patrick.net

Patrick says

https://rudy.substack.com/p/it-was-the-zero-percent-era-that

This is good news. Its should be temporary. But I heard on radio that NY Fed not ready for next rate hike (as we are approaching elections ;) Unfortunately inflation will not bring down much of home prices, rents, stocks!

Around 1999 rent inflation started to increase at a faster pace than CPI. I wonder why this is as perhaps illegal immigration was not factored in the Census data enough to cause an increase in housing units. Granted a lot of illegal immigrants likely live in crowded living conditions like 3 people to a room.

Notice how rent did not increase from around 2008 to 2012 during the housing bust.

Blue says

Big_Johnson says

The day a renter buys his first house in CA is the day he/she will love prop 13.

Same day he/she becomes a parasite on the rest of the state - how is this a good thing for others!
https://www.taxfairnessproject.org/

Great site!

How it works everywhere else: Your home is reassessed every so often -- usually 1-4 years. If it has gone up in value, congrats! You are now wealthier. But your taxes go up too to compensate.

How it works in California: Your home's assessed value is frozen at the moment of purchase. Even if it skyrockets in value, it will not get reassessed as long as you own it.

The upshot: The houses that have grown in value the most - making their owners millionaires just by the virtue of happening to buy a home in the right neighborhood - also get the largest subsidies. People trying to buy their first homes, laden with large mortgages, get no subsidy.

‍

PAID FOR BY YOUR KID'S EDUCATION
Why does this matter? Property tax pays for one very important thing: K-12 education. In most jurisdictions a minimum of 40% goes toward education.

In other words: This subsidy, primarily benefiting wealthy homeowners, is paid for with lower teacher salaries, larger classroom sizes, and deteriorating facilities.

(Read more on Prop 13's impact on education)

‍

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

CONSERVATIVES FOR MOAR TAXES!!!

The only more ironic thing is PEOPLE OF IRISH/POLISH ORIGIN FOR THE SUCCESS OF IMPERIAL LANDGRAB WITH SOME GENOCIDE ON THE SIDE.

🤡

https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

See above. Its about tax burden as far as state and county or city. New York is ranked 1 and California is 12. Florida is 46.

California ranked at 12 should have enough money for the public schools (K-12). Where is the money going ? To the pensions of retired state workers ?

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Just ask yourself: do you know anyone who hates the idea of owning?
Not in America, but in Scandinavian countres.....is not what society expect. "Own nothing be happy" is the way to go. Let's have a beer!

Patrick says

man palo alto is a bad example. it’s where all ultra rich self centered techies live with too much easy money for their own good. all they do there is make too much, spend it on drugs, and expensive housing.

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

GNL says

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

california is always ready for more taxes, all in the name of fairness and equity. today it’s businesses, tomorrow it’ll be home owners.

My wife and I took a stroll in the bluff above Capitola around the jewel box. You can pretty easily see the renovated sugar shacks (Post WWII vet bungalows 800 to 1200 sq ft) with added stories, and the houses that are intergenerational hand me downs (negligible prop. 13 taxes, just held onto because why not, only visited once in a while.)

They silicon valley oligarch houses are new multistory add ons with fresh paint and all the cutsey California appurtenances. The inter generational inheritors right next door have unkempt yards, dirty windows, crappy drapes, old roofs etc. The inter generational inheritors are a lot more common away from the beach.

The winter salt and sand blasting makes them deteriorate pretty quickly if on an exposed bluff or right on the water. There are always several that are being renovated at any particular moment. A couple we knew in Aptos painted their house every three or four years when they were in it.

The house down the street listed for $1.2 million. 3,300 sq. ft. Maryland DC bedroom community.

It went pending immediately after the first open house viewing.

The DMV isn't hurting at all. Transactions are low but the economic activity seems high. I live less than a mile from the CIA. Nobody hurts around here...it seems.

FortwayeAsFuckJoeBiden says

GNL says

Patrick says

REFORM IS ON ITS WAY
The good news is that after 4 decades momentum is building to overturn Proposition 13.

Prop 15 is an important first step to reforming property taxation in California. It essentially unravels the subsidies for large commercial properties. You should vote "Yes" on Prop 15.

It sure would be a bitch of a thing if grandfathering included in the bill.

california is always ready for more taxes, all in the name of fairness and equity. today it’s businesses, tomorrow it’ll be home owners.

Exactly, this modification to Prop 13 is not something we should support. At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments without first placing limitations on what they can do with our tax dollars. Blank checks for OPM is giving drunks drinks at this point.

ForcedTQ says

At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments

I haven't heard anyone say they want taxes to go up by eliminating prop 13. They want to be taxed evenly and fairly compared to others. That doesn't have to mean more total taxes to the California government.

GNL says

ForcedTQ says

At no time should we encourage a measure that is going to increase the tax revenue to the State / local governments

I haven't heard anyone say they want taxes to go up but eliminating prop 13. They want to be taxed evenly and fairly compared to others. That doesn't mean more total taxes to the California government.

I should say thank you for your understanding. Yes. It really is that simple. LOL you were able to understand is because, I suspect you live outside of CA.

But Prop 13 parasites come up and add all sorts of confusion and keeping all slaves in line to pay high and uneven taxes rates and far less tax rates for for the rich. Poor and middle class end up paying much higher tax rates of 10x, 100x rates compare to rich!

The more I look at it, the newly proposed propositions to partial 'repeal' of prop 13 are suspicious. Like Prop 15 (failed in 2020) etc. they do not send a message to even it out but instead send a indirect message "Tax Hike" by saying, how to spend that 'extra money' on some BS programs!!
So folks behind "repeal" must be supporters of Prop 13!! what a scam.
Btw, Prop 13 became like a cancer to CA for a long time, now it has so many derivative propositions over the decades.

The one thing that can truly be believed is that dishonesty is running rampant in America.

People only care about what's good for them. Fairness and truth are redheaded step children.

Blue says

LOL you were able to understand is because, I suspect you live outside of CA.

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

GNL says

Blue says

LOL you were able to understand is because, I suspect you live outside of CA.

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

The best part of "conservatives" braying about some people not paying "enough" taxes is the argument that it is "starving public schools". The same "conservatives" who recently argued that children should be taken OUT of public schools and homeschooled (or at least sent to private schools).

Ah, the consistency, the principles!

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

GNL says

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

And that's news? People are trying right a wrong. You're against righting wrongs? Or am I reading you incorrectly?

There isn't much I can do about it. I don't live in or own property in California.

1337irr says

Life isn't fair. Prop 13 like any other law, has unintended consequences that have yet to be fully seen.

Yep.

"It would be like a death tax"

No, it's not a death tax to restore a property tax rate for the heirs. They didn't buy the house with their money decades ago and lock in the tax rate. They just got the house transferred to them as a new owner, and are not entitled to the rate locked in by the former owner.

This is really silly. In Florida we have the homestead exemption which is a better method. If you get the house via inheritance, but don't live there, you can't claim the exemption, duh.

Because most of the people inheriting places are living somewhere else and planning to rent them out. But want to keep the rate as if it's their one and only residence they brought with their own money decades ago.

GNL says

How the F is it fair that someone can inherit a tax subsidy? That's fucking insane.

This is Prop 58, not Prop 13. Patrick’s rent has been subsidized by Prop 13 b/c the current owner has a low property tax basis and doesn’t feel the need to raise his rent close to market.

There are more, but I won’t get into it. People will believe whatever they want to believe.

AmericanKulak says

If you get the house via inheritance, but don't live there, you can't claim the exemption

This is how Prop 13 works now.
On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their own primary residence.

EBGuy says

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19

What would happen if the tax benefits of this and Prop 13 were stopped ?

It would cause a lot of owners to sell their homes and it would cause a housing price crash ?

,

ad says

.

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.

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

Broadway_Sam says

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

You're looking for market timing gains. No one here can tell you. Housing even with high interest rates is still on solid ground. If you're in LA, or an inflated market like Austin, TX I'd be somewhat reluctant to buy. 2008 or whatever official year is not in the cards in my opinion. 30% is a lot and there's no inventory. Prices during the bust were increasing with 7-9 months worth of inventory. We're not remotely near that in most markets.

And yes, YOY sales are going to decrease this fall. It doesn't matter if no new inventory hits the market. Sales numbers are a god awful metric. If there aren't houses for sale, it's hard for prices to drop. And the only drops will because people testing the market with shit homes that weren't gonna sell anyway. Banks aren't going to foreclose if people hit a rough patch. No excuse for that right now really. You might have to wait a while for 30%.

I just heard on the radio this morning that home prices in the DMV are up 5% yoy.

Broadway_Sam says

I bought at 2.5% and my home appreciated 350k so my plan is to save as much cash for the next bubble when houses are down 30%. When do you think they will drop again?

I think they are going to hold steady or stay about 10% to 15% below peak price (set in early 2022) for the next couple of years.

If the Fed Funds rate drops (along with the 30 year mortgage rate) its because of a recession which means less demand for housing.

I have about 50% in "investment grade" bonds and 50% in index funds (i.e., total stock market index, etc.) for my IRA's. I figure when interest rates go down that my bond portion will fare well enough to compensate some for any drop in the index funds.

.

GNL says

Correct. I do understand wanting to allow the older set to grow old in their homes. I am sensitive to that in California the same as the rest of the country. I think Patrick has posted some great solutions.

Here in Santa Clara County we already have a solution to that. Seniors can opt to have the county put a lien on their home in the amount of the taxes owed. The only people whose taxes would suddenly skyrocket (without Prop 13) are the ones whos house values also skyrocketed, so they will have plenty of equity assuming they used their house for shelter not as an ATM.

I think a better solution to unexpected massive tax bill increases is to asses each property evenly and then set the rate such that the amount of total taxes collected is at a 2% increase from the previous year. So, if everyone's house suddenly is assessed at 2x the amount one year, then the tax rate would be cut in half. That would hold property taxes down for everyone instead of the current uneven situation where the people having multi-million dollar windfall real estate gains get a huge subsidy and the young people stretching to buy their first house get hit with the largest tax bill.

zzyzzx says

Should read: Making 2k a month passive income while paying $5k/month interest on the mortgage and losing $5k/month equity.

ad says

What would happen if the tax benefits of this and Prop 13 were stopped ?

It would cause a lot of owners to sell their homes and it would cause a housing price crash ?

That ain't happening in my lifetime (the residential side). However, the Prop 13 commercial reform could come to pass. It was defeated (52% No) in November, 2020. I could definitely see this coming up for another vote in the future (especially when the state coffers run dry). Hard to know what would happen, but it's affects would be far reaching...

EBGuy says

On November 3, 2020, California voters approved Proposition 19, the Home Protection for Seniors, Severely Disabled, Families and Victims of Wildfire or Natural Disasters Act. Proposition 19 is a constitutional amendment that limits people who inherit family properties from keeping the low property tax base unless they use the home as their own primary residence.

GREAT!

(Although, they shouldn't get the same rate, just whatever rate ANY homeowner should get for a primary residence)

Considering Prop 19 above, why the continued hatred of limiting property tax increases on purchaser/owner occupied homes?

Like I said before, government spending needs to be reigned in because they are all acting like drunken fools. There is no way in hell I want them to get additional tax revenue.

EBGuy says

However, the Prop 13 commercial reform could come to pass. It was defeated (52% No) in November, 2020.

2020_California_Proposition_15 failed is because, there was obviously from super rich sponsored a repeated commercials on TV showing a women holding a baby says that she will be on street if it passes!!
Anyone see that commercial will definitely vote 'No' as most people are either sensitive, dumb or panic and can not think whether it was really true or not.
What a scam, reducing tax fat subsidies on Large Commercial Properties anything to do with a women holding a baby!!
At this stage, I believe 1978 Prop 13 spread like a cancer in CA with various form of propositions over the decades.
Proposition 19 is full of loopholes with back to Prop 13 again after property transfer if any property ever go on that route! There are so many ways to avoid Prop 19!
1978 Prop 13 blown up right after it passed in a year or two! Then they introduced "Mello-Roos taxes" part of the Prop 13 stone soup as "workaround"!
The only down side ;) of a true repeal as if you never heard Prop 13 are, new or young people do not pay hidden tax to existing property holders in the form of "high home prices". Fellow Americans from other states can move in or out without much financial burden just like most of the states etc. Otherwise it is financially isolated (apart from divergent culturally) and attract immigrants or illegals only to get even more divergent. Not good for US in the long run.
https://en.wikipedia.org/wiki/2020_California_Proposition_15
https://en.wikipedia.org/wiki/2020_California_Proposition_19
https://www.legalzoom.com/articles/what-is-mello-roos-the-ultimate-guide-to-understanding-this-california-tax-law

ForcedTQ says

Considering Prop 19 above, why the continued hatred of limiting property tax increases on purchaser/owner occupied homes?

Like I said before, government spending needs to be reigned in because they are all acting like drunken fools. There is no way in hell I want them to get additional tax revenue.

California doesn’t have revenue problem. It has spending problem. The solution is to give the state more tax revenues?

I’m a business owner. I see the solution differently. More tax revenues will not solve the California spending crisis.

I don’t know what drives the people who want to repeal Prop 13. If a bunch of immigrants, who could make it in this country, starting from ground zero and without speaking the language, what’s stopping the folks who are born here and speak the native language? It never stops amaze me what kind of stuff people come up with.