[quote=no_such_reality]Since my kid is 5, hopefully that doesn’t happen. In general, the generational passing of the asset is one of the things that is broken. The limit on the increase, isn’t.
Without concrete data, it’s hard to quantify what level is the problem. I bought my first townhouse in 1997. By 2003, it was accessed at less than half of market value. That wasn’t an intergenerational transfer, that’s California’s bubbly real estate. Anybody that purchase pre-2005, basically will be at half market. Even most peak buyers are even again.
The primary problem opponents of Prop 13 have is the massive over-reach they are doing in the money grab. And previously proposals against prop 13 have been money grabs and not tuning of minor issues with it.[/quote]
NSR, I don’t agree that anyone who purchased pre-2005 has an assessment that is half of (today’s) market value. For those who purchased in 1997 … maybe … depending on location. Not ALL areas of the county have doubled in value since 1999.
If you will remember, “market rate” assessments in SD County were temporarily automatically reduced by the assessor in 2010, retroactive to FY ’09/10 and about 2-3 tax years after that, pursuant to Prop 8 and then brought back up to their prior (before the downturn) values in Sept ’13 tax bills issued for FY ’13/14, again, pursuant to Prop 8. Yes, the ’13/14 bill was probably an accurate reflection of values at that time as were the ’14/15 bills. But as far as my area is concerned, my tax bill isn’t cutting me any breaks really as my assessment is pretty close to market value … less than $100K difference, depending on terms of sale. Not ALL AREAS have doubled in value since 2009. Some areas (such as mine) have barely inched up in value partly due to few available nearby sold comps and what HAS mostly been sold were rundown properties purchased by (mostly buy-and-hold) flipper teams for cash. The “good stuff” around me situated on 1/2 AC+ lots is being hung onto by their longtime owners who are currently assessed at 1/6 to 1/10 of today’s market value. And I can’t blame them.
The other main reason my area doesn’t sell well is that there is a plethora of much newer construction available from 6-12 miles SE of here for comparable prices. Today’s buyers don’t seem to care about the extra hour per day in commute time, extra few hundred (thousand?) per month in MR/HOA attached to these subdivisions and the substandard lots that many (most?) of these homes are built on … only that they are “newer.” Today, newer homes outsell older ones by probably 8 or 10 to 1 in SD County, where family-forming buyers have many housing choices. Part of the reason is lack of inventory in the older areas (for reasons mentioned ad nauseam, above) and part of the reason is that millenials are unwilling, for the most part, to do any work on a property they just purchased and unwilling to move their household goods into a property which they feel “needs work.” By “needing work,” I mean that they don’t even want *new* carpeting if they can have flooring, instead. They won’t take even ten year old appls if they can have newer ones, instead. It’s all inconsequential stuff that ends up triggering them to actually make an offer on a property and they refuse to consider the big picture (like where, exactly, are their 3 kids going to play when they are working inside the home). Most millenial families will take a condo with little or no yard over a single family home as long as it is “newer.”
And retiring boomer-buyers are far and few between in crowded big cities and their close-in suburbs, imho. That is precisely the kind of life most of them are hoping to escape one day. I know because I am one.
So that only leaves the “local” buyer who grew up in the same micro-area and needs a home near other relatives so their kids can walk to relative’s houses after school while the parents work. Or buy-and-hold flippers who want to pay next to nothing for your house, put generic lipstick on the pig and rent it out. Neither of these types of buyers bode well for the seller making a “killing” on an older home which doesn’t have a view and is not located inside an “exclusive” area (such as Kensington, SD). That is, unless the seller bought at least 25 years ago and didn’t take out any equity.
