With the real estate market continuously going up and up, how are people going to be able to afford houses in the future? The cost of living will keep going up, so will everything else. I feel really sorry for the people who have retired and their property value keeps sky rocketing, making it almost impossible to afford property taxes!

This thread is definitely open for discussion. What do you think?

 

My mom's house is in S.F.

She has Prop. 13 taxes.

Her taxes are based on 1977-78 property values.

Otherwise she would have been forced to sell.

Before Prop. 13, a lot of the retired elderly were forced to sell their homes because they couldn't afford to pay the taxes.

http://en.wikipedia.org/wiki/California_Proposition_13_(1978)

I won't even say what/when she paid for the house and what it's worth now.

It's sick, in a good way.

 

We've got a townhouse that's definitely appreciated in value. We bought for 192, and figure we could sell for about 250. There's another tounhouse in our complex asking 320. WHAT?!?

Anyway, we got the townhouse because it's what the wife was looking for. We could have gotten a different one for 150, but it needed work... We all know how that goes. Same amount we put into ours, put into that instead, we'd be sitting pretty.

Now, if we sell, we'd be in the same boat as before we bought. Not much out there in our price range. Even if we made a profit, and bought the house we really want, our mortgage payment would double.

So, it looks like we're stuck here for a few years. I'm trying to convince my wife that now is not the time to sell, because there just isn't enough equity built up to keep our profit.

Lots of people try to buy and flip properties, but after a while, it just drives market prices up. What I want to do is get a nice cheap place, clean it up a bit, and rent it out rather than flip it. If we're lucky, it'll pay for itself. What we really should do, is get that nice cheap place, and rent it to my wife's parents. That way, they can clean it up, pay for upgrades themselves, and pay us rent. Then, they wouldn't have to worry about moving any more, and we'd have some retirement income. We want to do the same with my wife's sister.

 

Feel sorry for those that assume a continious increase in value in order to justify some rediculous debt loads.
Dono

 

Amen Dono. Some of us are old enough to remember what the ugly side of the RE market can look like. I'm not expecting a crash-and-burn like the stock market did 5 years ago, but it's important to remember that RE has appreciated, on average, a little over 3% annually since 1900. Price increases in the double digits just aren't sustainable.... and values can go down sometimes too.

 

Houston in the late 80s. Los Angeles in the early 90s. Just read an article that was talking that nation wide the market doesn't go down. If it does the owners usually just hold on and wait. But it did say that local markets like those above definitely can drop. Houston and LA were both instances of jobs that dried up. Many people laid off an no new jobs to move to. When they couldn't make the payments, many people just walked away.

 

There are always exceptions to the rules.

Here, the market has somewhat slowed down, not much though.

I can only recall the property values here lost about 10-15 % once, from the early seventies to present, but came roaring back and haven't seen a decline in prop values since.

It has to slow down.

There are going to be a lot more foreclousures in the future, due to creative financing.

 

Bought my first house in '82. 16.5% interest!!! The builder 'bought it down' to 14.5% (gee thanks.) That was on a house that cost $56,000.
I sold it in 1988 for $74,000 and change and money cost 9.5% to borrow.

A $160,000 house in 1988 is now $400 G's, PLUS!
I can't even LOOK at a house around here, now. Land is outta sight!

Wyoming is looking better and better.

(Hmmmmmmmmmmmmmmm. I wonder if my daughter will 'put me up' at her proposed new digs in San Antonio?!?!?!)
Hey, I said that I only want to live long enough to be a problem to my children.
Ha!

 

I bought my house not quiet two years ago for $98,000. Its worth over 200 now. But everyone is saying the market in my area is gonna come crashing down.

 

I bought my house in 93 for 85k, in 02 when I thought of selling it was valued at only 145k, now I could get ay least 385k, thats for a 50 year old Cape Cod w'1300 sq ft. I have been following the market since July, since I'm again thinking of buying something bigger with some land within the next year. Recently, last month or so, have been seeing more homes being reduced in price in the next price range, those from 450-550k, in that price range prices are dropping an average of 45-70k, houses in my neighborhood, considered first time homes, have been dropping between 10-25K.
So at least in the Manassas VA area prices are starting to retreat somewhat, they really had to as we were averaging 24% increases over the last several years.

Don't even what to get into how much property taxes have risen in that same time period, althought the city I live in does offer a reduced rate for seniors not sure how much it is thought.

 

What's happening around here (West Central FL) is that houses have gone out of reach for the average resident. I could not afford my own house if I was starting out; at my salary, I'd have to scrape to afford one of the lowest priced houses, currently about 150K. The local government is talking about passing laws that builders would have to build a percentage of affordable housing. I'm not sure how that would work, with a tiny (7500 sq. ft) building lot going for $125K in most areas. What are they gonna do- give the house away? I'm currently shopping in rural Georgia for my retirement land- probably 5-10 acres to put a house on. At $5K an acre, it seems like a steal.

 

Okay, what's this house worth in YOUR area, and what would your taxes run:
1500 sq. ft ranch, built in 1985. 3-bedroom (3 walk-in closets)/ 2 bath, 3-car attached garage. Formal dining room/ separate living room w/ fireplace. Fully-finished basement (drywall, carpeted, 8-foot ceilings), 16x32 in-ground pool w/ summer house. Sits on 3 rural acres w/ municipal water and natural gas, 20 minutes from city w/ approx. 200,000 population.

 

3 ACRES- $600,000- $700,000
HOUSE- $150,000 (ROUGHLY $100/FT RESALE)
POOL/SUMMER HOUSE- ?? $10,000

$750,000-$800,00. If the property was pretty enough, the house would get bulldozed and something larger built on it- or simply divided into lots. Taxes, based on $750,000, would run about $12,000/yr.

 

If you could find something like that in this area, probably a million plus. The house, on a typical 1/6 acre lot (that's SIX houses to one acre!) would run 350 or so.

 

I think the party is over. Around my area market inventory is WAY up in the past few months and homes are taking a long time to sell. I dont know if sale prices are dropping but the are not going up much for sure. Anyone who bought a house in the last year or so is going to be waiting a long time for appreciation I think.