housing bubble?

[bearishgurl]

[quote=SK in CV][quote=bearishgurl]
Okay, SK, fair enough. But, just so we’re on the same page, the tax savings is more than a “few bucks.” It adds up to many, many thousands of dollars over the course of the lifespan of a typical retiree.

If you all don’t mind, I don’t mind … but I (if given this oppt’y), would have done everything in my power to make “mom’s house” mine, whether or not I chose to actually reside there 🙂

Location and/or condition be damned.[/quote]

It would have saved her about $3,500 a year. There are a lot of homes in Allied Gardens where the savings wouldn’t have been that much. Even with the low taxes, it wouldn’t have made a good rental, rents just aren’t high enough.[/quote]

I’m not quite understanding you. Was your mom’s house in Allied Gardens or Del Cerro? And is your sister’s house in Allied Gardens or Del Cerro?

Thanks for any clarification 🙂

[SK in CV]

[quote=bearishgurl]

I’m not quite understanding you. Was your mom’s house in Allied Gardens or Del Cerro? And is your sister’s house in Allied Gardens or Del Cerro?

Thanks for any clarification :)[/quote]

Both are in Del Cerro.

[bearishgurl]

[quote=SK in CV][quote=bearishgurl]

I’m not quite understanding you. Was your mom’s house in Allied Gardens or Del Cerro? And is your sister’s house in Allied Gardens or Del Cerro?

Thanks for any clarification :)[/quote]

Both are in Del Cerro.[/quote]

Okay, is each one on sts facing Mission Bay (whether or not the home’s orientation faces the bay) or in “Princess Del Cerro” (facing south or SE, towards SDSU).

Thx.

[SK in CV]

[quote=bearishgurl]
Okay, is each one on sts facing Mission Bay (whether or not the home’s orientation faces the bay) or in “Princess Del Cerro” (facing south or SE, towards SDSU).

Thx.[/quote]

In Del Cerro, not Princess Del Cerro. For people that grew up there in the 60’s, the two are not the same, though the orientation of the homes is not dissimilar. Most streets in both neighborhoods run generally from east to west, so the front of the homes face either north or south depending on which side of the street they’re on. Very few homes in Del Cerro face the bay, except for a handful up on the hill. The bay is more than 10 miles away. SDSU is due south of almost all of the west side of Del Cerro and due south of all of Princess Del Cerro.

[bearishgurl]

[quote=SK in CV][quote=bearishgurl]
Okay, is each one on sts facing Mission Bay (whether or not the home’s orientation faces the bay) or in “Princess Del Cerro” (facing south or SE, towards SDSU).

Thx.[/quote]

In Del Cerro, not Princess Del Cerro. For people that grew up there in the 60’s, the two are not the same, though the orientation of the homes is not dissimilar. Most streets in both neighborhoods run generally from east to west, so the front of the homes face either north or south depending on which side of the street they’re on. Very few homes in Del Cerro face the bay, except for a handful up on the hill. The bay is more than 10 miles away. SDSU is due south of almost all of the west side of Del Cerro and due south of all of Princess Del Cerro.[/quote]

Okay, then your mom’s home and your sister’s home are not too dissmilar in value. Your sister must have truly loved her home not to want to have your mom’s home for $3500 yr less (for now … much more as the years go by) in taxes.

SK, per chance, did your mom’s death occur in one of the years where property values were down (2008-2011)?

Thx, and sorry for so many questions. I’m not trying to make any “identification” here and have no way of doing so. I’m just trying to understand the motivation of typical “CA heirs” who pass up an oppt’y for severely-lowered property taxes for the balance of their lifetimes and going forward … and on a property in a very decent neighborhood, at that!

[CA renter]

BG,

SK’s story is very similar to ours. We’ve inherited multiple properties, and choose to sell everything.

This is what I keep trying to explain to you. Nearly all of the people I know who’ve inherited a house with a low tax basis ended up selling it. The reasons vary, but tend to be because they want to settle the estate and the easiest way to do that is to liquidate everything and divide up the cash; or some simply have no desire to live in their parents’ homes because they have lives elsewhere and don’t want to deal with the hassles of maintaining and renting out older homes, etc.

I’m not sure where you get the notion that everyone wants to keep their parents’ homes. That’s not what I’ve seen at all. And Mr. CAR and I are native Californians, as are most of our long-time friends, so have known quite a few long-time Californian families who’ve owned properties for many, many decades. This just isn’t nearly as common as you seem to think it is.

[scaredyclassic]

people do inherit rent controlled apts in NYC though….i think…

[SK in CV]

[quote=bearishgurl]

Okay, then your mom’s home and your sister’s home are not too dissmilar in value. Your sister must have truly loved her home not to want to have your mom’s home for $3500 yr less (for now … much more as the years go by) in taxes.

SK, per chance, did your mom’s death occur in one of the years where property values were down (2008-2011)?

Thx, and sorry for so many questions. I’m not trying to make any “identification” here and have no way of doing so. I’m just trying to understand the motivation of typical “CA heirs” who pass up an oppt’y for severely-lowered property taxes for the balance of their lifetimes and going forward … and on a property in a very decent neighborhood, at that![/quote]

The house was sold in mid-2006. Sales prices had already started to drop there, they dropped further and now they’ve recovered to just about the same place they were then. Properties there are a great bargain.

I have a question for you BG. I suspect your home is either paid for or close to paid for and you’ve got a shit load of equity. Why don’t you sell your house and buy different house for $150K less? I’m sure there must be a home for $150K less somewhere not too far from where you now live. With that downward move, you would easily save $3,500 a month. If you think my siblings or I should have jumped at the opportunity to save $3,500 a years by moving down, why haven’t you done everything in your power to do that?

[scaredyclassic]

a rent controlled apt would save a lot more than 3500 a year over nonrent controlled though

[spdrun]

I’ve heard stories of people renting a 3 bdr apartment for $400/mo. Generally this is pretty rare though.

[bearishgurl]

[quote=spdrun]I’ve heard stories of people renting a 3 bdr apartment for $400/mo. Generally this is pretty rare though.[/quote]

3/4 bdrm (1600-2000 sf) rent-controlled apts (flats) in SF typically rent for $2000 – $2500 mo. That is the cheapest I’ve heard of and SF’s rents are probably on par with Manhattan (NY, NY’s) rents.

[bearishgurl]

[quote=SK in CV][quote=bearishgurl]

Okay, then your mom’s home and your sister’s home are not too dissmilar in value. Your sister must have truly loved her home not to want to have your mom’s home for $3500 yr less (for now … much more as the years go by) in taxes.

SK, per chance, did your mom’s death occur in one of the years where property values were down (2008-2011)?

Thx, and sorry for so many questions. I’m not trying to make any “identification” here and have no way of doing so. I’m just trying to understand the motivation of typical “CA heirs” who pass up an oppt’y for severely-lowered property taxes for the balance of their lifetimes and going forward … and on a property in a very decent neighborhood, at that![/quote]

The house was sold in mid-2006. Sales prices had already started to drop there, they dropped further and now they’ve recovered to just about the same place they were then. Properties there are a great bargain.

I have a question for you BG. I suspect your home is either paid for or close to paid for and you’ve got a shit load of equity. Why don’t you sell your house and buy different house for $150K less? I’m sure there must be a home for $150K less somewhere not too far from where you now live. With that downward move, you would easily save $3,500 a month. If you think my siblings or I should have jumped at the opportunity to save $3,500 a years by moving down, why haven’t you done everything in your power to do that?[/quote]

SK, I thought you posted on this thread that your mom’s house was larger than the one your sis owned in the same area. So, for her, taking it over would not have been a move down but would have involved the sale of her current home when prices were falling.

I agree with you that homes are a bargain in DC as I have been in a few of them with spacious, step-down LR’s and dramatic floor-to-ceiling rock FPs with very nice views (co-workers’ gatherings). The reason that they are still a relative “bargain” kind of escapes me, but after reading on this board for a few years, I would suspect that most of DC’s stock is too old and dated to appeal to today’s family-raising homebuying set (even though you and I both know the public schools are exceptional around there).

I think what you meant by your posting above is that you think I would save $3500 per yr (not per month) if I sold and bought a house for $150K less. However, I cannot move until after my last kid graduates from HS (next summer). I currently have about 60% equity and am in the process of making repairs so if I DO decide to sell, I can get the best price possible (or the best tenant possible). In addition, I have pets and it would be folly for me to move between now and then because it would have to be within the same school district where I likely wouldn’t be able to find a $300-$350K house anymore and wouldn’t want to stick around long enough to deal with a heavy fixer because I want to leave SD County next year and try out another area. Whether I decide to buy or rent in the new locale (and sell or rent out my house here) still remains up in the air. I won’t be making that decision until the spring.

In any case, buying a house just $150K less than what I sold mine for would result in a “wash” between my current tax bill and my new tax bill because my current house, even with a recent Prop 8 upward assessment for FY 13/14, is still assessed at about $150K less than its market value.

[SK in CV]

[quote=bearishgurl]
In any case, buying a house just $150K less than what I sold mine for would result in a “wash” between my current tax bill and my new tax bill because my current house, even with a recent Prop 8 upward assessment for FY 13/14, is still assessed at about $150K less than its market value.[/quote]

150K less in assessed value is saving you $1500 a year. You could move down by $150K and have a house close to free and clear. It would have to save you a net of at least $4K a year. ($150K or thereabouts on your current mortgage at 4% is $6K a year in interest you could save.) You’ve suggested that my family should have moved, irrespective of non-financial issues, yet those non-financial issues (school for your kids, pets, etc.) are sufficient for you to NOT move. My point is, everyone has those non-financial issues, and moving into an inherited house never comes down to just money. There are always other considerations. Which is why it does NOT happen more often than it does.

[The-Shoveler]

In the case of L.A. some of those old hoods have degraded quite a bit in the last 20 years.

That whole urban revitalization thing is not quite happening in most of L.A.

[bearishgurl]

[quote=SK in CV]…My point is, everyone has those non-financial issues, and moving into an inherited house never comes down to just money. There are always other considerations. Which is why it does NOT happen more often than it does…[/quote]

SK, I can’t go into all the particulars, but I am seriously “stuck” here until next summer. I “could” pay off my small mortgage now but it is fully assumable for a small fee and I am in hopes that a (neighbor?) buyer might want to assume it and pay cash for the rest of the PM. It is currently at 3.7%.

If I decide to rent my house out, I may pay it off at that time to simplify things for myself (and the PM who is left to manage it). I’ll have to run all the numbers through my prospective tax return to decide what to do.

Again, I think the micro-areas where one of the heirs tends to keep the family home are the $200K-$350K areas (or were in that price range during the downturn). They are not in upper MC areas like DC (which would cost too much for any one heir to buy out any others). In the working-class areas, there seem to be more estates where at least one of the heirs needs somewhere to live at the time of their (last) parent’s death and finds a way to buy out the rest of the heirs (even if any other heirs have to carry a note for a time). Or one of the heirs took care of their remaining (infirm) parent during the last years of their life because that parent wasn’t in a financial position to move to a board and care facility and so is left the (modest) family home. I do see all of these scenarios all around me … even legally-disabled heirs inheriting their longtime family home. I’ve also seen heirs move an air mattress in (from their home across town) and spend their wknds cleaning up and rehabbing a home for a few months (which they inherited) to ready it for tenants and then lease it out.

This phenomenon IS common all over the state and will continue to be so as long as Props 58/193 remain on the books as written.

[Author]

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