[quote=CA renter][quote=bearishgurl][quote=spdrun]Whether a home is paid off or not has no effect on value, only on whether the home CAN be sold without resorting to short sale or bank foreclosure.[/quote]
I understand that, spdrun. But an owner who has a paid-off property to sell (esp a longtime owner in CA with artificially low taxes) has many options. If they don’t get their price, they can rent it out or just furnish it, get an occasional landscaper and leave it “vacant” for occasional guests. Many do.
All I was trying to say is that these owners don’t have to entertain lowball offers or even need to price their listing in line with the comps. If they don’t get any offers that they will accept in a short period of time listed, they can just withdraw the listing and wait for a better day. And many do because it costs them very, very little to hang onto the property into oblivion.
I believe lots of these owners are just “testing” the market when they list. And they have the luxury of time and can do so.[/quote]
But this still doesn’t change the price they could get for their homes if they were to decide to sell. The only homes that matter are the ones that do sell to buyers who are willing/able to buy at a given moment in time. Those buyers are under no obligation to buy a house for any price, much less an artificially inflated one.[/quote]
Yes, of course. I agree that a withdrawn listing doesn’t constitute a “sold comp.” All I was trying to say is that withdrawn listings and properties turned into rentals or guest houses and never put on the market due to their ultra-low tax assessments could be marketed but are not. This leaves a permanent dearth of listings in established micro-areas (some very coveted areas) which cause prices to be permanently sticky there. The sellers who ARE motivated to sell in those areas have a “take it or leave it mindset” because they CAN. If buyers don’t like the prices there on the few listings available, they must go shopping elsewhere. This problem isn’t going to go away. It will only get worse as owners of these properties will simply hand them down to children/grandchildren, most of who will live in them, rent them out or keep them vacant. Buyers will continue to have little choice of inventory in the established areas (many of them coveted).
This phenomenon creates a situation where buyers lose out unless they can get an accepted offer on one of these properties. That means they’re going to have to pay at or very near what the seller wants or they don’t get the property. Would-be sellers in this category don’t lose out. They have several options at their disposal and always will.
These are the ramifications of the long-term effects of Prop 13 and its progeny, Props 58 and 193.
