk!
Inventory is on the rise, sales are way down. Just a matter of time….tick tock
https://www.zerohedge.com/news/2018-09-20/existing-home-sales-lowest-30-months-inventories-rise-first-time-3-years
Because when home prices fall by 55% -70%, you’ll be the only buyer in the market. You’ll have dozens of beach houses to choose from, all at 70% discounts. Realtors will be lining up to your door, the one and only buyer in L.A.
Yep, I agree. When the crowd is done buying and the last sucker signed, realtors and sellers start begging. That is correct. Near the bottom, you will be able to buy at least 55% percent below the peak. That is also true for California. We are already past the peak (inflection point). From now on its party time for bears and people who showed patience and frugality.
More examples of L.A. “great weather”: http://www.latimes.com/local/lanow/la-me-smog-streak-20180921-story.html
Southern Californians might remember the summer of 2018 for its sweltering heat waves, record ocean temperatures and destructive wildfires. But it also claimed another distinction: the summer we went nearly three months without a day of clean air.
The region violated federal smog standards for 87 consecutive days, the longest stretch of bad air in at least 20 years, state monitoring data show. The streak is the latest sign that Southern California’s battle against smog is faltering after decades of dramatic improvement.
The ozone pollution spell began June 19 and continued through July and August, with every day exceeding the federal health standard of 70 parts per billion somewhere across Los Angeles, Orange, Riverside and San Bernardino counties.
LA totally sucks. Not just in regards to the weather. It’s almost as crappy as the Bay Area.
A guy from the air quality district was on the radio saying that consecutive days is not a metric they use to judge how bad smog is. Maximum levels is the one they look at the most, and that was worse last year. I remember a day in the late ’70s when I drove up the 605 and saw a brown curtain moving across the valley and the mountains at the San Gabriel canyon; sky brown on one side and blue on the other. I haven’t seen anything like that in years.
SOL, August and September are traditionally the warmest months in socal. Here at the beach, it’s been just about perfect, nothing too extreme this year. Mid 70s and clean air. The can’t be said about the inland areas, but that is part of the premium you pay to live beach close.
I live at the beach. On Ocean Blvd. in Santa Monica.
No, the weather has not been “perfect.” We’ve had very HUMID summers these past few years. Even now, the evenings are HUMID. Didn’t use to be this humid a decade ago.
I like the beach’s overcast June Gloom, which can extend into September. But beach living brings HUMIDITY. I hate that.
I can’t speak for Santa Monica, but the South Bay is been just about perfect the last month. Temps from 70 to 80 with plenty of sunshine. Today was PERFECT, high temp was 70 degrees. It’s normal for the beach to get humid at night.
Like I always say. Please show me a better climate. Thanks in advance.
SOL,
#MeToo, I hate humidity. It’s an old cliche of course about Arizona heat being a dry heat. But it is true. I’ll take 100 degrees and 15% humidity over 80 degrees and 60% humidity all day, and twice on Sunday.
I’m sure some douche will soon come along to tell us how he curled up next to an air purifier outside by the pool with a glass of wine during those three months.
I was just about to write that… damn!
Beautiful news! Music to my ears!
https://www.zerohedge.com/news/2018-09-22/evidence-housing-bubble-bursting-home-sellers-slashing-prices-fastest-rate-over
From a column by Jonathan Lansner in the OC Register, I found this housing affordability table:
https://www.nahb.org/-/media/Sites/NAHB/research/housing-economics/housing-indexes/housing-opportunity-index/20180809/history-by-msa-q218.ashx?la=en&hash=C06A72289C72434064C90C30DA638861AFCC1C47
I’m going to mention oddities that he didn’t mention. In the last 6 years Yuba City (!) went from 92% to 40% affordable. Affordable is where a house could be financed by the average family income. Winston-Salem has hardly changed at all during the same period (~62%). Dover De has gone up and down like a yo yo (small market). Corvallis and Eugene OR are at 53 % and 45% respectively now. Of course SF, LA and OC are awful an are the focus of his column (all < 10). The only other ones under 20 are the Fantastic Sans : San Diego, San Jose, San Luis Obispo, San Rafael, Santa Cruz, Santa Maria/Santa Barbara and Santa Rosa… plus Salinas. I suspect that Monterey must be in the Salinas area. The next one to crack the 20 barrier might well be Vallejo.
The common thread is lots of tech bucks, lots of foreign bucks and lots of poor unskilled immigrants flooding in.
Joe,
affordability…..We hit a wall in May. Since then prices have come down. YoY is still up, thats because they level it out. The trend is clear, prices MoM are going down since May. That is during the hot summer season. Foreign cash has signficantly slowed down since china is preventing the cash outflow. Rising interest rates and the trump taxes changes are working in an unfavorable way for prices as well.
Nice article about affordability issues:
https://seattlebubble.com/blog/
“The difference between affordable and actual home prices hit an all-time record in May”
There are three factors in the index: Housing prices, Income and Financing Cost. Any one of these changing can shift the index for a particular location. The last one varies the least from location to location, but can change over time, sometimes quickly. The New York Metro Area had an increase in affordability due to an increase in income since 2014. The problem in LA is that the median income is flat over time but the prices keep rising. The best explanation is that the market is not made up of local wage earners, so the median income is not influencing prices like it does elsewhere. Is it an external event (rentiers, foreign buyers, etc.) that bypasses local income or is it a classic investment bubble? Both may come to abrupt ends, so maybe it doesn’t matter?
We heave heard this many times “incomes dont matter”. Tell that to the builders who are sitting on unsold new homes. 😉 In OC (OC is a great indicator for whats to come) for instance, depressed overall sales activity, Inventories for existing homes actually rose during prime time (spring/summer), over 1000 new homes in OC, thats up~330 homes YoY. a 50% increase to last year. about 17% of all homes are new. Thats also up significantly compared to last year. Builders are going for bigger is better and chase premium prices. On the other hand you have buyers fatigue. This started since financing costs are significantly higher now. (the next douche will tell you, but interest rates were 13% in 1980! yea, but your median house was 47k and inflation was 13%).
All of the above indicates we are at the end of the bull cycle. In california, boom and bust existed as long as you can think back. Looking back in history (old blogs, articles) all cycles have one thing in common, people tell you THIS time is different.
In summary: flat incomes, un-affordable house prices, increasing interest rates and the next recession is on its way. Perfect set up for a housing collapse never seen before.
M. Thanks for the link!
The King County current data is different than was we saw here in the housing crash in that the higher end is slipping more than the lower end. In SoCal during the crash, the inland empire low end got pasted royally while the high end coastal areas were much less impacted. I’m sorry M, but I don’t see the next decline being any different than the last one here. More desirable property will hold up better than the working class areas. We aren’t currently in a recession, so the high end Seattle properties have just run out of well off suckers to bite, but folks with modest means are still getting into a house somewhere in the area.
Our area here seems to have more appeal to non-residents with money which puts a limit on the desirable property crashes. Come the recession (or depression if you prefer), lower income people will be more likely to fall into the trap than the rich who can better weather the storm. If you don’t have to sell, you can ride it out. There are some fabulous McMansions in Rancho Cucamonga that will be available on the cheap in that day.
Joe,
To me this can be summed up by saying there are already cracks in the market without a recession. Boots on the ground know this very well. They see it every day. At this point, all you need to do is sit back and watch it unfolding.
Housing report on SoCal out yesterday. I am sure everyone saw it. Same story. Prices continue to move higher … 7% increase YoY. Less sales. More inventory, but historically, still very low numbers of homes available for sale.
What many people now do is rent their old home out if they can not get the price they want. This is one reason prices continue to rise.
Bottom line is prices will only fall if we hit a decent sized recession. Eventually, that will happen. But, not yet and who knows when … recession could start next week, or next month, or not for 5 years.
Thanks JT, that’s great news. If a decent recession is only 5 years away that gives us lots of time to save even much more money and have lots of cash ready when the market offers buying opportunities again!
many sellers who tried selling their second home for premium prices during the “hot season†are now realizing they can’t find a a buyer who is willing to buy at the peak. That hot season turned out be not so hot. It wasn’t even warm anymore. In fact, talk to any agent or lender. They’ll tell you about a cooling in the market. Some call it shifting or turning. So what do these sellers do? They reduce the price a few percentage points and wait. After a certain amount of time the listing expires or the seller decides to rent it out (again, for premium dollars). Bottom line, the property is empty and cost the seller money. This is dangerous for the seller as he might find himself chasing down the market. More properties for rent is also good for me. Higher supply of properties for rent ensures rents continue to be flat or push lower.
In regards to YoY: did you know you can have three month of declining sales prices and still be up YoY? Did you know YoY can be deceiving because you don’t see the inflection point? What’s an inflection point and why does it matter? Housing data is slow. A lagging indicator. What you are looking for is a trend reversal. We see inventory continue to push higher, houses sitting longer on the market, lower sales and price reductions. All this happened over the last 4 month but is not visible if you just look at YoY price changes. It might take a few more month until you see YoY to be flat or negative. Don’t let YoY fool you.
Where are our bloggers discussing “low†interest rates?. We just got another rate hike and it’s expected to get one more in December. 30y pushing toward 6% soon?
Rates go up, affordability goes bye bye and buyer demand drops off. Can it be more clear?
I do know anecdotal evidence that high end properties in a multi-million $ neighborhood in LA County are not getting the extremely high estimates from appraisals (e.g $4M instead of $5-6 M). I don’t know if this is due to a softening market or exuberance among the appraisers (shills for the RE industry or the loan industry depending on which one you hire).
There are two different important interest rates to follow. The Fed Rate is a short term rate that the Fed charges banks. It is set by the Fed board. The 10 year bond rate is what bidders will bid for 10 year treasuries. The government does NOT control it. I think it is more important in many ways than the Fed rate in that it has a market component. The past week or two it is up, but that also happened last Spring.
“If a decent recession is only 5 years away that gives us lots of time to save even much more money and have lots of cash ready when the market offers buying opportunities again!”
Who is us in this case. The small percentage of people who have the ability or discipline to save money. The VAST majority of people couldn’t save a dime if their lives depended on it. Hate to break it to you Millie, but those savers likely already own properties and will be scooping up more when the time comes. Be careful what you wish for…
Blankfein,
I couldn’t agree more. Most Americans don’t save, they consume and go into debt.
I will buy when the market crashes and I am already in the position to buy a nice house now. But I am in no rush and can wait until the market offers buying opportunity (half of what the prices are now).
I don’t understand your last sentence. Why should I be careful what to wish for? What you describe is exactly what I wish for.
Right on the money as usual jt. Barring a recession, housing prices will remain high. Socal housing has a huge supply/demand imbalance. Add factors such as Prop 13, draconian building codes and you have what you are seeing today. I see more and more homes for rent signs. Where are these home owners going? They are likely buying another socal home. Those rentals homes will not see the market for a long time. Homes that rented for $2800/month 5 years ago are now going for $4000/month. I have anecdotal evidence of renters in beach close large apartment complexes seeing huge rent increases (6% plus).
Buy a home when you can afford it and plan on owning for the long term. Anything else is just gambling and market timing. We’ve had the most qualified buyers EVER in the last decade. Maybe Millie will be shown correct; however, I highly doubt we will see anything close to a 50 to 70% decline. If we do, every home will be bought up by investors. Be careful what you wish for…
Blank fein,
Rents going up. Lol
Most qualified buyers ever. Lol
Thanks, that was funny. I hope you stick around the next few months.
Jonathan Lansner’s column in today’s OC register says “Analyst sees new cracks as home sellers rush to sell”. In the four county area (LAC, OC, RC & SBC) all have an increase of listings and an increased time on the market. The four county average number of homes for sale (not including new houses) is up 22%. The new home inventory as we all know is at a 6 year high. However, payrolls are up in the last twelve months by almost 2%. My market-timing acquaintance had better get it in the wind with the sale of that house they want to transfer the proceeds from to a coastal property.
Sexy news from Seattle
https://seattlebubble.com/blog/
Sales are way down! Inventory is up significantly!
We can only hope that the trend catches on here in socal. If you look at the seattle suburban area on Zillow, there are massive price cuts being done to try to sell homes… the numbers are staggering and the zillow estimates are so far off (much higher) than the actual sales prices.
I came across this thread and in reading the comments I was so aggravated that I felt like I had to say something. While I understand why it might be important to have prop 13 protection for a person’s primary residence, I do not understand how it is either equitable or sensible to offer tax protection to those who own rental properties. I believe that removing prop 13 tax protection for investment properties would fix so many of the problems we have here in California. Some may think that this move wouldn’t have much of an impact—I would disagree. I encourage anyone who is interested to do a Zillow search for rentals in any of the costal cities in Southern California to see for themselves. If you take Laguna Beach, for example. In Laguna Beach alone, there are currently 273 units for rent.
And this isn’t even a fraction of the total number of investment properties in Laguna…many aren’t listed on Zillow. And furthermore, the time of year isn’t a very busy month for rentals so the actual number of rental units is likely to be 5-6 times more than that. Now, feel free to search any of the addresses. Every once in a while you’ll find a rental that was purchased in the last 15 years, but very often, the home’s last sale was so long ago that the data isn’t even available. Any property that was purchased back in the 60’s 70’s or 80’s (or sometimes even earlier!) is paying next to NOTHING in property taxes. And they pay those absurdly low property taxes even if the property is a home that was split up into 5 units and even if multiple generations have been raking in the cash from renter after renter over the last 40 years. And in the meantime, the person who wants to buy a home in Laguna Beach today would pay a FORTUNE in property taxes.
How does this make sense? Why is this older aristocracy given this massive freebie while the young pay through the nose? And for those of you who have been arguing that the younger generation will benefit too once they become homeowners…they absolutely will not! Unless prop 13 is repealed, the aristocracy has absolutely no reason to ever sell and home ownership will remain out of reach for a large % of Californians.
Pick any example and you’ll see it—don’t take my word for it! Here’s one particular rental: 367 Magnolia…. Its a $6000 a month rental for a 1300 square foot pad.
If you look up this property on Redfin, you’ll see that this is an old home that was split into a duplex…the total square footage is 2628 on a 6000 square foot lot. So for both of the rental units in the duplex, they are earning $12,000 a month. Now this place is a few blocks from the water, so they must be paying a lot in property taxes for this premium lot, right?? In 2017, they paid a grand total of $3,628. Thats 300 bucks a month for a rental that they are earning $12,000 a month on!! THIS IS PROP 13 AT WORK. And this is why you are going to see a HUGE number of wealthy investors fight tooth and nail to protect their privilege under prop 13.
So the property owners rent them out, and they pay next to nothing in property taxes to the schools and the local city service. So what happens? Everything is underfunded and the burden is on the new homeowners to pay. And year after year, there are fewer and fewer who can afford to buy. But the renters who live there…these aren’t ghosts! These are actual people….These are renters who have children who go to the local public school and call 911 in an emergency. So what happens when a state has 40% of its population renting and the property taxes aren’t coming in? Who is paying for the public schools? Who is paying for the parks? The libraries? The answer is that there isn’t enough money to fund the schools. And the aristocracy doesn’t care! Back in the 70’s, CA had some of the best schools in the nation. Their kids got a good education and got into UC San Diego. Now our schools are in the toilet and my kid is in a classroom with 30 students and one teacher.
How does this make any sense at all that someone who owns investment property and is raking in the dough should be protected by prop 13? As long as prop 13 is in place, these owners will likely NEVER sell.
Now—I know what all the property owners will say. They’ll say that they will raise the rent if the state makes them pay their fair share of property taxes. And they’ll say that this, in turn, will hurt the renters. But this is BS for several reasons. First, it’s not as though these owners have been charging rent based on the home’s value from 1985. No way. They’ve been squeezing every penny out of their renters for as long as they can and their profit margins are HUGE. But if they raise their rent, guess what? There are other rentals in the area! And some of these homes were purchased in the last 10-15 years…those owners won’t be raising the rent because their property taxes won’t increase that much. So if the owner of the property on Magnolia loses prop 13 protection and decides to turn over the cost to the renter…the renter will just go elsewhere. So, what is more likely to occur is that the owners are just going to have to deal with a little less pure profit…or they will sell. Which is why the investors will stop at nothing to keep the prop 13 gravy train flowing.
Another reason why these investors won’t raise their rent is because right now, renters in this state are already paying 1/3+ of their income on rent. If they raise the rent, there will be fewer people who are able to afford it. And while for some communities, that won’t have a big impact, for others it will. If owners of investment property in Garden Grove raise the rent, well, the rent is relatively inexpensive—they’ll still be able to find qualified renters. But what if you own investment property in Newport Beach that your tenants pay $6000 a month for? Your tenants are already the top 1% of earners! Who will be able to afford to pay the extra $2000 a month? And the answer is that very few will. So while the investment property owner in garden grove won’t see too much of a hit if he loses his prop 13 protection, the guy in Newport is going to take a beating. Check out the tax history on the homes that recently sold that were originally purchased in the 70’s. This is an excellent example of how this will play out. Many show tax bills of 2000 a year go up to over $27k a year! HAHA!…If you hear my glee at this thought—I apologize. But the investors who rent out these homes have been raking in the dough for DECADES and paying SQUAT. While an investor whose tax bill goes up 2k a year might be able to easily turn the cost over to the tenant, what if your tax bill goes up 20k?
Who the hell is going to pay your rent if you raise it by enough to keep your profits as huge as they are?
I get really frustrated when I hear the over 65 crowd saying that the younger generation can’t save or has a sense of entitlement. That if we were just more frugal, we’d be able to buy a home. I respectfully say-that is BS. The cost of homes today makes it next to impossible for the average, or even above average earner, to buy a nice home in a decent area with decent schools. Case and point— We’ve been looking for homes in Laguna Niguel. Got to chatting with some of the long term residents down there. The people who bought homes there in the 80’s and 90’s weren’t brain surgeons and hedge fund managers. They were teachers, mid-level managers, county employees, and even quite a few blue collar workers like electricians and plumbers!! One very nice public school teacher who was retiring and moving out of state has lived in the same house (very nice 2700 square foot home on a big lot) since the early 1990’s. But who do you think is NOW buying 2700 square foot houses in Laguna Niguel? Teachers??? HA!! Thats a JOKE. Nope, now that same home that used to be “affordable†for a teacher and her blue collar husband is now valued at 1.3 million. The household income is going to have to be $250,000 MINIMUM with 20% saved up to put down. So even very hard working Californians, those with higher education, those who are in the top 15% of earners, those who have saved and have been frugal, are being forced to buy in less desirable areas and raise their families in crappy school districts.
How many of the over 65 prop 13 supporters on this forum are hedge fund managers? How many are surgeons? My guess is that there are very few. In fact, it is more likely that the folks who post on this forum have fairly standard jobs—Karin mentioned that she worked for the transportation department. County employees, teachers, mid-level managers….none of them can afford to live within 15 miles of the coast in today’s market. So please, to the over 65, stop trying to say that it is our sense of entitlement that is making this state unaffordable. This state is unaffordable because the cost of buying or renting a home is OUTRAGEOUS.
And as a further insult to the hard working families of this state, and a fact that very few of the prop 13 cheerleaders like to mention is that prop 13 protection isn’t just afforded to California residents… It is provided to everyone who buys property! Remember how when the market crashed, homes were being swooped up left and right by all-cash foreign investors? Well, now they are renting out those homes to California residents at a premium. In fact, it is the foreign investment that is often credited for the quick rebound in the home prices! In other places in the world, foreign investors are charged an extra tax so that local residents have an advantage in the real estate market.
And before I’m accused of being a socialist, I’d like to say that I do generally believe in capitalism—I do! But many foreign investors that are given prop 13 protection to keep the taxes low on their investments aren’t playing on an even field. Many foreign investors are coming from countries that don’t even enforce basic labor laws. How can Californians compete with that? California small business owners don’t use child labor. They aren’t permitted to have unsafe machinery that rips off people’s fingers and arms. And yet, here we are, competing with foreign investors who run businesses in countries where anything goes and where workers are used up and thrown away.
Seriously—how lucky are you guys that you were able to work for places like the transportation department and afford a home here? How nice it must have been to be a teacher, a city worker or a police officer and be able to buy a 2700 square foot home with a nice yard within 10 miles of the beach?!! Us younger folks get beat up a lot by the older generation who claim that we are simply less disciplined or frugal than they were. Excuse me? How frugal can you be when you are paying 1/3+ of your income on rent? Because thats what people here pay nowadays!! Why do you think you see the long lines for Costco gas? People are so strapped for cash here!
So the neighborhoods that used to offer affordable homes to the teachers, nurses and city employees are no longer affordable to those types of employees. Now, you’ve got to be a hedge fund manager or a surgeon to be within 10 miles of the coast. With all of the real estate locked up in the greedy hands of the aristocracy, the normal people are forced to go inland. Further and further inland. Often spending hours a day commuting.
It is frankly so absurd that it would almost be funny if it weren’t so painful….
In my mind, the simplest and most equitable way to handle prop 13 is to change the law so that it only applies to primary residences. So if you live in it, you get to have the predictability of the limited tax increases offered under prop 13. But if you inherit it, rent it out, or if you are a foreign investor, I have no idea why it would ever make sense to keep the property taxes low.
The California population under 55 has become a state of renters with old landlords who don’t care about the state of the schools because their children were educated before prop 13 ruined the state. Or wealthy heirs who are invested in continuing to skate through on the backs of their tenants and the school children. I pray that someone with some balls will end up in power in this state and end this ridiculous situation.
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