Landscape Gardener moving to WA needs advice!

[janb]

Originally Posted by Ultrarunner

Eventually prices reach equilibrium, at least that is what the economists say....
Janb, I would be interested in your opinion of Washington property tax. I read that Washington passed a property tax cap similar to California's Prop 13 and that it was thrown out in court....

I doubt if you would like MHO on the WA property taxes, as it would burn the pages ($33/day is a bit steep for taxes, I still have $1000/month med insurance, and utilities, food,,,). Folks having to relocate due to excessive taxes is happening in WA . WA has limited resources for taxation; and gov services - schools / libraries / emergency services, are not often managed very well. ... just be grateful you're not a business owner or farmer, they really get hammered. (B&O + Personal Property + use tax, workmen's comp, license fees...)

The reason I may stay invested in WA is that I expect the property values and growth to generally continue to trend up, as this is a desirable (and affordable ) destination, with a diverse economy (and I-5 + I-90, which are not going away). I also expect a correction in over-inflated props, (McMansions), but unfortunately for 'normal' buyers, not a significant overall market reduction. Eventually, if not already, the entire USA home market will become accurately and equitably valued, based on desirable holdings (just like the stock market). There are still a few enclaves of 'reasonable' but not necessarily 'cheap' areas. Each has their downsides. I would desire to be in WY, (very low taxes, few people) but... non-resident landholders... movie stars, stock traders..., have bought up the good stuff 20 yrs ago, (now they've also bought the water rights). Values are not sustainable as a farmer / rancher. (WY is also an 'energy' state, so cyclical prop values, very dangerous in today's market!).

According to my spreadsheet calcs on Cost of living in various locations, the escalation of values in WA + a short commute to Intl airport (PDX), and Costco... make it worth the prop tax expense to stay. OR is about equivalent INCLUDING their income tax, (since I won't have much income...) as they don't tax property at full FMV. OR state financing is really hurting. Long commutes for services and lower costs for housing also equals out, but without property value escalation, you need to be sure you want to stay where planted. (which is what I'll do when I find that spot)

The WA voter approved prop tax limit is currently being contested, and has not been implemented. (nor do I expect it to be. After all, who writes the laws?...usually politicians who have responsibilities of making the budgets ). An interesting thing about CA Prop 13, is that it allowed folks to take there valuations to their next properties, a really good idea for those of us facing 'fixed income'. (I recently met a family living in an ocean view home in San Clemente paying $700/yr taxes). Several of my ex-managers who were transplanted to PNW from CA, retained their 'Los Gatos' homes, and have since moved back to CA due to lower taxes

Realistic taxes really depend on a lot of things, including responsible spending from county / school / library / ... + a reasonable tax assessor (tho their stated job is to equate your values with Fair Market Value). Some assessors will wait a couple years to witness sustained prices, others get caught up in the speculation market, and force residents to pay taxes based upon what investors are forking out for speculative props. We've had one nearby lot sold 5 times in 10 yrs to speculators, but nobody is building on the lot, yet our 'unimproved' property values (area around home, in addition to 'improved' homesite) have gone from $20,000 to $200,000. THAT is ridiculous , as there is nothing we can do with our 'unimproved' property, except mow it... It will never be split as we are in a Federally protected view area. Most places are limited in zoning, so property valuations are really screwed up. (to the benefit of the assessor)

But irregardless, unreasonable taxes have caused much strife since the beginning of 'developed' civilization. (and more than a few wars).

[Symi81]

Long article from the Seattle Daily Journal of Commerce. Talks about Seattle market vs bubble markets like San Diego, Florida, etc:

Link: http://www.djc.com/news/re/11187248.html

March 8, 2007
Soured condo market in Seattle? Think again
# Even Portland has delivered more housing units in a market that’s half our size.
By DEAN JONES
Realogics

In 1995, I relocated to Seattle from Vancouver, B.C., convinced that downtown Seattle would soon simulate the explosion of residential development that I witnessed in my hometown. After all, the markets share similar characteristics: strong economies, healthy population growth, relatively compact downtown cores, growth-management boundaries, unbearable suburban commutes and beautiful natural surroundings.
Seattle’s three urban
condo markets
A few years ago downtown Seattle was viewed as one marketplace and condominiums were considered merely an alternative to apartments. Today, in-city neighborhoods are redefining themselves with individual identities and condos have become segmented into three primary product categories.

AFFORDABLE
While not inexpensive, this segment consists mostly of older resale properties and apartment conversions that generally range from below $200,000 to $400,000 ($350-$550 per square foot). Options for new construction are limited at these attractive price points due to construction costs and land values. Typically these projects are wood-frame construction located in peripheral neighborhoods. The most common home buyers are first-timers who have been renting in the city and newbie urbanites relocating from outlying areas. They’re attracted to the shorter commute, simplified lifestyle and the opportunity to build equity in a rising market.


There’s something to be said for being a late bloomer. Seattle can learn from other markets as we perfect our own future.

[BanteringBear]

Interesting. I read and read and read and couldn't find anything to show that wages in the greater Seattle area have increased along with property values to support current prices. It must be because such evidence does not exist. It really makes no difference if one is talking about Seattle, or San Diego, or Boston, or Phoenix, ad nauseum, local wages dictate local housing prices long term. Median incomes in the Seattle area don't even approach the level needed to support current prices. It's more common sense than anything. ALL areas in the US which have experienced a hyperinflation in property values, will experience a significant correction. There are no exceptions.

[Ultrarunner]

Thanks JanB for your insights... I live in California and think we are being regulated to death and we seem to have every tax imaginable.

The one bright spot is that all home owners have prop 13 protection which limits annual base tax increases to 2% and contrary to what some have said... I have neighbors that were able to live out their years in their family home only because of prop 13.

Washington is very beautiful and the State is reporting a budget surplus of a Billion. It would be nice if some of that was returned to the tax payers.