patrick.net

Al_Sharpton_for_President says

MolotovCocktail says

They shouldn't be selling anyway.

They will have the dreaded negative equity and for how long? If they need to sell, they are screwed.

Which was the case back pre-Boomer/pre-Post War years. Esp when we had gold backed money and thus limits on lending.

Homes were never, ever meant to be (near guaranteed) slot machines. Most people considered breaking even on a house was a pretty damn good deal. They were thus not mortgaged if at all possible. Gold backed money is inherently deflationary so one avoided long term debt.

The land homes were on was another matter.

Now the Demographic Fall Is A Fucking Bitch* Fate Aspect (to reference a popular RPG rules system) is doing what deflationary money used to do. The adjustment is going to be very painful to most...especially given how too many are in total denial. Not just peeps but FIRE^♤, the government, et al.

* Not to be confused with the Fate Aspect called Demographic Collapse Is The Mega Bitch of Mega Bitches. Similar, but unlike the other this is quite terminal. The US at least produced another population bulge called 'Millennials' whose peak savings/investment years will kick in between now and 2035. But after that, we're fucked with the fatal Aspect like Europe, Canada and most of Asia is now.

^♤ Finance, Insurance and R/E. Which we have too much of as a percentage of our economy.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Like all Ponzi schemes it works fine as long as new money is being added into the scheme. The United States has mostly always had a positive savings rate. However, if the savings rate goes negative...well if you have to sell and there are no buyers...the price rapidly drops to zero.

Patrick says

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Imagine Glass-Steagal and an end to the Fed Window as a routine borrowing mechanism.

Banks might have to - GASP - offer modest but solid ROI for CDs in order to make loans.

Patrick says

Misc says
While it is possible for an individual to "Save" money, it is impossible for a society to do so. At the societal level all investment schemes are Ponzi.

I disagree. I can imagine a whole society investing in the stocks of productive businesses and then saving some of the profits.

Or, after WWII, most people (or rather men) who worked for businesses had pensions. These schemes were reasonable because of the financial repression (<2% Treasury rates, 5% mortgages) that persisted until the early 1960's. If you didn't have to worry about inflation, it was easy to set aside money that would pay out over a few decades.

Then came the late 1960's through the 1980's - massive inflation that destroyed pension plans, the savings and loan banks, and the plans of corporations. Boesky et al looted the old school industrial corporations with lots of cash on hand for a rainy day and sold off the carcasses.

It's a globohomo looting free for all. Anything that holds value is criminalized because they can't inflate it away. If you have too much physical cash or gold, you're a terrorist or a drug lord.

The biggest problem today is over-capitalization

If we weren't over-capitalized, the bullshit quant trading algos wouldn't be a thing. Nickel-and-diming from Las Vegas Casinos to Airlines would not be such a thing. It's only possible because there is too much capital chasing too few opportunities.

Hopefully, we have have a two-decade reindustrialization financing that will produce real returns on real investment and offset, if not cancel some, of the effects of the massive Boomer sell-off that will be coming to finance retirement and health problems.

Fears?

Hopes!

Patrick says

Fears?

Hopes!

I am pretty sure I know how Zoomers feel about it:

.

Something has to give.

Hopefully housing costs (rent or mortgage + tax + insurance + HOA fee) go down no more than 10% while household income goes up 4 to 5% a year from 2022 (when home prices generally peaked) to at least 2028.

I just hope housing prices don't crash but you have some correction and relief for the working class.

I do know I saved a lot of money in the Florida panhandle switching from Olympus Insurance to Ovations Insurance (from $2250 to $1650 annual premium) for HO-3 insurance starting this September for a replacement value of $270,000 and 5% deductible for hurricane damage.

I credit that to Ron DaSantis stating he was working over the last 4 years at trying to bring more competition to the property insurance market.

And I did notice on the east end of Panama City Beach that 3 bedroom, +1 car garage townhomes are renting for around $2000, which is same price in 2021.

And my friends in the hospitality and service sector are saying the starting wage is now $16 an hour for retail associate such as at a culinary and spice specialty store at the local strip mall.

.

PanicanDemoralizer says

The biggest problem today is over-capitalization

Still suffering from the big jump in M2 money supply since 2020 ?

Yes, lots of easy money through "finance engineering" and Biden style handouts, and not earned through innovation and productivity.

You mentioned Vegas getting away with nickel and diming, and I even see in Panama City Beach no more charging $400 a night for a 2.5 (out of 5 star) beach condo.

And even with prices coming down quite a bit, the local tourist development council has reported a drop in visitors (and consequently a drop in hotel , motel, and short term rental "bed taxes").

.

MolotovCocktail says

https://wolfstreet.com/2025/08/04/inventories-of-homes-for-sale-surge-in-denver-seattle-phoenix-tucson-portland-las-vegas-salt-lake-city-albuquerque-boise/

MolotovCocktail says

Arkansas is landlocked. So is Nevada. Oklahoma. Utah. Idaho. Kansas. Missouri

Ahem, bro:
Arkansas and Missouri are on the mighty Mississippi River. Lots of cargo shipped on water from their ports to all over the world. Same goes for other (by that definition of yours) states along the Mississippi and Ohio River waterways.

As for that, Oklahoma has a port on the Arkansas River at Catoosa for worldwide freight shipping. My relatives in Oklahoma are mighty proud of their state's status as having a world-wide shipping hub. When I was a kid they took us out there for a tour. Arkansas, Oklahoma, Missouri and others: "coastal" state by your definition.

B.A.C.A.H. says

Ahem, bro:
Arkansas and Missouri are on the mighty Mississippi River. Lots of cargo shipped on water from their ports to all over the world. Same goes for other (by that definition of yours) states along the Mississippi and Ohio River waterways.

As for that, Oklahoma has a port on the Arkansas River at Catoosa for worldwide freight shipping. My relatives in Oklahoma are mighty proud of their state's status as having a world-wide shipping hub. When I was a kid they took us out there for a tour. Arkansas, Oklahoma, Missouri and others: "coastal" state by your definition.

Not according to Wookie's definition.

Patrick says

Fears?

Hopes!

As both landlord and home owner, I absolutely do not care for housing values, I hate that it is constantly inflating, because I see next generations opportunities going away. They'll be forced into debt or to never own anything, that's terrible.

We are in a generational relay race, we need to pass a relay to next generation and that generation needs to not start in debt, but start with opportunities. And I do want housing and life necessities to be affordable to them, to leave a better world for them. I don't think that view is shared among too many, but I know I'm also not alone in that kind of thinking.

Fortwaye says

Patrick says

Fears?

Hopes!

As both landlord and home owner, I absolutely do not care for housing values, I hate that it is constantly inflating, because I see next generations opportunities going away. They'll be forced into debt or to never own anything, that's terrible.

We are in a generational relay race, we need to pass a relay to next generation and that generation needs to not start in debt, but start with opportunities. And I do want housing and life necessities to be affordable to them, to leave a better world for them. I don't think that view is shared among too many, but I know I'm also not alone in that kind of thinking.

I completely agree with your sentiment.
This is one reason I don’t like CA Prop 13 that works against young people.
It’s all about stealing their future.
No community prosper who is against their next generation.

MolotovCocktail says

Not according to Wookie's definition.

Wasn't my definition. https://www.vocabulary.com/dictionary/coastal#:~:text=Coastal%20things%20are%20near%20the,in%20an%20environmental%20science%20textbook.

You guys are cute. I said cities and coastal areas. Rivers and lakes are not that. A city might be on a river or lake though. Give me an example of one with real estate values crashing. I'll wait.

WookieMan says

areas. Rivers and lakes are not that. A city might be on a river or lake though. Give me an example of one with real estate values crashing. I'll wait.

Again!

Blue says

This is one reason I don’t like CA Prop 13 that works against young people.

Ahem, "CA Prop 13 that works against most young people.

Works for young progeny of long time California homeowners.
"

🙄

B.A.C.A.H. says

Blue says

This is one reason I don’t like CA Prop 13 that works against young people.

Ahem, "CA Prop 13 that works against most young people.

Works for young progeny of long time California homeowners.
"

.... but only if they live in their folks' old house. Which is not what everybody really wants, especially if there are siblings.

Or if the old neighborhood has turned into little Mexico.

CA Prop 13 is a A Ponzi scheme.
Like every Ponzi scheme, it does work for some at the expense of the others!
No law is perfect but Ponzi scheme law is the worst form of the laws.

That is quite illogical. Rising property values create equity which can be tapped via HELOC to pay taxes.

Al_Sharpton_for_President says

That is quite illogical. Rising property values create equity which can be tapped via HELOC to pay taxes.

This is how things work everywhere. But in CA, folks wanting to keep their equity and don’t want to pay taxes. That’s how Prop 13 came in only to ruin state with its side effects.

The_Deplorable says

Which is why it should apply only to "primary residence." But Prop 13 overstepped that goal by a longshot by applying to rentals, businesses, etc.

The better containment solution, though, would be to see how much property taxes are currently collected and make sure the total tax collected never increases by 2% each year. Then adjust everyone's tax rate to the rate that collects that amount of taxes when everyone's property is fairly assessed. Some people's takes would go up and some down. The ones whose taxes go up, by definition, has had their house increase in value massively and so therefore should be able to just have the county put a lien on the property to be collected when the owner dies. The lien thing, I believe, is already available to "seniors" here in Santa Clara County.

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

That bit of detail is what should have been included in the proposition, for sure.

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

It was to keep government taxes low because people couldn’t afford taxes.

No one back then imagined that little 60k houses would be ballooning to millions in “value”. It’s why we need to fix all property taxes to the value from prop 13 year adding 1% per year. Would drop most people’s taxes.

I guess this means Dallas is a coastal city, according to the Housing Experts of PatNet.

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

I read a book about the origin of Prop 13. Here's what I got out of it:

- Started with the case Serrano vs Priest, in which blacks and Hispanics in California argued that they were being discriminated against because their schools were not as good as schools in white and Asian neighborhoods.

- It was decided that instead of locally funding schools, CA property taxes would all go to the state to be redistributed "fairly".

- People in rich neighborhoods did not like that because it damaged their own schools.

- Howard Jarvis, backed by business interests, decided to covertly appeal to the resentments of the rich, and publicly make the case about "people on fixed incomes being forced out of their houses by property tax". But without ever planning to limit relief to just those people. In fact, his goal all along was to get permanent property tax limits on business.

- So we ended up with Prop 13, a whopping huge gift to the biggest businesses by making everyone else pay their property taxes for them via increased sales and income taxes. But people in rich neighborhoods were also pleased with the limits on the amount they would have to pay the state to be redistributed to poor schools. And their own schools mostly recovered in quality through various private fundraising and schemes like the Mello-Roos property tax: https://en.wikipedia.org/wiki/Mello-Roos

Overall, it was an epic cluster-fuck all around. Did not improve schools in poor areas, and made the rich in California much richer.

My old boss's boss from Schwab has a house in Palo Alto that he just leaves empty. It's worth maybe $7 million now. I asked him why he doesn't rent it out to at least pay the property tax. He laughed and said "Because you pay my property tax for me!" referring to Prop 13.

One strategy for ending Prop 13: Just make a zoomable searchable map of the whole state that publishes the extremely different property tax that everyone pays. It's all public info, in theory.

Newcomers get fucked for the benefit of the old-timers. Two identical houses next to each other might pay property taxes which are wildly different.

Patrick says

One strategy for ending Prop 13: Just make a zoomable searchable map of the whole state that publishes the extremely different property tax that everyone pays. It's all public info, in theory.

Newcomers get fucked for the benefit of the old-timers. Two identical houses next to each other might pay property taxes which are wildly different.

Won't change anything. Seniority based systems always frustrate new entrants at first. But it doesn't take that long before they feel like they 'have enough time in' to switch opinions on the matter.

Remember AOC raising hell against the Seniority in the House during her first two terms? Now she's as much as a total sellout as they are. Of course, going from being a broke ass bartender to having a $30 million net worth was pretty good K-Y jelly lube for that.

Patrick says

One strategy for ending Prop 13: Just make a zoomable searchable map of the whole state that publishes the extremely different property tax that everyone pays. It's all public info, in theory.

https://www.taxfairnessproject.org/ covers some areas.

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

It was a tax revolt.

Patrick says

One strategy for ending Prop 13: Just make a zoomable searchable map of the whole state that publishes the extremely different property tax that everyone pays. It's all public info, in theory.

This is pretty easy information to get. You can check the 'tax history' on Zillow to get a rundown of taxes vs. assessed value. Most county records of tax history can be viewed online for parcels.

There are inheritors all over my hoods in both Santa Cruz and Tri Valley.

Patrick says

He laughed and said "Because you pay my property tax for me!" referring to Prop 13.

This is one reason why, understandably, people want to eat the rich.

RWSGFY says

GNL says

Maybe Prop 13 was initially passed thinking it would limit government from growing. Hahaha, I know.

It was a tax revolt.

CA needs next tax revolt that pegs everyone’s taxes to back then. It wont happen though, too many businesses live off taxes.