Homeowners of SF bayarea: do you regret or not? (Industry: low income, mortgage)

[NewbieHere]

Originally Posted by TheGreatCurve

Don't forget that Prop 13 is one of the reasons why prices of houses to go up so much. So in that sense, Prop 13 is almost self-defeating.

No you are wrong. I have bought houses since 1976. Prop 13 doesn't cause house prices to go up so much, what evidence do you have. All the houses didn't go up equally. It's the demand of the area. House in my moms area area went up maybe 5 times since 1976 from when we first bought the house.
In fact, houses in the Bay Area didn't go up any faster than houses in my area. It went up even faster and there are no equivalent jobs growth. Hint, Chinese cash buyers.
It depends on the area. It's not because of Prop 13. Without Prop 13, we will be New Jersey. The law that Bill Clinton signed in 1996, the $500k capital gain exemption per couple is what causes house to be more volatile, more house flipping. Before that it was not as much.

[Ultrarunner]

Originally Posted by TheGreatCurve

To prevent poorer, older people on fixed incomes from being displaced from their homes due to property tax increases, they can easily change Prop 13 so that only people qualified based on age and income get the tax breaks. It should not be across the board. There's no reason that someone who earns $4 million/year should be getting a property tax break.

The majority will never vote for skyscrapers so it'll never happen if you leave it up to a vote. NIMBYs will always stop these types of projects if you give them a say in these matters. Thus, things that benefit society as a whole should not be put up to a vote by the people because most people only act in their own self interest.

There would have been no Prop 13 if the legislature would have tied the homeowner exemption to inflation...

The exemption meant a great deal when modest home cost 12 to 15K.

Legislature was more than happy to let the voters decide and even had a competing similar measure.

Prop 13 had been law since 1978

[Ultrarunner]

Originally Posted by TheGreatCurve

Don't forget that Prop 13 is one of the reasons why prices of houses to go up so much. So in that sense, Prop 13 is almost self-defeating.

So what causes home values to drop so much?

A home I sold for 255k was sold a year later for 350k and in 2009 sold as a foreclosure for 80k

Prop 13 was in full force.

[NewbieHere]

Prop 13 was passed because homeowners were losing houses due to unpredictable house property tax.

[Ultrarunner]

Double digit tax increases and a Legislature that was more than happy to let the voters decide except they misjudged the power and depth of the movement.

Governor Jerry Brown has repeatedly said Prop 13 is settled law.

The reason for Bay Area prices is people with the means desire to live here...

Last I checked it was still about 1/3 of home sales going all cash...

[dmode]

I just made 200K in two years for a home that I bought for 500K. For sure don't regret it.

[justinbro2002]

Bought a 4 bed 2 bath flip in 2011 for $315k refinanced in 2012 @4% dropped PI payment to $1169/month piti payment is $1571/month. Comparable rents have gone threw the roof the same house down the street just rented for $3200 and our house is worth $630k+. Yeah we have no regrets. We'd have a tough time finding a home for what we paid even in the Valley now.

[TheGreatCurve]

Originally Posted by Perma Bear

This isn't Crescent Bay. The Bay Area is naturally shielded by the Peninsula.

I was referring to the city of San Francisco. Do you want to be living in Sunset when a massive tsunami hits?

[TheGreatCurve]

Originally Posted by NewbieHere

No you are wrong. I have bought houses since 1976. Prop 13 doesn't cause house prices to go up so much, what evidence do you have. All the houses didn't go up equally. It's the demand of the area. House in my moms area area went up maybe 5 times since 1976 from when we first bought the house.
In fact, houses in the Bay Area didn't go up any faster than houses in my area. It went up even faster and there are no equivalent jobs growth. Hint, Chinese cash buyers.
It depends on the area. It's not because of Prop 13. Without Prop 13, we will be New Jersey. The law that Bill Clinton signed in 1996, the $500k capital gain exemption per couple is what causes house to be more volatile, more house flipping. Before that it was not as much.

Prop 13 creates more demand for people to want to buy houses because they know their taxes will be capped going forward. It also decreases the supply of available houses on the market because people who are locked into a low tax rate don't want to sell and have to pay a much higher current market tax rate if they move to another house.

Thus, when you increase the demand and lower the supply at the same time, prices go up. Of course, you still need to have an economy (or lots of people with money) that can support the higher prices, which we do have here in the Bay Area.

It's easier to afford to live in a $1M house with Prop 13 than without Prop 13, thus, more demand for $1M houses. That in turn pushes prices higher. I can almost guarantee that if they got rid of Prop 13 that housing prices will drop. For one thing, more long-time owners would be willing to put their houses on the market, thereby increasing the supply of houses for sale, which will push prices lower.

[TheGreatCurve]

Originally Posted by Ultrarunner

So what causes home values to drop so much?

A home I sold for 255k was sold a year later for 350k and in 2009 sold as a foreclosure for 80k

Prop 13 was in full force.

Well, of course Prop 13 is not the only factor in determining real estate prices in an area. There's also the economy, the financial markets, lending standards, inventory of homes, jobs, etc. Prop 13 is only one of the factors.