I was surprised not to see this referenced up here? I thought it touched on some interesting points about home ownership as an investment or simply shelter and how the perception has evolved over the years. Clearly housing value in the city is simply a function of supply and demand with a heavy dose of psychology thrown in.Perhaps this describes all tradable markets? The house asset itself has no... [more]
I was surprised not to see this referenced up here? I thought it touched on some interesting points about home ownership as an investment or simply shelter and how the perception has evolved over the years.
Clearly housing value in the city is simply a function of supply and demand with a heavy dose of psychology thrown in.Perhaps this describes all tradable markets? The house asset itself has no intrinsic value other than what someone is willing to pay for it (and you live there); even a Miele washer/dryer and kitchen depreciates out of the box.
So we depend on demand to drive up prices and give us "return" and bubbles to make us rich (;
Seems the powers that be are working over-time to get the consumer head in a good state of mind, cheap money is not enough to create buyers out of thin air(like the fed does with money).
I am looking for a house in the burbs, one of my main concerns is the fixed monthly cost (mortgage). Then I worry about the variable rate of escalating taxes that I can't predict or control, I personally think property taxes are a sin (especially at $1000k a month for a hideous ranch in Essex County).
Land is where the value is, location for Manhattan?
http://www.nytimes.com/2011/02/06/business/06view.html?_r=1&ref=realestate[less]
Response by columbiacounty
over 15 years ago
Posts: 12708
Member since: Jan 2009
You bring up an interesting point about property taxes. Putting aside all the rhetoric and the endless blaming, the simple fact remains that at the current and reasonably projected level of property taxes, the idea of owning a home free and clear has become a pipe dream. Even if you pay off the mortgage you end up with an evergrowing monthly nut over which you as an individual have little or no control.
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Response by jason10006
over 15 years ago
Posts: 5257
Member since: Jan 2009
While housing bubbles are rare, bubbles in general are not.
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Response by Socialist
over 15 years ago
Posts: 2261
Member since: Feb 2010
I agree, taxes are insane. I think most peopel in Manhattan overlook them since they don't pay property taxes DIRECTLY. If they actually had to write out the checks or at least look at what the taxes are PER APARTMENT, they would be protesting much more.
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Response by marco_m
over 15 years ago
Posts: 2481
Member since: Dec 2008
i write a nice check every month. its called maintenance. and for my building, the largest componet of maintenance by far is RE tax. thanks
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Response by PMG
over 15 years ago
Posts: 1322
Member since: Jan 2008
Real estate taxes in NJ only look reasonable if you are getting services like educating your kids. Property taxes in NYC are far more reasonable because the city also has an income tax. Condo owners in NYC write their own checks for property taxes, something I've been doing since 1989. Trust me, you pay attention to the fairness or lack thereof of property taxes when you write your own check. The Department of Finance is getting a bit more transparent. About five years ago, I added up the property taxes paid by each unit owner in my condo building and then compared the total bill to those paid by certain luxury buildings like 740 Park Ave coop owners. I sent my analysis to some city politicians. Would you know, the Department of Finance now tracks the total taxes paid by building. To arrive at a fairer system, it needs to be more transparent.
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Response by Socialist
over 15 years ago
Posts: 2261
Member since: Feb 2010
the city property tax system is totally unfair. Peopele in POS post war buildings pay far more in taxes than brand new buildings with higher property values thanks to the 421-a abatement.
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Response by somewhereelse
over 15 years ago
Posts: 7435
Member since: Oct 2009
> Property taxes in NYC are far more reasonable because the city also has an income tax.
NYC specifically made the decision decades ago to push for home ownership by keeping taxes low. Bloomberg was the first mayor to bring some sanity to it... the 18% increase sounded crazy, but it was the only sane thing to do.
PMG, you are right abotu transparency. The way some buildings calculate is just totally nuts. The only way to fix is to make it obvious what folks are paying.
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Response by somewhereelse
over 15 years ago
Posts: 7435
Member since: Oct 2009
"Peopele in POS post war buildings pay far more in taxes than brand new buildings with higher property values thanks to the 421-a abatement. "
What alpo leaves out is, that is just temporary, and it created a lot of construction....
and the older owners actually end up paying MUCH less in taxes in the long run. In the end, they almost need those abatements to make up for the crazy taxes later.
See what some of the old co-ops pay.
Well, tough to do from New Jersey I guess.
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Response by Riversider
over 15 years ago
Posts: 13573
Member since: Apr 2009
I'm wondering if the city is losing out revenue from the mortgage recording tax due to refis. More and more lenders assign mortgages and then modify. This is not free money. Since the city has to fund its obligations the end result is the people who don't refi or don't have mortgages are subsidizing the ones that do and refi.
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Response by bjw2103
over 15 years ago
Posts: 6236
Member since: Jul 2007
"In the end, they almost need those abatements to make up for the crazy taxes later."
You bring up an interesting point about property taxes. Putting aside all the rhetoric and the endless blaming, the simple fact remains that at the current and reasonably projected level of property taxes, the idea of owning a home free and clear has become a pipe dream. Even if you pay off the mortgage you end up with an evergrowing monthly nut over which you as an individual have little or no control.
While housing bubbles are rare, bubbles in general are not.
I agree, taxes are insane. I think most peopel in Manhattan overlook them since they don't pay property taxes DIRECTLY. If they actually had to write out the checks or at least look at what the taxes are PER APARTMENT, they would be protesting much more.
i write a nice check every month. its called maintenance. and for my building, the largest componet of maintenance by far is RE tax. thanks
Real estate taxes in NJ only look reasonable if you are getting services like educating your kids. Property taxes in NYC are far more reasonable because the city also has an income tax. Condo owners in NYC write their own checks for property taxes, something I've been doing since 1989. Trust me, you pay attention to the fairness or lack thereof of property taxes when you write your own check. The Department of Finance is getting a bit more transparent. About five years ago, I added up the property taxes paid by each unit owner in my condo building and then compared the total bill to those paid by certain luxury buildings like 740 Park Ave coop owners. I sent my analysis to some city politicians. Would you know, the Department of Finance now tracks the total taxes paid by building. To arrive at a fairer system, it needs to be more transparent.
the city property tax system is totally unfair. Peopele in POS post war buildings pay far more in taxes than brand new buildings with higher property values thanks to the 421-a abatement.
> Property taxes in NYC are far more reasonable because the city also has an income tax.
NYC specifically made the decision decades ago to push for home ownership by keeping taxes low. Bloomberg was the first mayor to bring some sanity to it... the 18% increase sounded crazy, but it was the only sane thing to do.
PMG, you are right abotu transparency. The way some buildings calculate is just totally nuts. The only way to fix is to make it obvious what folks are paying.
"Peopele in POS post war buildings pay far more in taxes than brand new buildings with higher property values thanks to the 421-a abatement. "
What alpo leaves out is, that is just temporary, and it created a lot of construction....
and the older owners actually end up paying MUCH less in taxes in the long run. In the end, they almost need those abatements to make up for the crazy taxes later.
See what some of the old co-ops pay.
Well, tough to do from New Jersey I guess.
I'm wondering if the city is losing out revenue from the mortgage recording tax due to refis. More and more lenders assign mortgages and then modify. This is not free money. Since the city has to fund its obligations the end result is the people who don't refi or don't have mortgages are subsidizing the ones that do and refi.
"In the end, they almost need those abatements to make up for the crazy taxes later."
Can you give examples of this?