The artificial low housing sales volume increases sales price for the small set of buyers that have inelastic demand for housing(i.e. must move for a new job etc.). These people must buy and pay the price. Taxing authorities read this as a giant increase in all house values and in non-prop 13 states, raise or double your property taxes. Just like what happened in 2006 to 2008. A 350k house valued at 600k pays double the property tax and then the value drops back to 300k. The home owner has lost $10,000 to $50,000 in equity from over paying taxes.
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The artificial low housing sales volume increases sales price for the small set of buyers that have inelastic demand for housing(i.e. must move for a new job etc.). These people must buy and pay the price. Taxing authorities read this as a giant increase in all house values and in non-prop 13 states, raise or double your property taxes. Just like what happened in 2006 to 2008. A 350k house valued at 600k pays double the property tax and then the value drops back to 300k. The home owner has lost $10,000 to $50,000 in equity from over paying taxes.
Doug
#housing