House worth less? Good.

[Broken Arrow]

A short and easy-to-read article that serves as a good cold shower for those that are still drunk and hung over from partying with their equity card.

Article

[davlat]

Thanks for the article... It is pretty sad news for some but has truth.. I always believe that if the value does not come from its own usefulness, there will be payback.

Some facts that I strongly agree
"..rising house values added trillions to our sense of national wealth, but it is an illusion".. Yes we can't export to another country

"..when we do not even guarantee basic health care, it would be nuts to think about making protection against real estate losses part of the social safety net."
Yes.. Save people to increase demand for real estate...

[MoneyHoney]

Interesting article. Where were all the "experts" during the height of the housing craze? Most of them were wildly optimistic about the housing market.

Housing, like everything else, is subject to the laws of gravity.

[MonkeyMama]

I saw this in the SA blog and thought it was great.

Let's put it this way, our house doubled in value in just a few short years. So our insurance costs double? The idea of making a lateral move means our property taxes double? The only people profiting are those retiring/downsizing (As the article states) and people moving from high COL areas to low COL areas. No one else is served by high housing prices (well besides the industry - realtors, mortgage lenders, etc.)

I honestly would love it if values fell significantly. Would cut my costs as a homeowner.

We are just lucky since home prices in Cali have always been insane that property taxes are rather capped. But we had no idea when we moved here that in just a few years a lateral move would be completely out of the question with property taxes (would be based on purchase price of new house and makes it an unaffordable move).

I just had to add one thing - I always found it odd when people call homeowners greedy for taking market value on their home. Oh come on, who wouldn't? IT always aggravated me though as we were looking to make a lateral move last year. It's like, um oaky, so I have to lose $100k in housing affordability because you don't want me to be greedy? I want to buy another house too! We already did the buying a home in an insanely expensive market thing - and you want me to start all over? But I see too much the sellers painted out to be greedy bastards. Few sellers are really downsizing and dropping out of the market. So it's just better for almost everyone when things are more affordable.

[Aleta]

I also wonder how this affects those with reverse mortgages. Weren't they also looking at their houses value or is it contingent upon their equity in the house? I saw that ad the other day and wondered how that would affect those people with a reverse mortgage.

[Ima saver]

It really doesn't matter to me that my house is considered worth less than it was a year ago. I can still get a good price for it if I wanted to sell it.

[Aleta]

Some where I live are complaining that their houses are worth alot less now yet the property appraiser's office hasn't taken that into account and is of course raising it. One guy said that his West Palm Beach property taxes went down and his further south property taxes didn't.