Trust the experts?

Twelve to 18 months ago, the biggest problem in the real estate market was owners "trapped in their homes".

http://www.miamiherald.com/news/southflo rida/story/893769.html

"[T]he housing boom" of the past few years had an unintended effect on homeowner's tax bills. Because the rate of "increase in a home's assessed value" for property tax purposes was slower than the rate of increase in the home's market value, property taxes on long term homeowners were artificially low. Any long term homeowner moving or down sizing would face tremendous increases in property taxes on their new residence.

http://www.miamiherald.com/news/southflo rida/story/893769.html

The supposed solution? "[T]he Amendment 1 property tax campaign with a promise: if the referendum passed, they would no longer be 'trapped in their homes.''' "The centerpiece of the amendment was portability, the ability for homeowners to transfer from one home to another up to $500,000" in assessed value for property tax purposes.

http://www.miamiherald.com/news/southflo rida/story/893769.html

The reality? "[T]he converging forces of the worldwide credit crunch, the explosion of home foreclosures and the resulting surplus of homes had a chilling effect. By the end of 2008, 39,000 homeowners transferred only $3.1 billion worth of tax savings to new homes, a fraction of the estimate, according to revenue department reports."

http://www.miamiherald.com/news/southflo rida/story/893769.html

The reason? "'The problem is, people can't sell their home to be able to move' . . . 'Whether it is effective in getting the real estate market going isn't going to be known until we get this glut of foreclosures off the market.'"

http://www.miamiherald.com/news/southflo rida/story/893769.html

In other words, people are now trapped in their homes by declining property values, in some cases to levels below their mortgage balances. The problem was not portability, but over inflated values which led to market collapse. A situation no one predicted.

So, why do we still keep listening to the prescriptions of all the financial experts and economic bureaucrats and real estate professionals? They've been wrong about EVERYTHING.

http://farrightdemocrat.blogspot.com/

Tags: property taxes, Real Estate (all tags)

Comments

5 Comments

Re: Trust the experts?

Find better experts? I don't have the solution, do you?

by X Stryker 2009-02-08 02:55PM | 0 recs
Common sense. History.

See what we were doing when times were good, and do it again.

by kosnomore 2009-02-08 03:11PM | 0 recs
Re: Common sense. History.

Which is?

by X Stryker 2009-02-08 03:38PM | 0 recs
Clinton's economic policy - -

balance the budget so people have sound money, pick a plan and stick to it so people can make economic decisions with some degree of confidence and certainty (i.e., no rule changes mid stream), and have the guts to raise taxes if you want to spend more money.  Common sense, like you do with your family budget.  Remember how GOOD things were in '98 - '00, after we raised taxes, balanced the budget, and were paying off the national debt with 100's of billions of dollars in surpluses?  IMHO.

by kosnomore 2009-02-08 06:09PM | 0 recs
Uh

things were "so good" in 1998-2000 because there was a tech bubble.  Just like they were "so good" in 2004-2005 because there was a housing bubble.  Clinton's 1993 tax hike was good policy but the economy was overheated in 1998-2000.

by JJE 2009-02-08 09:13PM | 0 recs

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