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September 11, 2012 at 11:54 AM in reply to: OT: Appeal your property tax assessment by Nov. 30 #751335
bearishgurl
Participant[quote=flu][quote=Blogstar]Should they add the %2(or any percent) in seriously falling markets year after year?
What does prop 13 have to address assessments in falling markets. What does the State Board of Equalization have to say about the practice of raising assessments in falling markets? These are some questions that came up after looking at my tax bills while going through the appeal.
Yes, it was funny to belittle my property to the assessor’s appraiser…My wife and I were laughing about it.[/quote]
I posted the following question a few threads back to validate my understanding…Here was the thread (which EconProf responded to)…
And UCGal summed up in the upper thread.
http://piggington.com/property_tax_minimization_after_reassessment
Basically, the 2% cap rule doesn’t apply if you get reassesed, and up to your initial price…So I was just thinking in theory …If you bought and the FMV of the property went down significantly and if it was possible(minus transaction costs of doing so,hassle etc)…Would it be better off selling the property/buying it back, and get you 2% cap rule from the new sale price….But I’m sure there’s rules about that too.[/quote]
Just reviewed this short thread. These two threads are the first time I have seen EconProf’s very informative posts!
September 11, 2012 at 11:48 AM in reply to: OT: Appeal your property tax assessment by Nov. 30 #751334Participant[quote=briansd1]I filed appeals in the 1990’s.
You can appeal down to comparable market value in a falling market.
In a rising market, the Assessor can adjust upward to market value, not to exceed assessed value when you purchased the property (generally purchase price), plus 2% compounded annually since. if the market is rising but not fully recovered from the peak, then your assessment might something lower than the maximum, unless you purchased before the runup.
What you owe on the property due to refinance has no bearing on the assessment.
if your build and improved the property over time, the formula is more complicated.[/quote]
Yes, brian, I appealed in 1994 as well and received about a $48K reduction in assessed value. But by the time our ’98/99 FY tax bill had arrived, the assessor had jacked our assessment back up to within 6K of the appealed value. At that point, there was nothing we could do about it.
Prop 8 allows them to assess higher or lower and also to “restore” an appealed value in just one tax year if market conditions dictate that it is warranted. Of course, these types of adjustments can, and most often do, exceed the 2% allowed by Prop 13.
September 11, 2012 at 11:37 AM in reply to: OT: Appeal your property tax assessment by Nov. 30 #751332Participant[quote=Blogstar][quote=briansd1][quote=Blogstar]
I was only asking if the assessor is really in compliance when raising the assessment in obviously falling markets?[/quote]Yes I believe they are on the properties with low assessment purchased a long time ago.
But I think their IT system is old so they sometimes forget.[/quote]
That’s a good point about the long ago purchases. I can see that as being reasonable.
In my case,the property gradually went into over assessed territory in 2008/2009 due to construction valuation increases without adjustments for the falling market.Then they kept adding value to the assessment in a falling market 2010,2011,2012. Could just be a glitch, as you say…but it did work out in the tax collector’s favor. I may want to go back and talk to them about it in case it would be beneficial to have the historical high assessment valuation changed…or something like that.
Thanks for letting me sound it out.[/quote]
Actually, brian, in some parts of the county, a property owner could have purchased as early as late 2000 and STILL received an assessment for FY 08/09 and later that is too high.
This happened to me, because, even though there are dozens of “luxury” properties situated on large lots close by (urban ChulaV), not very many of them “turned over.” What DID turn over were the many <1200 sf older 1-4 unit properties investors bought up for rentals during the millenium boom. These (tidy but numerous) properties are mixed in with hundreds of larger remodeled owner-occupied homes (like mine). When their easy-qual mortgages reset, these investors stopped paying their mortgages and in most cases, collected rent for as long as they could before succumbing to foreclosure.
Even though the bulk of these formerly "distressed" properties were not in any way comparable to their surrounding (mostly very well-maintained) owner-occupied homes, their recent sold-comps were so numerous that they had the effect of decimating the values of ALL surrounding properties.
In Chula Vista, there is also a problem (not yet completely resolved) of competing listings for *newer* SFRs (w/ small-lots and heavily encumbered with HOA/MR) located in adjacent zip codes (6-12 mi away) which, in the last few years, due to massive distress, have been selling for 50-85% off their original (sold as new) prices. I believe that, even with the additional heavy encumbrances, these *newer* areas are siphoning off younger would-be buyers from the established South County communities, where even ten years ago, there would not have been all these buying choices.
September 11, 2012 at 11:02 AM in reply to: OT: Appeal your property tax assessment by Nov. 30 #751330Participant[quote=Blogstar]Should they add the %2(or any percent) in seriously falling markets year after year?
What does prop 13 have to address assessments in falling markets. What does the State Board of Equalization have to say about the practice of raising assessments in falling markets? These are some questions that came up after looking at my tax bills while going through the appeal.[/quote]
Rus, CA Proposition 8 (not to be confused with Prop 8 – the more recently-passed gay marriage ban) obligates county assessors to look at values at the beginning of a calendar year to determine if they have actually risen 2%. Of course, in times of presumed appreciation, they do this via a “cursory check” by parcel map (most of which are HUGE, btw).
How does the proposition work?
When the market value of a property on the January 1 lien date falls below the factored base year value (assessed value), the assessor is obligated to review the property and enroll the lesser of the factored base year value or market value. The factored base year value of real property is the market value as established in 1975 or as established when the property last changed ownership or when the property was newly constructed.
A property that has been reassessed under Proposition 8 is then reviewed annually to determine its lien date value. The assessed value of a property with a Proposition 8 value in place may increase each lien date (January 1) by more than the standard two percent maximum allowed for properties assessed under Proposition 13; however, unless there is a change in ownership or new construction, a property’s assessed value can never increase above its factored Proposition 13 base year value after adjusting for the annual increase.
http://www.boe.ca.gov/proptaxes/faqs/prop8.htm#2
I’m glad to hear you were able to get a good settlement out of the assessor, Rus! I don’t know exactly what you bought but would guess that when you actually bought your parcel, there were decrepit and/or makeshift utilities brought up to it’s possibly barely habitable? dwelling and so it was assessed very low. When you eventually had to draw permits for everything, of course the assessor got wind of it through the Dept of Planning and Land Use. Your parcel was then reassessed at or near “boomtime” values and so was eligible for a large reduction in assessed value today but you had to formally ask for it and go through the motions.
I am cognizant that the values of many areas of the county, even those with hundreds of “luxury” properties, simply crashed in 2008 and beyond. This crash in value doesn’t make them any less desirable to live in (unless there are MANY unkempt foreclosed vacant properties within very close proximity). In your case, if there WERE a lot of distressed properties in your area, it is harder to tell from the road and adjoining properties, due to setbacks, lot elevations and less proximity to the neighbors. Bonita and Jamul come to mind here. Most of BOTH of these areas are absolutely fabulous (and private) to live in and are only 12-24 miles from dtn SD! I believe their values “crashed” deeper than other locations with less desirable houses and lots for three reasons. 1) because they both are a bit of a commute from major job centers and thus are full of retirees and work-from-home types; 2) Bonita is now surrounded by “competing” SFRs built since 2001 on smaller lots and encumbered by HOAs (with the vast majority encumbered by MR, as well); and, many Mexican nationals bought in Bonita and Jamul with “funny money” during the millenium boom (these locations have easy access to MX). And no, we’re not talking about “drug lords and middlemen/women” here. They were simply individuals without a SSN and US credit report who had a downpayment but couldn’t qualify for a mtg under a normal underwriting environment. When these Mexican potential buyers saw the type of property they could actually buy (large house on sprawling lot) within 10 miles of the US/MX border (to accommodate visiting family members from MX), they jumped at the chance to pay too much and didn’t understand their mortgages due to language barriers. When their payments began resetting, virtually all of them lost their properties to foreclosure (mostly in 2009).
In recent years, flipper teams and DIY people like Rus have come in and rehabbed the vast majority of these properties (often VERY quickly) and the flippers resold them for a $100K++ profit. IMHO, what the flippers are doing, in essence, is a community service which will eventually lift all boats.
It may take a few more years, but I feel values can only go up from here :=)
August 30, 2012 at 6:45 PM in reply to: Getting a mortgage for investment property these days #750956ParticipantTo edit my post above, I wanted to add that PUDs in CA are also recognized technically as “condos” but either have the garages joined (duplex type) or have no walls in common. The owners of these types of “condos” DO pay their own water/sewer bills as their HOA dues are usually lower (mostly paying for landscaping the front yards as part of the “common area”).
August 30, 2012 at 6:34 PM in reply to: Awesome front page LA Times article on the severe state pension issues #750953ParticipantIf “existing retirees” and those “deferred retirees who are soon to retire,” such as myself, are affected by any “pension overhaul” pending the outcome of these cases, I predict the cities/counties will first go after those members who took advantage of “enhanced benefits” while still working in 2002 or later. The formula for “enhanced benefits” results in a pension for an employee of the same classification and years of service of an earlier “retired” employee of about 2.25 to 2.75 times the earlier “retired” employee’s pension. HOWEVER, the “enhanced benefited” employee does NOT have a guaranteed healthcare allowance (+/- $300 mo). That will be the “low-hanging fruit” that goes away first, unless their pension is adjusted downwards. If it is, the Ret Assns will have to refund all their extra employee payroll contributions into the “enhanced system” to their respective employee-contributors in a lump sum (which employees in my category did not have to make).
These refunds will still be cheaper for the Assn (and severely limit any future gov’t backstops, if needed) and so will be preferable to the masses retiring under the “enhanced” systems.
I haven’t read the article in the OP yet, but I really believe it’s a HUGE uphill battle for these city/county/state govm’ts to win the right to decimate the retirement system formulas currently in place … yes, even in BK court.
Interesting times we’re currently living thru …
August 30, 2012 at 6:05 PM in reply to: Getting a mortgage for investment property these days #750949ParticipantMy understanding is that individual units of a co-op don’t have separate parcel numbers, like condos do.
Do you receive a property tax bill directly from your local “Assessor,” spdrun?
August 30, 2012 at 6:01 PM in reply to: Getting a mortgage for investment property these days #750948Participant[quote=spdrun]Are the properties with the high HOA fees co-ops, maybe. If so, the HOA may include taxes and other things (hvac, electricity, cooking gas, water).
$800/mo for a studio (generally inclusive of all expenses) isn’t unusual for an apt in NY.[/quote]
spdrun, considering this also includes security and all utilities, even in winter, this doesn’t sound too bad. Since your building is a co-op, does this $800 mo include your portion of property taxes, also?
And do you have a pool/jacuzzi, sauna or gym? How about an underground parking space?
August 30, 2012 at 5:58 PM in reply to: Getting a mortgage for investment property these days #750947Participant[quote=spdrun]Are the properties with the high HOA fees co-ops, maybe. If so, the HOA may include taxes and other things (hvac, electricity, cooking gas, water).
$800/mo for a studio (generally inclusive of all expenses) isn’t unusual for an apt in NY.[/quote]
In SD County, condo HOAs normally pay only water/sewer (on the same bill in the City of SD) for each owner excepting in some older downtown SD mid-rise complexes. These complexes were built before they were able to get access to cable so may have DSL internet access and TV service from satellite, which are included in the monthly dues.
It is possible that one or more of these complexes now have access to AT&T “U-verse” or cable and if so, at least basic cable and “advanced TV” (with HiDef converter box) is included in the dues.
I don’t know how many of the streets down there have actually had fibre optic installed but would surmise that all of the streets in the construction zones around Petco Park have.
Gas/electric (including AC) are NOT included in HOA dues. Timeshares are the exception.
We don’t have “co-ops” in SD County or use propane (except in very rural areas).
UR, or others “in the know,” correct me if I’m wrong here.
Participant[quote=flu] . . . Some of us are just tired of worthless, endless bickering on the most inane non-RE, non-financial, non-investment (or for that matter, anything off-topic, yet perhaps insightful thing)…that don’t contribute to anyone’s bottom line or helpful advice or “gee, I learned something new today”…[/quote]
Maybe a new thread should be started on the viability of rental SFRs in Detroit … as investments … for those who are becoming disenchanted with the stock market.
Being the foremost LEDLITA on this subject (who has never been anywhere NEAR MI), I’m not the one who should start it, ESP when we have *resident expert(s)* on board here ;=)
I mean, how much net rent annually does one need to pay off a $40-$45K mortgage and still end up with a little “profit” and a “slush fund” … even AFTER a property mgmt fee is taken into account? Or how about purchasing one for all cash and spending $5-$8K for repairs/replacements to put it into rental service?
They can’t be THAT badly built, given the ages of most of the neighborhoods and the fact that they are built to live in in sub-zero degree weather for several months per year, right?
The $64M question is “Are there enough prospective tenants there who have the income to rent and want to rent?” And, if so, “WHERE in the Detroit area would they prefer to rent, what is the average length of tenancy and how much does it cost to buy a good house there?”
And maybe the Piggs need to watch a good u-tube video on “pipe-wrapping.” Then they could “learn something” and perhaps get some good investment ideas for their stagnant portfolios :=]
Since you’re constantly on the lookout for “opportunities,” what’s wrong with this, flu? Do you know of anyplace with cheaper houses (that aren’t mobile homes)?
Participant[quote=flu][quote=no_such_reality]~US autoworker rant …[/quote]PM’ed you… In short, STFU… :)[/quote]
Thank you for beating me to the punch, flu 🙂
NSR, since you appear to have *experience* with US autoworkers, can you tell us if you were a former MI resident and/or a former autoworker?
And if there are just as many or more *jobs* in Detroit today, can you tell us what kind of jobs those are?
A few more questions here. If you know, do the bulk of jobs in Detroit which replaced autoworker jobs have health benefits, vacation and retirement benefits …. even 401K’s?? Are they full-time and/or do they pay enough to support at least half of a family of four (assuming the other parent is also employed)? Can these *new jobholders* qualify for a $40K to $140K mortgage to buy one of those plentiful cheap houses in Detroit, assuming little to no other debt? Why don’t you tell us which companies moved into Detroit in recent years and what kinds of employment opportunities they offer??
[quote=no_such_reality]I’ve been hampered by being unwilling to buy a condo or townhome. Nor will I buy a SFR with an Association. I’ve had enough of those as a owner and renter to see how badly they go.[/quote]
http://piggington.com/getting_a_mortgage_for_investment_property_these_days
NSR, since you’re so familiar with Detroit and all those cheap available older SFRs with NO ASSN, why aren’t you buying one or more for investment purposes? Could it be that you don’t think prospective tenants there make enough money to consistently afford the rent? Or does the Detroit area’s 16.9% rental vacancy rate have you on the sidelines?
Detroit was one of the hardest-hit cities in the recession, and with an unemployment rate of 9.9 percent as of May, it’s little wonder that its 16.9 percent rental vacancy rate is the second highest in the country. Surprisingly, though, the homeowner vacancy rate remains below the 75 largest metro area’s average of 2.18 percent. According to the Census Bureau, at the end of 2011, Detroit had a gross vacancy rate of 12.2 percent, a level the city has virtually maintained since 2006.
http://realestate.yahoo.com/news/america-s-emptiest-cities–2012.html
NSR, if the above conditions are your reasons for not purchasing Detroit investment RE, why do you think they are present today?
Just seeking your *expert* opinion, NSR . . . or rather, perhaps that of a REAL expert on Detroit rentals and the plight of the US autoworker today.
http://piggington.com/can_i_ask_rental_applicants_old_landlord_if_he_paid_rent_ontime
[quote=birmingplumb]…Meanwhile the Big 3 plant I work at has 10,000 OSHA violations, was built without any permits and despite my letters, grievances and outrage-continues to produce cars all in the name of saving the middle class.
So prosecutor discretion ala Janet Napalitano and the “dream act”is all I can think of…[/quote]http://piggington.com/unpermitted_work_on_older_homes
birmingplumb, I know you’re busy trying to find and keep reliable tenants when not actually toiling in the trenches (literally speaking) in your “day job” but if you happen to see this thread, please chime in. Your “expert opinion” is needed here …. and the Piggs are also wondering just how much money the head of your “Big 3” plant made in 2011. Thanks for any help 🙂
ParticipantQuestion for the Piggs:
Is the fact that US automakers are getting their labor MUCH cheaper (than when their vehicle parts manufacturing and vehicle assembly was done solely in the US) causing them to pass those savings onto the US consumers who buy their vehicles?
In other words, are “US branded” vehicles cheaper now than they were ten years ago?
Or is the higher price today being eaten up by shipping costs (back to the US) of parts and/or completely assembled vehicles and increased profits to the automakers??
Participant[quote=CA renter]Fact-based stuff, like this:
[clip]
The city lost almost 65% of its population over the past ~60 years, primarily because of the loss of good manufacturing jobs. That just might have some effect on a city’s economy, don’t you think?[/quote]
Excellent post, CAR. Filling in for NSR’s incomprehensible gibberish, I thank you for your factual research. A lot of people don’t really understand that moving a large portion of “American made” vehicle parts mfg and even vehicle assembly overseas had the effect of decimating the stronghold of US automotive-worker unions.
But, of course, who needs unions?? I guess “no one” but the ~500K longtime US automotive workers who lost their jobs in Detroit in the last decade :={
I don’t think the Chinese, Indonesian, Indian and Mexican workers likely making $8-22 per day toiling over manufacturing “American” auto parts and vehicles (sans OSHA, of course) are going to be able to help put “Detroit” back on the map :=0
Maybe southern MI can get some more ski resorts (is it hilly enough?) or ice skate parks operating to help boost the local economy there.
Participant[quote=briansd1] . . . Home automoation is cool. When I was a boy I had dreams of Tomorrowland where everything was automated. We are still far off.[/quote]
You never know, brian. I’m certainly not counting on it but maybe YOU will yet be able to live a “Jetson-like” lifestyle before you complete your “bucket list!”
[img_assist|nid=16122|title=The Jetsons in Orbit City|desc=|link=node|align=left|width=320|height=219]
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