Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
One of my neighborhoods had an influx of first time home buyers starting in 2004.
Some of the older homes started to get spruced up and in general, except for parking issues, things were really starting to look up.
Last weekend, the last on the "NEW" home owners packed and moved. I came to know several very well over the last 4 to 5 years.
The 4 closest to me "Choose" to walk away.
The main reason is owning the home they bought is no longer worth it. Jose' told me he's throwing away money paying almost 4k a month for a home that he can rent for $1500 a month. He would have/could have continued to sacrifice if housing hadn't tumbled.
Property Taxes played a huge role... He and the other new comers were paying between $500 and $600 a month in property taxes... The people that bought his foreclosed home are paying $200 a month...
People will endure a lot if they perceive it's worth it in the long term... Many, no longer feel that way and are moving out in droves.
I just rented my home across the street from Jose's to Jose's neighbor who also just walked away from his home...
One of my neighborhoods had an influx of first time home buyers starting in 2004.
Some of the older homes started to get spruced up and in general, except for parking issues, things were really starting to look up.
Last weekend, the last on the "NEW" home owners packed and moved. I came to know several very well over the last 4 to 5 years.
The 4 closest to me "Choose" to walk away.
The main reason is owning the home they bought is no longer worth it. Jose' told me he's throwing away money paying almost 4k a month for a home that he can rent for $1500 a month. He would have/could have continued to sacrifice if housing hadn't tumbled.
Property Taxes played a huge role... He and the other new comers were paying between $500 and $600 a month in property taxes... The people that bought his foreclosed home are paying $200 a month...
People will endure a lot if they perceive it's worth it in the long term... Many, no longer feel that way and are moving out in droves.
I just rented my home across the street from Jose's to Jose's neighbor who also just walked away from his home...
But is it fair...? Don't we all want to pay less? Aren't we having to pay more because others just walk off...
You tell people they can spend more money, buy a bigger house, and everything will be even better in the future...most people won't question it and buy into the fad. There were so many people who were barely making ends meet buying into these exotic mortgages they didn't understand (I'm not sure I did even with an MBA, but I didn't jump on it) or loans where they lied, knew it was wrong, but thought they would be in a better position by now. The blame is with everyone in the process...every person who benefited from taking out too much money, or lending without taking into account risk, is paying in pain now for their rationalized ignorance of what they were getting into. It's going to be a painful learning experience.
The problem is so many people binged that in the purge people who did the right thing, or even something that was just sipping on credit or working in the booming industry, are being affected by losing their jobs or homes.
I agree they are both at fault, but the borrowers are more at fault.
If I have a dream I can fly, and I jump off the Nations Bank tower to prove it, is that my fault or the fault of Nations Bank?
Personal responsibility.
Boy that summed it up nicely
I know many people who purchased multiple homes during the peak of the housing bubble thinking they were going to retire rich when they sold them for a huge profit. I wouldn't throw a whole lot of sympathy their way now.
I tinik that so many saw and talked to their firends about now much they were making on their homes and they saw them seeming to prosper when they were struggling. Then its like dangling candy in front of a baby;all he knows is he wants that candy. Even the government wanted them to have it ;regardless of whether it was good for them or not. Looking at the massive credit card many have its pretty much the same story IMO.Goign along with the madenign crowd is often a bad chocie as they found out.How the governamtn seems to be saying we can't let tehm make such decidions again ;so we will enact laws that don't allow them to make those decisions.From one extreme to another as usual. Guarding people from themselves is the result because they took so many down with them that would ahve been fine if say they hadn't loss their job because of the crisis.
But is it fair...? Don't we all want to pay less? Aren't we having to pay more because others just walk off...
I think you've nailed the problem...
In a normal situation, business come and go all the time... the problem is the taxpayers are square in the middle on this and I too resent it.
The only recourse in CA on a purchase money loan is the property. All those that made down payments of less than 20% also paid private mortgage insurance premium to protect the lender in case of default.
I think the problem is, WE don't let anyone fail... so there is no real downside if failing businesses continue to get bailed out.
When I bought my first home... it was 20% down, 6 months of living expenses in the bank, another 3% for closing costs, 2 years minimum on the job, good credit and the house had to appraise... including all structural and pest control issues addressed prior to closing. My neighbor was even required to upgrade his electric service as a loan condition.
I think we will never again see this level of home ownership and we will shift to a nation of renters.
It amazes me that for years the Bay Area headlines were of the Housing Crisis... lack of Housing, lack of affordable housing... where have all these people gone??? I can drive down just about any street and point out the Bank Owned Properties... the one across the street SOLD for 440k 3 years ago and can't sell for 160k the 3 months it's been on the MLS????
The mantra was today's high price will soon be tomorrow bargain... in that it will only cost more in the future...
But is it fair...? Don't we all want to pay less? Aren't we having to pay more because others just walk off...
There's really nothing holding you back from walking off yourself.
Perhaps, just perhaps, our inflated economy and all prices are based on fake credit increases for the last 30 years. In spite of everybody saying things were booming in the last decade... even during the boom years, US GDP growth was only in the 3-4% range (historically we're in that range already). So, with no boom? We would of had zero to negative growth?
So, perhaps the housing boom, and the resulting employment, business, savings, investor, etc. boom was all a farce. America doesn't produce enough to merit the amount of consumption.
In reality, ALL prices have to drop. Your either going to have to fold if you hold too much debt... or you keep on dreaming that prices will come back if you just hold on long enough. Our economy has been based on inflated prices, wages, incomes, consumption, price of goods, etc. are all based on credit inflation.
If price levels fall, wages fall, production costs fall, cost of living fall, it'll just make America better situated to compete in a lower leveraged world.
Let them walk if they have to. It'll make America stronger in the long run. The person able to move in with lower payments will make America stronger. Otherwise, the better way is for the lender AND the home owner to take some responsibility and take an equal hit and have the home owner stay (Say prices fell 50%, the home owner loses their down payment of 20%, and the bank writes down principal the other 30%).
In reality, ALL prices have to drop. Your either going to have to fold if you hold too much debt... or you keep on dreaming that prices will come back if you just hold on long enough. Our economy has been based on inflated prices, wages, incomes, consumption, price of goods, etc. are all based on credit inflation.
If price levels fall, wages fall, production costs fall, cost of living fall, it'll just make America better situated to compete in a lower leveraged world.
-chuck22b
The Reality is my Taxes continue to increase
Why is it the Government seems immune to the economic realities
Why is it the Government seems immune to the economic realities
Property taxes and government tax revenues have fallen (as people buy less, make less (or unemployed), and homes assess for less). In the mean time, more people are using government services as the economy contracts (unemployment, libraries, social services, public training, etc.). Therefore government agencies are trying to balance reduced revenues with increased costs because of higher demand.
They can try to cut costs, instill furloughs, and in some cases lay off workers. But, that would result in more people using government services. So, they are essentially stuck in a rock and a hard place. Best case scenario is if they can reduce pay, renegotiate rents/leases, and keep the same amount of workers.
In the most part, it's hard for everybody to adjust to our new economic reality. Sticky prices and accustomed service levels are pretty much why taxes have a hard time going down. Likewise, sticky prices and accustomed services levels are keeping banks and home owners from realizing prices have to go down and that our economy Is Not sustainable at previous and perhaps even current levels of debt leverage.
Property taxes and government tax revenues have fallen (as people buy less, make less (or unemployed), and homes assess for less). In the mean time, more people are using government services as the economy contracts (unemployment, libraries, social services, public training, etc.). Therefore government agencies are trying to balance reduced revenues with increased costs because of higher demand.
They can try to cut costs, instill furloughs, and in some cases lay off workers. But, that would result in more people using government services. So, they are essentially stuck in a rock and a hard place. Best case scenario is if they can reduce pay, renegotiate rents/leases, and keep the same amount of workers.
In the most part, it's hard for everybody to adjust to our new economic reality. Sticky prices and accustomed service levels are pretty much why taxes have a hard time going down. Likewise, sticky prices and accustomed services levels are keeping banks and home owners from realizing prices have to go down and that our economy Is Not sustainable at previous and perhaps even current levels of debt leverage.
-chuck22b
You make a good point...
I appealed the assessments on the last two properties I purchased... one on December 31 2003 and the other in February 2005... so far my taxes have increased the maximum every year for the CA property and almost doubled on the WA property
It makes no sense in a time when values are falling like a rock and foreclosures are all around. I was told on the Dec 31 2003 property that they are only considering properties going back to Jan 1, 2004... so I missed it by 24 hours???
The Assessor for the other property said they do not consider foreclosure or short sales because they are "Distress" sales... that's the only sales in my area right now...
I'm free to go for the Formal Appeal Board Hearing which will be in about 2 years from now because they are overwhelmed with appeals... so I will let you know in two years... mean while I have to pay the full amount NOW?
I made an offer in compromise... just let me pay taxes on the price I paid and I will agree... sounds simple to me
Outside of Property Taxes... my State Income Tax is Up 10%, my Sales Tax is up 10%, my car tags up 50%??? There seems to be no end and yes, I'm ranting.
Even my water bill is going up 15% because me and my neighbors are conserving water under mandatory rationing and revenue is falling...
The company where I work is also going through a down turn... people have been let go and an across the board 10% reduction was put into place as well a making permanent the elimination of profit sharing and all 401k matches... oh, 401k is down 55% last I checked and last week the outside administrated announced plans to institute a custodial fee because the aggregate value of the company fund has fallen by 40%
I will gladly pay less for less in Services... if it was only that easy.
Let me pay for my children's education... my father taught public High School and ended up sending us to Catholic School... I can pay for ambulance 911 calls and I don't need to pay another assessment for a new sports stadium that I will never use for athletes making millions a year in salary... that goes for public transportation that can't come anywhere close to paying it's own way. Local teachers are complaining and I just don't have the stomach to listen to it anymore...
I won't even go into how the government says my car is too old, my lawn mower pollutes too much or I can't heat my home with my wood burning EPA Cat equipped wood stove on a cold winter night...
Government employees... Teachers, Police, Fire, etc have some of the best retirements money can buy and they still complain... I know some with multiple pensions... all taxpayer funded. Where else can a person work 20 years and get pension with medical... except the government?
Sometimes I just want to get off of this merry go round...
Last edited by Ultrarunner; 04-23-2009 at 01:12 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
