Duke said:Basically, as I read it, he wants to use excessive taxation to force people to use their private land as he / society / the government sees fit.
That is how I see it too. Every time I read through it, my thoughts bounce straight scenes from Dr. Zhivago.
pheller said:Yep.
Yikes.
Duke said:Basically, as I read it, he wants to use excessive taxation to force people to use their private land as he / society / the government sees fit.
Or to put it another way, he can't afford to buy a place where he wants to live, so we should punish people until he can. For fairness.
In reply to gearheadmb :
That's how I read it.
I bought a $370k home that I put 20% down on. It's my only debt. My wife works part time. I never work overtime. I don't manage anybody. We do alright.
The neighbor behind me, the guy I bought my house from, recently bought a $750k 4-bed 2.5 bathroom house in a gated community. His old house behind me, is probably worth $480ish. It's been vacant for 6-months. The house across the street, which is the same size as mine, worse condition, sold for $410k, and its owners have only lived in it on weekends for the last 3 months.
EDIT: most of the homes in this neighborhood were built in the late 90's and sold for anywhere between $155k and $190k.
I'm advocating for a policy that would likely decrease my property value.
Inflation is not corrected by taxation. Supply and demand drive inflation. Your plan will simply move part of the cost of ownership from the mortgage to an increased tax burden. A desirable area will still cost more than a less desirable one.
This is a pretty typical 3 card monty or shell game played by political types whose policies are at odds with human behavior and basic economics. No offense. It is just the truth.
If you want to reign in the real estate investment craziness, then tighten the mortgage rules, 20% down minimum, multi year employment history, money in the bank, and manual underwriting to confirm all of those financial details. Housing would definitely be cheaper as few would qualify for a mortgage and darn near no one would qualify for multiple mortgages. On a positive note, there would no chance of repeating the 2008 market crash as there would be very few defaults. Of course, there would be wailing and nashing of teeth from all of the folks who would suddenly not qualify for a loan so it is not all rainbows and unicorn farts.
I wonder how long it would take someone who's paid 75k a year to save $60k for a 20% dp.
In reply to yupididit :
A disciplined person might save 60k on a 75k income in about 5 years saving 20% of their take home income per year. I figure about 10 years for someone doing it at a more leisurely pace. Of course, 300k is probably a little too much house for someone making 75k per year even in the current environment. I am assuming approximately 50k take home pay after taxes and insurance.
Realistically, home prices would drop to make that 20% down payment attainable in 3 to 5 years for that level of income. So the 60k down on a 300k home would probably drop to maybe a 32k down payment on a 160k mortgage. This would significantly slow the real estate market until people acclimated to the rules. Eventually, this would become the new normal and the market would stabilize at a less frenzied but healthy pace.
In reply to tester (Forum Supporter) :
I understand that what you mean by saying a $300k home might be too much house for that income but sometimes that's the average priced option. There are many places where average home values in a safe neighborhood with good schools near work, are $300k in average while a person's income in the same area is $60-75k. I think a lot of average earners find ourselves in that position in places with good jobs and schools. For sure wages do not grow to meet home values or education cost.
I think that's why we end up in discussions like these.
tester (Forum Supporter) said:In reply to yupididit :
A disciplined person might save 60k on a 75k income in about 5 years saving 20% of their take home income per year. I figure about 10 years for someone doing it at a more leisurely pace. Of course, 300k is probably a little too much house for someone making 75k per year even in the current environment. I am assuming approximately 50k take home pay after taxes and insurance.
Realistically, home prices would drop to make that 20% down payment attainable in 3 to 5 years for that level of income. So the 60k down on a 300k home would probably drop to maybe a 32k down payment on a 160k mortgage. This would significantly slow the real estate market until people acclimated to the rules. Eventually, this would become the new normal and the market would stabilize at a less frenzied but healthy pace.
Or you can serve your country for a couple of years and buy your house with nothing down. ( VA benefits ). The interesting thing is that fewer Zero down homes are foreclosed on than homes with traditional 20% down payment.
In reply to frenchyd :
Nah them VA benefits ain't worth serving just to buy a house or to get benefits. LoL do that because you really want to or have nowhere else to go. Unpopular opinion.
Duke said:Basically, as I read it, he wants to use excessive taxation to force people to use their private land as he / society / the government sees fit.
Toronto is proposing that right now. People are buying up multiple units in development and they sit empty until the market is where they can make the profit they want.
Why are they empty and not available on the rental market ? See my comment about the Provinces restrictive rental legislation earlier. Who’s the problem here?
frenchyd said:tester (Forum Supporter) said:In reply to yupididit :
A disciplined person might save 60k on a 75k income in about 5 years saving 20% of their take home income per year. I figure about 10 years for someone doing it at a more leisurely pace. Of course, 300k is probably a little too much house for someone making 75k per year even in the current environment. I am assuming approximately 50k take home pay after taxes and insurance.
Realistically, home prices would drop to make that 20% down payment attainable in 3 to 5 years for that level of income. So the 60k down on a 300k home would probably drop to maybe a 32k down payment on a 160k mortgage. This would significantly slow the real estate market until people acclimated to the rules. Eventually, this would become the new normal and the market would stabilize at a less frenzied but healthy pace.
Or you can serve your country for a couple of years and buy your house with nothing down. ( VA benefits ). The interesting thing is that fewer Zero down homes are foreclosed on than homes with traditional 20% down payment.
They do 0% down loans now.........it's how I bought my house. Just takes a good income and good credit score.
As for the "how long to save question" in OKC, if I had no debt. I could live in my old fancy downtown apartment when I first moved here and fairly easily save around $2k/month. That would mean eating at home for most meals and stuff like that, but it wouldn't be difficult.
pheller said:I bought a $370k home that I put 20% down on. It's my only debt. My wife works part time. I never work overtime. I don't manage anybody. We do alright.
The neighbor behind me, the guy I bought my house from, recently bought a $750k 4-bed 2.5 bathroom house in a gated community. His old house behind me, is probably worth $480ish. It's been vacant for 6-months. The house across the street, which is the same size as mine, worse condition, sold for $410k, and its owners have only lived in it on weekends for the last 3 months.
EDIT: most of the homes in this neighborhood were built in the late 90's and sold for anywhere between $155k and $190k.
I'm advocating for a policy that would likely decrease my property value.
Conversely, there's a million dollar mansion in my neighborhood that has been vacant for a few years. Owner moved out and has been trying to sell but the property taxes are so brutal (like 40k/year Iirc, I'll try to grab the zillow link) that the property is worth almost nothing - even after you pay $1million, you still owe $4k/month to the govt, forever.
To make it worse, the property is up on a hill and well shielded from view by trees. So at the beginning of the year, some squatters moved in, and no one noticed for a month or two. By some ridiculous law, these squatters were there long enough to gain some defacto 'lease', and now they must be evicted through regular eviction process. But guess what hasn't been happening since March? That's right, evictions. This story is admittedly second hand, but comes from our friends who live a few houses away.
So this property owner is paying huge property taxes every month for some squatters to live in a mansion.
Regardless of the squatters, the point is that high property taxes kill the value of the property. And in some cases is the REASON that property is vacant.
Dunno if these links will work. And zillow doesn't do a great job with price and taxes since I think one or both of these might technically be double lots (ie you'd need to buy two properties and pay two sets of taxes).
I thought this was the house (3/4mil in 2006, struggling to sell for 1/2mil now, 20k annual taxes excluding any additional lots included in the property): https://www.zillow.com/homedetails/2640-Brassie-Ave-Flossmoor-IL-60422/4301691_zpid/
But I actually think the squatters are in the one next door ($400k in 1994! Not able to sell for close to half that now, 15k annual taxes):
https://www.zillow.com/homedetails/1720-Butterfield-Rd-Flossmoor-IL-60422/4301720_zpid/
In reply to yupididit :
I am saying prices will drop if lending is more restrictive. Free and easy money causes bubbles. If buyers with a $75k income can only qualify for $160k loan then there will be a lot less $300k houses and a lot more $160k houses. A lot of folks would not be too happy about their property values dropping significantly in this scenario. Local governments would also have to adjust their tax rates. Again, it is not rainbows and unicorns.
In reply to z31maniac :
That's probably why I like living here in SATX. Homes aren't "cheap" but my current situation I'm able to save $2600 a month without sacrificing my way of life. But that's because of a dual income household where bills are split right down the middle. If I get sent to the DC area then we can forget about that lol. Location is everything and unfortunately everyone can't pack up and move.
tester (Forum Supporter) said:In reply to yupididit :
I am saying prices will drop if lending is more restrictive. Free and easy money causes bubbles. If buyers with a $75k income can only qualify for $160k loan then there will be a lot less $300k houses and a lot more $160k houses. A lot of folks would not be too happy about their property values dropping significantly in this scenario. Local governments would also have to adjust their tax rates. Again, it is not rainbows and unicorns.
I completely understood that the first time you replied. But, I'm talking about the right now situation not the "if lending is more restrictive" situation. But yes, real estate prices goes down then the amount of taxes the county receives goes down which affects the schools etc. Property taxes is all we have to pay. No matter what someone isn't going to be happy. Like you said, it ain't all rainbows and unicorn farts. Lol
yupididit said:In reply to frenchyd :
Nah them VA benefits ain't worth serving just to buy a house or to get benefits. LoL do that because you really want to or have nowhere else to go. Unpopular opinion.
You also get a decent paycheck, room and board, plus free health care, Dental care, 30 days a year paid vacation, probably learn a skill or trade, college tuition, free life insurance, in addition when you hit 65 you get VA medical.
Yes some people wind up getting shot at, about 5%, most serve in support or technical jobs. Once past Boot Camp or Officers training it becomes either like college or a regular 9-5 job for most. Some Army and Marines not better suited ( or who want to ) become grunts. Ground pounders who train for combat. But Most Navy, Air-force, or Coast Guard, don't go through combat training.
In addition travel is very easy and often part of your duty. Airlines fly military for 50% of regular or free under orders. The military has countless flights to and from many places where you can fly free on a space available basis. Granted the planes are noisy and you eat box lunches but still free.
Finally A military career is a decent income, interesting career and when you've done 19 years 6 months you get full medical benefits for life plus 50% of your monthly income for the rest of your life. 75% if you do 30 years. At age 37 you are now near your prime earnings years and experienced. Private industry loves to hire former military with their training and discipline. Especially military contractors. Or you have preference for most government positions meaning you'll earn enough to double dip in the retirement income pool. That's on top of your social security. It's not all that unusual to retire with $6-10,000 a month income.
In reply to frenchyd :
Uh Airlines charge full rates flying on orders, why charge the DOD half when you know they'll over pay without blinking?
The rest of your post, you're obviously out of the loop. I'm currently serving and at 14 years so far. It ain't all rainbows and unicorn farts (I love this phrase).
There's a reason that even the Air Force can't hang onto their young talent, because civilian life is a lot more stable and a lot more competitive than it used to be. Military folks are leaving the service after their initial enlistment/commission like never before and its been a crises for the DOD for at least 5 years now. No amount of money and benefits are really helping either. Because those benefits and pay really don't compensate for the E36 M3 it comes with. If I was at 10 years I would've dipped, but at 14 I'm confident I'd stick it out for my last 6 but they will not get a day over 20 from me. I wouldn't advise young kid (especially a woman) straight out of highschool or college to join unless they want to fulfill some patriotic sense of duty or have no other options in life. I'm not even bitter; just realistic. I could go into more detail but this isn't the thread for that.
I wouldn't expect you to know all of that being how far removed from the military service you are. But thank you for serving!
How does making it harder for poor people and middle class wage earners who haven't had a considerable real wage increase in decades to get a loan, how does that keep the very wealthy from hogging up all the land and property in high demand areas?
It may reduce prices in undesirable areas where people are leaving, but it wont reduce prices in the areas where people want to live. Individual owners will just be replaced by large rental corps. Unless you restrict rental ownership in some way.
About big homes that fail to sell due to property taxes? Thats a sign of slowing demand and too high taxes.
In my area, everything that is listed sells quick. Even less than desirable homes. Undeveloped land is slow to sell, and people tell me this is because prices are too high and have been for years. Then we've got something like 20% of single family homes are not primary residences, but also not rented. Meaning vacation homes.
Would anything be improved if we limited or made more strict lending on non-primary residences and property, so rental companies without actual cash couldnt leverage and pull money out of thin air?
i dont think that happens though, does it? Buying huge rental properties or 2nd homes on zero down?
In reply to yupididit :
Let me clarify. The DOD does pay for the flight but not the serviceman. Sorry I tried to be brief.
As for Rainbows and unicorn farts( I too love that expression) no life is perfect and yes there are issues with a military life it's not perfect either.
It's just not all bad either.
Oh by the way I did 7 active and 2 reserve.
Let me put it this way. A military career has good things if you like those things. And bad if you don't. It was that way when I served and is still that way when I go back to San Diego and talk to my old squadron.
The Navy still has the best food because it's a morale issue and a source of pride for the cooks ( it's also the prime way to get promotions ) We also have cool bases. San Diego, Pearl Harbor, Rhoda Spain, etc etc Plus more planes than the Air Force. And well Ships ( please ignore Submarines where looking through a periscope is a rare privilege)
Just a general observation about the difference between the Air Force and the Navy. Since the Air Force split from the Army it's reasonable that the Air Force reflects the Army's approach. Everything is orders. A lot of those "orders" are based on dealing with draftees.
The Navy is more of a team approach. Here's what we're going to teach you and here's why you'll want to learn this approach. Plus Little things. We don't salute indoors ever. We don't salute on the flight line, or flight deck or in cars or well, we just aren't as big about saluting. I marched in training and when I volunteered for a drill team. Because going to New Orleans during Mardi Gras And local fairs and parades was fun. But 99% of the time we just walked where ever we were going. Or drove or flew etc.
Yes even back when I served the pay was better as a civilian than as a Sailor. If I ignored the benefits.
It got a whole lot closer when that was taken into consideration.
The one thing that caused me to get out of the Navy was I wanted to live on Lake Minnetonka. ( there isn't a Navy Base nearby)
yupididit said:tester (Forum Supporter) said:In reply to yupididit :
I am saying prices will drop if lending is more restrictive. Free and easy money causes bubbles. If buyers with a $75k income can only qualify for $160k loan then there will be a lot less $300k houses and a lot more $160k houses. A lot of folks would not be too happy about their property values dropping significantly in this scenario. Local governments would also have to adjust their tax rates. Again, it is not rainbows and unicorns.
I completely understood that the first time you replied. But, I'm talking about the right now situation not the "if lending is more restrictive" situation. But yes, real estate prices goes down then the amount of taxes the county receives goes down which affects the schools etc. Property taxes is all we have to pay. No matter what someone isn't going to be happy. Like you said, it ain't all rainbows and unicorn farts. Lol
One point you miss entirely is where the wealthy live. On a percentage basis our taxes are really low. When Every 50 feet of lakeshore has a multi million dollar property on it that community's tax rate is way lower than a community where houses are on bigger lots and homes not as valuable.
It's not free because we can afford expensive schools, police, firefighting, community services, etc. Our schools get a double benefit since most very high priced homes tend to be owned by older families where there are no children or they are grown and off to college or careers. But they do add costs.
However if you put my home in a typical bedroom community my taxes would be massively increased.
In reply to frenchyd :
Yeah, no need to further discuss this military topic. You're way behind. I forget discussions with you are only current to about the 70's no matter the topic you discuss lol
Enjoy your day Frenchy
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