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if land tax is up, farmers go out of business.
The only way a farmer isn't making a shit load of money is if they've leveraged the land to buy a lifestyle. My kids are friends with two prominent farmers here in IL. They aren't remotely poor or struggling. Property taxes could triple and they'll still be rich. Farmers cry poor a lot. Most are millionaires.
if land tax is up, farmers go out of business
“In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.“ - Impressive.
So Georgism is like Prop13 on steroids?
Under Georgism, your land value tax adjusts with the value of the land.
This is very different than Prop 13, which is an attempt to never have any significant property tax increase.
Eman says
“In July, the sales pace of new homes climbed 4.4% compared to June, reaching a seasonally adjusted annual rate of 714,000. On a year-over-year basis, new home sales were up 31.5%.“ - Impressive.
Median house price peaked at $480,000 and has dropped to $416,000 by end of April 2023, so it has dropped about 14%.
It likely has dropped present day below $416,000.
This article says end of July 2023 the price was $407,000 : https://www.msn.com/en-us/money/realestate/home-prices-spike-to-over-400-000-after-5-months-of-declines/ar-AA1g2ngf
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The fact the sales rebounded after 5 months of slump suggests the market is likely close to an equilibrium.
I see equilibrium at the current median price for the USA when the rate drops from 7% and steadies between 5 and 5.5%.
Or when/if prices drop to...?
I think the Fed wants to see housing price grow at a much lower rate than income.
The Fed doesn’t get to decide. If they hike rates where housing is so expensive to finance who are they hurting? Such a one dimensional thinking.
ad,
It doesn’t impact me. I’m always a buyer/seller for the right price. They’re hurting the consumers more than anything.
The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?
In theory, it’s easy. Reality is so different. I’ve had this discussion with my Federal Reserve buddy frequently. Even he doesn’t have an answer for it. Hope is the magic word for them
Under Georgism, your land value tax adjusts with the value of the land.
This is very different than Prop 13, which is an attempt to never have any significant property tax increase.
The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?
So basically you go from a legally codified and strictly limited tax increases back to basically bending down, grabbing your ankles and letting the newsoms of this world jack up your property taxes as high as they want to and need to finance their frivolous spending? How is it better? Sounds like the system Californians has rebelled against in the first place.
I love America and would hate to see it become a 3rd world country. I read that 25% of all homes are owned by corporations? True?
It’s not only my imagination of the buy/rent disparity ratio. I guess it’s NOT only happening in the Bay Area, but almost across the country.
ad,
It doesn’t impact me. I’m always a buyer/seller for the right price. They’re hurting the consumers more than anything.
The huge rent/buy ratio disparity in our market makes it hard for people to buy so they rent. This is why we’ve been getting record rents in our market. It’s just much cheaper to rent than to buy. How will the Fed bring it to disparity or 4% annual appreciation target?
In theory, it’s easy. Reality is so different. I’ve had this discussion with my Federal Reserve buddy frequently. Even he doesn’t have an answer for it. Hope is the magic word for them
How did Canada housing prices become so disconnected with all other countries since the Great Recession?
The Fed screwed up again by leaving the Fed fund rate too low for too long. Now, they’re trying to fix it by hiking rates aggressively, and here we are.
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https://finance.yahoo.com/news/pimco-kiesel-called-housing-top-160339396.html?source=patrick.net
Bond manager Mark Kiesel sold his California home in 2006, when he presciently predicted the housing bubble would pop. He bought again in 2012, after U.S. prices fell more than 30% and found a floor.
Now, after a record surge in prices, Kiesel says the time to sell is once again at hand.