Nov26
Death-Spiral States
on November 26, 2012 at 8:04 amUnfortunately, we own a house in one. I’m wondering if we should sell while we have equity, and rent as long as we continue to live here. I wish we’d done that in Florida a few years ago.
Unfortunately, we own a house in one. I’m wondering if we should sell while we have equity, and rent as long as we continue to live here. I wish we’d done that in Florida a few years ago.
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The whole article makes no sense to me. Property taxes aren’t the only factor influencing property value. Environment, crime level, access to services are much more important factors. I still think it makes more sense to lease rather than sell a house. Especially given that housing prices have gone down since 2008 and still haven’t recovered. But they will. It may take a decade but it will happen.
Property taxes aren’t the only factor influencing property value.
The article doesn’t say they are.
It’s California. It ain’t gonna get any better, and will surely get much worse. If you can get a decent price, sell!
With all the urgency of a scream queen, Barbara warns them to “Get out…while you still can!”, but the Blob is spreading. You can run, but…
I think the rebuttal “But California does that” will kill a lot of these moves.
If you have a mortgage, it might get inflated out of existence if you hang on.
That only works if you have a fixed mortgage. We’re trying to get one.
You’re long CA real estate with a variable mortgage? Dude, you are SCREWED if you hang on. Do you have any idea what will happen to mortgage rates if Bernanke successfully re-inflates the economy? Remember that the Fed rate tracks inflation minus a few points.
Uhmmm… well that isn’t good. I would get a fixed rate mortage ASAP.
Austin is booming. I visited in October and there was lots of new development. It is still weird, but that’s probably perfect for California transplants. Just can’t fit the entire population of California in Austin, unless it grows north to Waco. I say north, because San Antonio is like San Diego, too many military types for the Northern SoCals and NoCals.
It makes sense. In Austin there are no state taxes and there is a high tech environment with lots of businesses in the area. If I ever moved to the US it would either be to California, Austin Texas, Raleigh North Carolina, or one of the more arid states where wages are low but living costs are lower.
However things would be different for Rand since he’s in the aerospace business. The hubs of activity are somewhat different since for large scale manufacturing you are more interested in places with lower land value costs or access to bulk transportation by barge or rail. Since he’s married the optimum place to be may change again depending on what his spouse does for a living.
The rental prices in our area of CA have been climbing, which might mean that other people are thinking the same as you (I certainly am, but there’s no point in trying to convince my wife to sell).
California is likely going to end up bimodal–lots of rich, lots of poor, very few in between. I expect that houses in preferred areas are going to retain or even increase their value, house values elsewhere will collapse. My guess is that my house isn’t in a good enough area. Maybe I’ll have paid off the mortgage before its value goes to zero, which ought to make the bank happy.
Well, we are near the coast in a good neighborhood, and our prices are probably going to hold up, which is why we don’t sell, at least right now.
Sir, genius lies in leaving the party before it gets to be too late. By the time you notice your values decreasing, it’ll be too late to punch out.
Don’t ask yourself if things are getting worse, ask yourself if there’s any possibility if things getting any better…
I agree. Every bubble is a matter of timing. I think that the coast will be the last to go. You said yourself that preferred areas would be OK, at least for a while.
We have to hold on for another couple of years (actually, a little less, for reasons I don’t want to go into), but I think we’ll be able to do that.
Things don’t have to get better, depending on the neighborhood. If the cut-off line for how rich you have to be to be able to afford to live in the area is low enough, Rand’s house may continue to appreciate in value.
Any theories on Alabama and Mississipi being in the top ranks? Someone asked that at Althouse comments, but only one person (me) offered a theory: widespread poverty, as signified by a lack of booming commercial centers. YoungHegelian says this isn’t true of AL:
I do know of one particularly municipality in AL – Prichard, AL defaulted on its pensions in 2010.