<p>I thought the state of Washington had some kimd of control on how much property taxes could be raised. I guess not.</p>
<p>Edit…
<a href=“http://dor.wa.gov/docs/pubs/prop_tax/homeown.pdf”>http://dor.wa.gov/docs/pubs/prop_tax/homeown.pdf</a></p>
<p>Property taxes do not necessarily increase with assessed value.
Tax rates matter. </p>
<p>End of page 1 beginning of page 2.</p>
<p>Dstark,</p>
<p>Out of curiosity, what impact would this have on REIT stocks, if any?</p>
<p>Prices are up in Austin, but seem like a bargain compared to the prices I see quoted here! Cool central city areas 450,000 for 2000sq ft.; in my lovely suburban green-belt area, 360,000 for 2200 sq ft. 3 bedroom, upscale house.</p>
<p>“Property taxes do not necessarily increase with assessed value.
Tax rates matter”</p>
<p>Yeah, I know they have a formula. We discovered that it did little good when our property values declined, because everyone’s declined. Property taxes stayed the same. They still need the same amount of money, so they will ration out the costs accordingly. But the problem can be if they decided in our community that the average home was only worth 5% more, but ours increased 18%. I have no idea what others increased to, but I don’t think it was that much.</p>
<p>New buyers can’t get financing. All the movement is in the upward buyers with institutional buyers coming in at the lower levels and buying up the properties and renting them out. There’s some upward price pressure at the lower levels, but most of the action is not in the entry level. Entry level “buyers” don’t really exist in any meaningful way in the current economy. That’s macro. There might be local areas where this is not the case, but I haven’t seen any in any sustained enough way to believe it as a trend. Not yet.</p>
<p>Things are bubbling up too much here in Ohio in my opinion. Its almost like another bubble is being created. We have bidding wars in my neighborhood, and it shouldnt be that way. Houses seem to be overpriced in my area.</p>
<p>At least around here, that’s the institutional buyers at the lower levels, driving price. But, most of the action is in the upper-mid and uppper levels.</p>
<p>@Busdriver11 can you appeal? </p>
<p>Real estate is different than stock market. People don’t usually day trade on real estate and they don’t even buy and sell within a year. Most people do hold for around 5 years, so the closing costs can be amortized over that period. I would say 10% appreciation in the real estate market is pretty impressive.</p>
<p>With the really low interest rates I can see some people buying a home and being “stuck” because the rates go up. We have 3 young people in my office buying homes with 3% mortgages. If rates return to say 7-8% they may not want to buy another home and give up that low rate.</p>
<p>We sold our 2+2, 1260 sq foot condo in Chicago’s River North in June. In 2009 we paid $367000 and we sold it for 402,000. We sold it furnished. We bought it that way. With the selling costs and upgrades and the tax benefits we figure we made between $10-15,000. It sold in six days. It was a life style investment not a financial investment so the profit was unexpected but welcomed. We are selling our Madison condo at significantly higher then we paid for it. If we get that price we will break even. </p>
<p>Our house went way up too busdriver.
Its assessed more than the brick house where my grandparents lived for 50 yrs in Magnolia.
That does not make sense to me.
$&^*%# hipsters!</p>
<p>"@Busdriver11 can you appeal? "</p>
<p>I can, but I doubt I’ll have any luck. I appealed a condo awhile ago, with a very valid case, and they slapped it down pretty quick. I wouldn’t be surprised if they decided to raise the value, just because they can.</p>
<p>Busdriver11, they did not reassess your house for 18 percent gains while reassessing the rest of the neighborhood with 5 percent gains. Your neighborhood may actually have 18 percent gains. Try hard not to be paranoid. Ask a couple of neighbors…</p>
<p>Cobrat, I wish I knew how reits will be affected under various scenarios but I dont. Since the fed started talking about ending quantitative easing…longer term rates have plummeted. Thatt is a little surprising. Maybe people think the ending of qe will mean less growth in the economy going forward. Maybe the fact that Europe’s economy is not growing and interest rates are declining there is affecting our interest rates. Interest rates affect reits so I dont know what is happening.</p>
<p>I dont know what is going on in SF and surrounding areas and I live here. Why are so many companies funded with the odds so low of profitability? Robin Williams said spending money on cocaine was God’s way of saying you have too much money. Now, maybe the funding of all these start ups is God’s way of saying the funders have too much money.</p>
<p>All these new companies are not going to be the next Facebook. If these companies were going to be Facebook, they would be Facebook. (i love that similar line in the movie, The Social Network). :)</p>
<p>Anxiousmom, my daughter may move to Austin some day. I would feel bad but Austin’s prices look more reasonable.</p>
<p>My 2 cents:</p>
<ol>
<li><p>Some markets are artificial though how that ends is unclear. The artificial markets are dominated by cash buyers mostly looking to rent or renovate and sell. Supply in these areas is constricted by investor interest. And in some of those areas, it’s surprising to see how many homes are still owned by banks. I worry about any area where there’s a ton of investors, but the investors are displacing other demand so …?</p></li>
<li><p>Some areas are constrained by the falloff in housing construction. They weren’t over-built or not as over-built but nothing much was constructed after the financial crisis hit. If you look at rates of household formation - which actually went negative in some areas! - you see the annual need for new housing. We are well below that level in some places.</p></li>
<li><p>Some areas seem to be what I call weathifying. We see that in places like SF, as tech housing has moved into the city. Brooklyn is another: when PSF hits $1500 in Manhattan, you see lots of condos and renovations in Brooklyn. The underlying reasons differ from SF: more money flows into Manhattan from overseas and that is enough to displace one group, which displaces another group, which influences another group, etc. </p></li>
</ol>
<p>And I would say where I live - Boston - is seeing a combination of a near shutdown in construction holding back demand plus continued gentrification (even in areas already “rich”) plus changes in housing patterns, with people wanting more of an urban lifestyle instead of the house an hour away. I’m seeing prices in my neighborhood for gut jobs - meaning the only thing old in the house is the exterior design - of relatively large places run from $570-~$700 PSF. It’s strange to see 4000 sf+ sell for $600 PSF, etc. Smaller places sell for more. Prices downtown, even in the transitional neighborhoods right downtown, are much, much higher all of a sudden. About 4 years ago, it was a real reach to think new construction in my neighborhood could hit $600PSF. That’s in the rear view. </p>
<p>$700 psf for construction? Ouch!</p>
<p>We bought our house for x in 1999. In 2007 it would have sold for ca. 2.7x. in 2007. Best guess now is that we are up to about 2.3x. Houses in good shape with up-to-date kitchens are selling like hotcakes in our neighborhood. I’ve also never been busier with renovations. </p>
<p>I’m working on one addition where cost will be around $275 square foot and another one which is going to be at least twice that. I don’t know what brand new construction costs there’s so little of it.</p>
<p>I live in a small town in central MA. Almost all the properties in our town have wells, septics, no sidewalks, no trash pick-up but a transfer station (which means you haul your own trash there), and no public transportation. Despite the minimal town services the school system is one of the top ranked in the state and 99% of each high school class goes to college. Because of the strong school system, there is a demand for homes and the home prices reflect that. Prices in the town have always been higher than surrounding towns. </p>
<p>One of my close friends is a realtor who says that the market has picked up tremendously. She sold 4 houses in the last six months and has 2 under agreement. In 2008, she sold 3 houses that year. My neighbor is an architect and she’s says she has more business than she can handle. All of this is anecdotal, but it seems to me that the housing market in my area is picking up.</p>
<p>
</p>
<p><puts hand=“” up,=“” waves=“” it=“”>Oooh, oooh, Mr. Dstark, pick me, I know the answer to that one! </puts></p>
<p>Because there’s nowhere better to put the money. Too much money, not enough places to invest it.</p>
<p>“Busdriver11, they did not reassess your house for 18 percent gains while reassessing the rest of the neighborhood with 5 percent gains. Your neighborhood may actually have 18 percent gains. Try hard not to be paranoid. Ask a couple of neighbors”</p>
<p>It doesn’t really matter what a couple of my neighbors say. A couple is too low a statistical number to make any difference. A real estate website I looked at said that houses in my town appreciated by 7.2% per square foot over the last year. I’m not sure what the city will say, but I sincerely doubt that anything in our area had such a high appreciation rate. I think we are screwed because a house very near to us and very similar to ours sold for a high price. I don’t know that they will increase the entire cities real estate prices over 18% because of this one house, but it could have been the one that affected ours. I guess we’ll see if our taxes jump 3-4K next year, without a bunch of additional levies.</p>
<p>You know what they say. You really aren’t paranoid is everyone actually IS trying to tax you to death.</p>