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US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

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Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#151

Post by pound »

mjevans wrote: post #146
gnicholas wrote: post #126

Earlier quoted context omitted.

Thanks for clarifying — I didn't realize what you meant by bubble chasing. I agree that Prop 13 can reduce available inventory and drive prices up. Though note that at age 55, you can move into a less-expensive home and keep your old property tax basis (if you meet certain restrictions). This provides somewhat of an escape valve that allows empty-nesters to downsize and new families to move in.

Someone from CA or who's more familiar with the actual Prop 13 should clarify, however from what I recall reading in prior threads... I believe the benefits can also be passed in some non-sale transfers of the property; IE passing it on to loved ones. So if something stays within the family those benefits are locked in at the old rate instead of hitting the new rate. Which while it sounds nice for handing off a prope…

Transferring prop13 taxes when moving if someone is older than 55yo is very limited - should be within the same county and number of counties allowing it is 10 or 8 or something like that in CA. I may not remember exact details on that.

Prop13 was expanded to allow transfer taxes between parents & children and grandparents & grandchildren.

Also, commercial property is covered by prop13 too.

Also, prop 13 is not limited to the primary residences.

Also in many places schools are funded from property taxes, so all those complaints about horribly underfunded non-performing Californian schools have big "FU, got mine" from homeowners behind them.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#152

Post by gnicholas »

pound wrote: post #151
mjevans wrote: post #146

Earlier quoted context omitted.

Someone from CA or who's more familiar with the actual Prop 13 should clarify, however from what I recall reading in prior threads... I believe the benefits can also be passed in some non-sale transfers of the property; IE passing it on to loved ones. So if something stays within the family those benefits are locked in at the old rate instead of hitting the new rate. Which while it sounds nice for handing off a prope…

Transferring prop13 taxes when moving if someone is older than 55yo is very limited - should be within the same county and number of counties allowing it is 10 or 8 or something like that in CA. I may not remember exact details on that. Prop13 was expanded to allow transfer taxes between parents & children and grandparents & grandchildren. Also, commercial property is covered by prop13 too. Also, prop 13 is not limit…

Regarding property taxes being used to pay for schools, this is actually not as unfair as it might seem. That is, I pay much more than my next door neighbors, who have lived here for 30+ years. But I have school-aged kids, so I’m receiving more of a benefit from the local schools than they are.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#153

Post by pyoung »

all_blue_chucks wrote: post #111
pyoung wrote: post #71

Anecdote, but my wife and I dropped out of the market recently and rented instead. The rent was 30-40% cheaper than a mortgage would have been on a similar place (including taxes, insurance, etc...). So we figured we would just put the after-tax difference into a 401k (because 401k is pre-tax, for every dollar we 'saved' in housing cost, we are putting ~1.4 dollars into 401k). I figure that building equity in a house…

My house in Seattle has been appreciating by about $100k/year over the past five years. In other words, I'm making $100k/year on a $50k investment. You wont find returns like that in a 401k. And my interest payments are less than rent would be. Last but not least, home appreciation is TAX FREE up to half a million bucks. By all means, max out the $20k or so you are allowed to put into a 401k, but don't fool yourself…

I agree with the others on this thread.

You can't cash out unless you move out of the area or you downsize. And I may be wrong on this, but unlike CA (prop 13), your property taxes are going up.

And regarding timing, 5 years ago was probably one of the best times to buy a house on the west coast in the last few decades. That moment has passed. The reason I bring up the rent calculator, is because in most markets, at most times, that calculator will tell you to buy. Its the reason that I started considering buying ~2 years ago. But things have changed. Rents have been flat for about 3 years (at least in the Bay Area), while prices kept creeping up. So the way I see it, right now may qualify as 'exceptionally bad timing'. If the price-to-rent ratio is this out of whack, at the very least rental investors are going to head for the exits. My hunch is others (myself included) will exit as well. And the nice thing about renting, is I am only in a 1 year lease, so if I am wrong, and if the fundamentals change, I can jump back it the market.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#154

Post by pyoung »

debacle wrote: post #104
pyoung wrote: post #71

Anecdote, but my wife and I dropped out of the market recently and rented instead. The rent was 30-40% cheaper than a mortgage would have been on a similar place (including taxes, insurance, etc...). So we figured we would just put the after-tax difference into a 401k (because 401k is pre-tax, for every dollar we 'saved' in housing cost, we are putting ~1.4 dollars into 401k). I figure that building equity in a house…

You'll only be able to take advantage of that downward pressure if you have a large downpayment (and finance as little as possible).

I get what you are saying, but I think interest rates have a broader impact beyond just monthly payments. Real estate investors will start getting squeezed for example, so demand will dry up there. Also, I think downward prices impact the psychology of the market. Even if those price drops are entirely due to the rate increases (such that the monthly payment is the same), I imagine people will start getting nervous about jumping into a highly leveraged investment with falling prices, I know I would.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#155

Post by pound »

gnicholas wrote: post #152
pound wrote: post #151

Earlier quoted context omitted.

Transferring prop13 taxes when moving if someone is older than 55yo is very limited - should be within the same county and number of counties allowing it is 10 or 8 or something like that in CA. I may not remember exact details on that. Prop13 was expanded to allow transfer taxes between parents & children and grandparents & grandchildren. Also, commercial property is covered by prop13 too. Also, prop 13 is not limit…

Regarding property taxes being used to pay for schools, this is actually not as unfair as it might seem. That is, I pay much more than my next door neighbors, who have lived here for 30+ years. But I have school-aged kids, so I’m receiving more of a benefit from the local schools than they are.

And in case if your other next-door neighbours have school-aged kids and have property taxes based on 30yo assessment?

And in case if you don't have kids but pay way much more than your next door neighbours?

Or in case if the majority of your neighbours pay almost nothing in taxes? Then your taxes alone will not cover the expenses of that local school for you to benefit from.

Why have public schools then?

Actually what I want to say is that there is nothing fair in Prop13.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#156

Post by gnicholas »

pound wrote: post #155
gnicholas wrote: post #152

Earlier quoted context omitted.

Regarding property taxes being used to pay for schools, this is actually not as unfair as it might seem. That is, I pay much more than my next door neighbors, who have lived here for 30+ years. But I have school-aged kids, so I’m receiving more of a benefit from the local schools than they are.

And in case if your other next-door neighbours have school-aged kids and have property taxes based on 30yo assessment? And in case if you don't have kids but pay way much more than your next door neighbours? Or in case if the majority of your neighbours pay almost nothing in taxes? Then your taxes alone will not cover the expenses of that local school for you to benefit from. Why have public schools then? Actually wh…

No one has 30-year old property tax assessments and kids in school. This would require inheriting from 80-year old grandparents and having your parents pre-decease your grandparents.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#157

Post by dang »

Jedd wrote: post #123
dang wrote: post #82

Earlier quoted context omitted.

We changed the title from "Housing hit unexpected slowdown Shares of Redfin drop 20%". Submitters: please don't rewrite titles like that. If an article title is neither misleading nor linkbait, the site guidelines ask you not to change it. https://news.ycombinator.com/newsguidelines.html

Thanks dang. Perhaps modify it to 'US Housing market ...'

Sure.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#159

Post by h4b4n3r0 »

SomewhatLikely wrote: post #158
h4b4n3r0 wrote: post #97

About time it slowed down. My house is over 2x what I paid for it 6 years ago. I pay $10k/yr in taxes just to live in it, WTF.

Teachers have to live somewhere too.

I agree. But I don't see how it has any bearing on the situation: they are affected by the extremely high housing prices as well, to a much greater extent, and real estate taxes, while high, represent only a small fraction of state revenue. Sales and business taxes dominate there. Then there's the issue of the explosion of administrative personnel. As a parent, I'm not even sure what most of those folks do. I'm sure they "have to live somewhere", but I'd rather spend the money on teachers, schools, and supplies, TBH.

Re: US housing market hit a ‘significant slowdown’ in recent weeks, Redfin CEO says

#160

Post by pound »

gnicholas wrote: post #156
pound wrote: post #155

Earlier quoted context omitted.

And in case if your other next-door neighbours have school-aged kids and have property taxes based on 30yo assessment? And in case if you don't have kids but pay way much more than your next door neighbours? Or in case if the majority of your neighbours pay almost nothing in taxes? Then your taxes alone will not cover the expenses of that local school for you to benefit from. Why have public schools then? Actually wh…

No one has 30-year old property tax assessments and kids in school. This would require inheriting from 80-year old grandparents and having your parents pre-decease your grandparents.

prop13 taxes can be passed to grandchildren

"In 1986 and 1996 respectively, California voters passed Propositions 58 and 193, which extended Prop 13 to exclude from reassessment property transfers between parents and children (58) and grandparents and grandchildren (193). As a result, when you inherit a home in California, you inherit its tax assessment as well"

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