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Here we go again. Housing bubble. This reminds me of 2005...

Dancing Fire

Dancing Fire

Super_Ideal_Rock
Premium
Joined
Apr 3, 2004
Messages
33,852
My DD#1 bought her 2 story home about 9 yrs ago at the low of the market but now she wants to buy a 1 story house. I advise her to wait b/c once interest rates starts to rise (which it will within the next 12 months) the housing market bubble will burst again. She is living comfortably based on her income now so I don't want her to stress over a higher mortgage payment.

All our family members loves her current 2100 Sq ft 2 story home. Her 12 yrs old home still looks brand new but she don't like walking up and down the stairs. The current market price for a nice one story 2000 sq ft in our area is going for about $725K +, and a one story are hard to come by in our area. There are no more lands to built new homes in our area, so if she is gonna find a one story home it would be between 25-35 yrs old. The funniest part about all this is that our house is a perfect fit for her. :lol: Our house is 2350 sq ft with 4br, 2.5 bath on one story.
 
The hiding market is ridiculous here, very low intetest rates are good for all the property investors sitting out first homd buyers
its good your daughter is on the property ladder

2 story houses are fun if you'r a kid or have a nice view ....
 
the housing market where I live is stupid...houses are way over priced, we will be selling ours but about 5 or so years down the road when I retire....I too want a 1 story home ours is 2 and we also have 4 bedrooms, way more than we need
 
Housing market is insane in So Cal too. People are removing all contingencies and paying $100k over asking!!
 
mom2dolls said:
Housing market is insane in So Cal too. People are removing all contingencies and paying $100k over asking!!
Click to expand...

My brother and wife just sold their home in Sacramento to move to Michigan (job-related). They made out like bandits. I think it went 70k over list, cash offer. They just closed a week ago.

They went from nice condo in Cali to a waterfront lodge on a lake in Michigan.
 
The reason why we live where we live is because i refuse to have a huge morgage
Our wewkly repayments are less than the rent we paided 3 years ago
and its all very well with one's house increasing in value, you still have to buy somewhere else if you sell

the bubble was forcast to burst here after our lockdown last year but instead its just gone crazy and no one seems to know how to slow it down so first home buyers can buy their own home

The rent people are paying is mind blowing here - more than my wages ever were
And yet interest rates are at an historic low
there are some very greedy landlords out there right now
 
MMtwo said:
My brother and wife just sold their home in Sacramento to move to Michigan (job-related). They made out like bandits. I think it went 70k over list, cash offer. They just closed a week ago.

They went from nice condo in Cali to a waterfront lodge on a lake in Michigan.
Click to expand...
It is crazy here in Ca.. DD looked at some homes that went for 40K over the asking price. :knockout:
 
Dancing Fire said:
My DD#1 bought her 2 story home about 9 yrs ago at the low of the market but now she wants to buy a 1 story house. ...
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Also, if she stays put she'll be 9 years closer to living in a paid-off house :dance:
Imagine living most of your life with no mortgage or rent payments, especially in California!

And, here in California, her property tax bill on the new house will be MUUUUUCH higher. :knockout:

For others not 'in the know' 1978 California legislation Prop 13 means annual prop tax increases are limited to 2%, even if that house's value skyrocketed by 25% in that year.
But if you sell your house and buy another, of course at current market prices, that 2% limit on increase of your former house's assed value party is over.
You then the PT you pay based on the price of that new house, usually MUCH higher than the assed value of the previous house you sold.

en.wikipedia.org

1978 California Proposition 13 - Wikipedia

en.wikipedia.org en.wikipedia.org

From a wealth-building perspective IMO she should stay in her current house.
 
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Daisys and Diamonds said:
the bubble was forcast to burst here after our lockdown last year but instead its just gone crazy and no one seems to know how to slow it down so first home buyers can buy their own home
Click to expand...

That's what I thought was going to happen. I had fantasies of selling my place and getting a house in the burbs. Boy, was I wrong! Prices soared and I was happy to stay put.
 
kenny said:
For others not in the know 1978 California legislation Prop 13 means annual prop tax increases are limited to 2% (even if its value skyrocketed by 25% in that year), but if you sell and buy another house at current market rate the party's over.
You then pay based on the price of that new house, usually MUCH higher than the assed value of the previous house you sold.
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Kenny, Does the prop 13 rule only applies to your first house? :confused:
 
kenny said:
Also, if she stays put she'll be 9 years closer to living in a paid-off house :dance:
Imagine living most of your life with no mortgage or rent payments, especially in California!

And, here in California, her property tax bill on the new house will be MUUUUUCH higher. :knockout:

For others not 'in the know' 1978 California legislation Prop 13 means annual prop tax increases are limited to 2%, even if that house's value skyrocketed by 25% in that year.
But if you sell your house and buy another, of course at current market prices, that 2% limit on increase of your former house's assed value party is over.
You then the PT you pay based on the price of that new house, usually MUCH higher than the assed value of the previous house you sold.

en.wikipedia.org

1978 California Proposition 13 - Wikipedia

en.wikipedia.org en.wikipedia.org

From a wealth-building perspective IMO she should stay in her current house.
Click to expand...

Ive never understood why rates (what we call property taxes) should be related to a property's value
we all use the same water, we all use the roads, footpaths and street lighting

Perhaps a suburb with better amenities should pay more but im not compairing apples to oranges
 
Living on the east coast with only immediate family, I've always dreamed of living in California because both my mom and dad have a lot of family out there.

About 6 years ago, my company offered to relocate me out there. But at this point in life - with everything paid off - it would have been a real setback to having a big mortgage again even if I got a cost of living increase in my salary.
 
Daisys and Diamonds said:
Ive never understood why rates (what we call property taxes) should be related to a property's value
we all use the same water, we all use the roads, footpaths and street lighting

Perhaps a suburb with better amenities should pay more but im not compairing apples to oranges
Click to expand...

The rich can afford to pay more for public services than the poor.

If they made all pay the same tax the poorest wouldn't have money for food.
With the current scaled tax obligation, the rich have less money for ... uhm ... luxuries.

I prefer how it is now, but then I'm not in that unmentionable political party.

But also there's this ... the higher prop taxes in wealthier neighborhoods mean their local public schools get more money.
So, when little Jonny and Susie go to better schools they grow up to earn more money.
This way the rich get richer, and the poor get poorer ... the American way. :dance: :nono:
 
Daisys and Diamonds said:
Ive never understood why rates (what we call property taxes) should be related to a property's value
we all use the same water, we all use the roads, footpaths and street lighting

Perhaps a suburb with better amenities should pay more but im not compairing apples to oranges
Click to expand...

In NZ does everyone pay the same tax rate on income and property owned?
 
kenny said:
In NZ does everyone pay the same tax rate on income and property owned?
Click to expand...

No
not in most places
here in Wanganui its comparatively high right across the board because of the river, even in streets like ours that don't flood and in a less desirable part of town not much difference to a posh street on the othetside of the river / railway tracks

but down in Dunedin they took into account how much frontage the property had

Most councils calculate rates taking into account the govt valuation of the property
I do wonder if that would stop - say a landlord from doing improvements to the property ?
 
kenny said:
The rich can afford to pay more for public services than the poor.

If they made all pay the same tax the poorest wouldn't have money for food.
With the current scaled tax obligation, the rich have less money for ... uhm ... luxuries.

I prefer how it is now, but then I'm not in that unmentionable political party.

But also there's this ... the higher prop taxes in wealthier neighborhoods mean their local public schools get more money.
So, when little Jonny and Susie go to better schools they grow up to earn more money.
This way the rich get richer, and the poor get poorer ... the American way. :dance: :nono:
Click to expand...

I will say without getting too political it sux how US schools are funded like that
 
We pay insane property tax where i live, yet the school district is one of the lowest rated & very poor. Idk how it is possible
 
Daisys and Diamonds said:
... it sux how US schools are funded like that
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Agreed!
Yeah, it sucks how so many rich Americans are selfish and want to keep themselves and their spawn as rich as possible and don't give a crap about their fellow Americans born on the 'wrong' side of the tracks. :(sad

IMO all public schools everywhere in America should get the exact same amount of tax money per student.
I say, throw all the funds into one pot nationally, then divide it up equally based on the number of kids in every public school.

And I say zero public tax money for religious and otherwise private schools.

Equality! ... You'll find more of it in countries like Norway than in America.
 
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kenny said:
I don't know, but google is your friend. ;))
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Prop 13a is for any real estate property in CA including commercial properties. Basically the base year values can increase up to a 2% per annum until there is a change in ownership or substantial completion of construction projects. It doesn't only apply to your first house, it applies to any real property that you own, whether it is your primary resident or rental. At the end of last year, a ballot was to remove this privilege on commercial property, but it didn't go thru. This is especially big win for commercial property owner and corporations in California, that the property value won't get reassessed at market value every year. It was estimated with this ballot, the state tax revenue can potentially go up from $7.5B to 12B per year.

The one time you were probably thinking about is the Prop 60 and Prop 90. It is only one time where you can transfer the tax basis one time (at Age 55 or older) when you sell your current property and buy another. But the protected portion is only up to the value of the current home that you are selling.
 
kenny said:
But also there's this ... the higher prop taxes in wealthier neighborhoods mean their local public schools get more money.
So, when little Jonny and Susie go to better schools they grow up to earn more money.
This way the rich get richer, and the poor get poorer ... the American way. :dance: :nono:
Click to expand...

I am not sure if i agree with higher prop tax means the local public schools get more money. San Francisco's property values are thru the roof. You would be called crazy to try to buy in SF. Property tax revenue is estimated to be $2,067M for the fiscal year 2020 - 2021, $48M above budget, yes I believe that's a lot of income for the city. The city is rich, yet the schools are awful, facilities are dated, and teachers are unhappy. The school district is just a highly dysfunctional agency with all these crooks and their political games at the expense of children's education.
 
Daisys and Diamonds said:
I will say without getting too political it sux how US schools are funded like that
Click to expand...

Some states like mine have decoupled property taxes from local school investment. They underfund every school fair and square :cool2:.
 
Houses prices have risen drastically here. I hope the bubble bursts soon.... I want to get back in the market!
All houses here are “offers over...” I know many people who have missed out in several homes because it’s how much you are willing to offer over the amount.
I miss the days when you could offer what was actually being asked...
 
Yeah here in Melbourne we're experiencing the same. The year of covid meant that young people are not travelling or getting married so they have more money to buy houses. We recently sold for a nice price but to buy another house in this market is challenging. We had to offer over the highest bidder which was already higher than the asking. We were lucky they were unable to get finance so we were able to find a house. But the low interest rates and the RBA saying they won't raise the rates in the next few years. I'm interested to see how much the house prices increases before the bubble bursts. We've heard about this bubble for years but prices remain strong.
 
maryjane04 said:
Yeah here in Melbourne we're experiencing the same. The year of covid meant that young people are not travelling or getting married so they have more money to buy houses. We recently sold for a nice price but to buy another house in this market is challenging. We had to offer over the highest bidder which was already higher than the asking. We were lucky they were unable to get finance so we were able to find a house. But the low interest rates and the RBA saying they won't raise the rates in the next few years. I'm interested to see how much the house prices increases before the bubble bursts. We've heard about this bubble for years but prices remain strong.
Click to expand...

Overall supply has dropped due to COVID, people are pausing on the idea of selling because they were uncertain about the housing market and also not wanting strangers to tour. However, demand has been the same if not higher because of interest rates. There are not as many choices on the market. Despite unemployment rate being historically high, people who were shopping already have the means to. They would continue to shop or looking even harder to try to lock in interest rates. Not to say the stock market has been going crazy which is also giving a big push to the real estate market.
 
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