The mythical “fixed payments” for home buyers takes another hit in 2008, as property taxes increase an average of 6.5% across the county.
The average King County homeowner will pay about 6.5 percent more in property taxes in 2008, mostly because of voter-approved increases and creation of new taxing districts, Assessor Scott Noble reported Thursday.
…
Countywide, voter-approved tax increases and creation of new tax districts pushed taxes up the most. “I think today’s citizen can look in the mirror and say ‘I voted for it overall.’ That, and new districts, is pretty much the story,” Noble said.Voters approved 24 of 31 tax measures in 2007, including 13 permanent “lid lifts.” Lid lifts allow a tax district to increase the regular levy above the 1 percent cap.
I generally elect not to vote on property tax issues, since I don’t currently own a home in King County, nor do I ever intend to (I’ll be in Snohomish or possibly further north). I do find it interesting that people are so willing to keep jacking up their home payments, even as the value of their asset stalls out and begins to drop. Maybe the tide will change this year.
Of course, even if the voters stop approving tax increases, I have a feeling that people in government will find a way to keep the money flowing without public votes as home values decline. Not to get too political, but I’m sure you recall Safeco Field or Seahawks Stadium.
(Keith Ervin, Seattle Times, 02.01.2008)
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Snohomish Co. 2008 property taxes are now online.
My lovely taxes increased 55%. If anyone would like information regarding steps to lower your taxes by challenging them, please let me know.
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Seahawks stadium vote passed, Safeco failed. Of course, in the Seahawk vote, Paul Allen was able to schedule the election for a date of his choosing, he outspent the opposition 23 to 1, and it barely squeeked by.
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When home values overall go down it won’t decrease any one’s property taxes. Property taxes are prorated across the total tax base.
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ITS SLAM DUNK YOU’LL WIN IF YOU CHALLENGE THE COUNTIES’ HIGH AND ILLEGAL PROPERTY TAX INCREASE FOR 2008
This is Fascism by the Dem/Reps we elected in our counties.
Get yourself an indepenedet appraiser ASAP [tell him/her why you're hiring them]. Document the over pricing error, then turn it in as the admistration on the back of the Fascist Property Tax Statement is all in error.
I doubt it will go to hearing, from what I’ve gathered lately, the county will fold to your wishes. Its slam dunk!
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Well, school and park levies are hard to say “no” to — if you don’t pay it in the form of tax, you’ll pay it as private school tuition. Now whether the money goes where it’s supposed to go…but hope dies last.
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“My lovely taxes increased 55%”
Holy s$$t! How the heck did that happen?
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My Snohomish County taxes only went up 1%, I was prepared for much, much worse
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If the assessed value of your house went up sharply, and your area appreciated faster than others, and there was a levy lid lift or two, I can see how that would happen
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The assessed values of homes in my neighborhood have actually been going down since I moved in. For myself, property taxes have also been going down (100-200 dollars) every year since 2001. It will be curious to see what the amount will be this year, since the assessed value is about 150K less than what the homes actually used to sell for.
-David
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Housing Meltdown
by Peter Coy
Friday, February 1, 2008
Why home prices could drop 25% more on average before the market finally hits bottom
As Washington policymakers struggle to keep the U.S. out of recession, the swirling confusion over the housing market is making their job a lot tougher. Will American consumers keep shopping or be forced to pull back? Will banks lend freely or be hamstrung by mortgage defaults? What are the best policy options right now? Those and other important questions simply can’t be answered without a good idea of whether home prices will rise, flatten out, or keep dropping….
….
http://finance.yahoo.com/real-estate/article/104340/Housing-Meltdown
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One more reason to rent…
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The assessed values of homes in my neighborhood have actually been going down since I moved in.
I’m sure it’s nothing personal, David. ;)
I poked around the KC assessor’s records online. The taxes for our house have been fairly steady for the past 3 years. I think they even went down from 2006 to 2007. 2008 charges won’t be online til 2/15. We’ll see what happens then. Happy belated Valentine’s Day!
Y’all did pick up from that Times story that the tax rates per se went down, right? The average tax bill went up because property valuations were higher. Makes me wonder how much of that is because the tax base has been broadened by all those infill development houses, high-density townhouses, and condo conversions.
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“one more reason to rent?”…My rents continue to increase sharply in between tenants. I have no problem keeping my rentals full all the time. Any increases in taxes yearly is always trumped by my increases in rental rates. I also love the tax write offs on all the homes not to mention the interest paid, expenses, and other fees.
I’m sorry but I do NOT subscribe to any belief that here in Washington its better to rent. Except of course in El Paso the Taxes are 3% of the value of the home. In areas such as this then rent galore!
Find that property, grind that price down, and secure a GEM. They are out there but for me I continue to place my money South. Homes 40-50% off are hard to ignore.
Ray Pepper
Broker
http://www.500Realty.net
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“I’m sorry but I do NOT subscribe to any belief that here in Washington its better to rent.”
That really is because you need to look at it on a case by case basis, and can’t make such a blanket statement. My personal example:
-My annual rent is below my standard income tax deduction, so I will call that “subsidized or free” for that matter.
-I live and work in Kent at a coporate HQ; to buy here would be at least 2x to 3x my rent, in possible flood plain or uncertain insurance situational time.
-I live 3 miles from work and have NO commute expenses.
-I am able to save 30% of my salary pre-tax in a 401K and monitor this closely where I at least gain a 4-18% annual return by shifting investments.
If your rent is sharply increasing between tenants that must also mean either your tenants income is going up, or their IQ is going down?
“Find that RENTAL grind that price down, and secure a GEM. They are out there but for me I continue to place my money South. RENTALS ANY % off are hard to ignore.”
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Of course its case by case. The fact is many (maybe you) will not be able to buy now. Tighter lending standards and deteriorating credit will make more and more people renters. That is great for the property owners. My last home I placed on the market in North Tacoma for 1200 I had over 30 calls in just 3 days! I picked a nice RN who had a divorce and credit was poor. Rent 1.5 years ago was 1000.
You maybe the exception but as a rule picking up some of these homes at 40-50% off in Nevada and 20-30% off here through foreclosure and short sales are becoming very profitable for many. Keep an eye on Puyallup my friend. We just sold 2 off that were 290k 1.4 years ago that slid through us at 195 and 200k.
Educate yourself Washington! And find the Gems! There will be many over the next 5 years!
Ray Pepper
Broker
http://www.500Realty.net
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Ray Pepper’s comments always remind me of how much I miss those TV ads back when Cal Worthington had a dealership up here.
“Here’s Cal Worthington, and his dog, Spot!”
(cue banjo)
http://www.youtube.com/watch?v=dOCNphyw2OE
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I remember those!. Loved it. I think I saw Cal at Costco in Gig Harbor yesterday. A far more enter entertaining U Tube video is the 500 Realty one. Turn up the volume real loud and listen to it about 30x.
Hear the subliminal message? I hope so we paid Comcast extra for it!
Ray Pepper
http://www.500Realty.net
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That 500 video is too funny!!
http://www.youtube.com/watch?v=3_Z3LucrHOg
love the money flying!!
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Johnnybigspenda –
So what you’re saying is that if you challenge the assessment, you’ll get it adjusted?
Yeah, that definitely sounds like fascism.
I’m so tired of barstool anti-government blowhards. I’ve lived overseas, and let me tell you, we have it incredibly good. Especially in the Pacific NW. Local government that’s accountable, bureaucrats that answer phones, government web sites with all the information about properties, etc. at your fingertips… it’s the farthest thing from fascism I can imagine.
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OOps — sorry, Johnnybigspenda. I mixed up your comment with Software Engineer’s. My bad.
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“You maybe the exception but as a rule picking up some of these homes at 40-50% off in Nevada and 20-30% off here through foreclosure and short sales are becoming very profitable for many.”
The rain and mist in the PNW must really be depressing if you are speculating in Nevada and think you’re winning.
I doubt many of the deals in NV will cash flow or show capital gains for years. Of course, some will, but not “many.”
BTW, didn’t we get Ray to agree to only post his signature once per topic?
——————————————-
Incessant_din
Bitter Non-renter
East Bay Area, California
Thinks Trolls are Sometimes Good for a Little Entertainment, and Worth Occasionally Feeding
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I have to agree with Olaf, having worked in the People’s Republic of China, most Americans have no clue as to how good we have it.
Imagine having all your email looked at, web surfing monitored, telephone calls tapped, and people break into your house leaving the lights on and a big juicy surprise in your toilet to let you know they have been there. Then come home, turn on the news to watch huge sections ripped out because the people in Beijing didn’t agree with what was being said.
And the ACLU complains about civil liberties every time someone’s feelings get hurt… Sorry rant off….
Anyhow, 25 percent off current prices is a joke. Some areas in California appreciated at over 120 percent and are down only 15 percent… This thing is just getting started… 25 percent will be merely a warm up.
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“one more reason to rent?”…
I’m sorry but I do NOT subscribe to any belief that here in Washington its better to rent.”
This isn’t about belief Ray. Tell me what your assumptions are for a person buying today, and plug them into the rent vs. own calculator below. Make sure you tweak it for an average annual stock market returns of 11 percent:
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?ref=patrick.net
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Great link George. I will play with that for awhile. But, please remember the homes I personally buy are greatly discounted to the point where you can throw the calculator out the window. The new homes in Reno for 180k were over 300k. They lease option for 1500 a month. The conditions are spectacular for investors. Here in Washington there are gems that I assure you are stellar as well. But, they take time and effort to dig up. We still need more blood shed in the PNW but the economy is robust. The investors I have worked with here keep finding tremendous deals. I know this because I keep writing them up.
Like I said over and over again. Take your time. Conditions WILL continue to tighten and there will be many opportunities down the pike.
The rent v own is actually a non arguement for me. As for the stock market I have traded in/out of stocks for years. Actually did quite well with my Ameritrade acct. I currently accumulated just 1 holding. 56k shares of EGHT at 1.01. I’m up about .20. The stock market for me has always just been for spare money. Were getting pretty close to my strike prices and most likey I will be out of EGHT on the next Gap up. I always put my real money to work in what I know. OOPs I also had bought 4400k shares of WM at 11.90 and sold it at 16.53…Ah well. Still a profit but sold too early.
Ray
http://www.500Realty.net
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(probably off topic, but could not help myself)
Hey Ira – check this out. It appears to be a townhome, but the MLS listing seems to have the acreage of the complex there (the description even mentions that there is a complex, and it is marked as a townhome).
Should a reasonable person expect that the property is on 2.32 acres? I am curious to hear your opinion.
MLS: 27208609
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That’s not uncommon for the lot size of a condo/townhome to be the size of the complex.
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If you tweak it like that, you’re not comparing apples to apples. The risk of the stock market is way higher than the historical risk of house values. Plus the stock market has returned only 5.1% annualized since Oct. 1928. Why invest there, where your returns might be negative over a decade or more, when you can get 3-4% for far less risk?
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Ray, I hope you didn’t discriminate in any way …
“My last home I placed on the market in North Tacoma for 1200 I had over 30 calls in just 3 days! I picked a nice RN who had a divorce and credit was poor. Rent 1.5 years ago was 1000. ”
choosing a bad credit person doesn’t mitigate discrimination.
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All that happens in the US too, except here they don’t let you know they searched your house, or else it wouldn’t be a sneak & peek. The US gov’t records & scans all communication through typical electronic channels (phone, email, fax) between the US & international, and probably domestic communications as well. They’re working on adding forums like this one to the list.
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“choosing a bad credit person doesn’t mitigate discrimination”
Good Lord. I picked the Best applicant, with the best references, best down payment, and best rental history. Many of our tenants have credit issues. Maybe thats why they are tenants. Imagine that. And guess what. More to come! Deteriorating credit around the nation and tighter lending standards will make home OWNERS very profitable landlords.
Go ahead and play with your 12% profits in the stock market. Like I said the stock mkt for me will always be play money. Not that I want to lose it but I can never trust any of those CEO’s. I only trust my own judgement and finances. I also trust I made a good call on my 56k of EGHT. So far so good, upgrades galore, cash on the books, positive earnings…blah blah blah..then monday..BAMMMMMMMMMM you get kicked in the head with some patent suit and 1/2 the value is gone! I’ll stick with real estate!
http://www.500Realty.net
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Ray,
Sorry I was responding to this comment:
“I’m sorry but I do NOT subscribe to any belief that here in Washington its better to rent.”
The rent v. buy calculator gives you the cold hard facts.
Whether the properties you’re selling today in Washington State are bargains depends on your assumptions. If the market drops 28 to 35 percent in the next 3 years, for example, it’s hard to see how many investors here will be coming out ahead short term.
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agreed..if the mkt drops 35% most of my investors HERE will be hurting!. In Nevada they will still be OK. ( they are already down 40% and more).
http://www.500realty.net
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“One more reason to rent…”
It just gets passed on to the renter. I rent and its happened to me.
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Ray,
28 to 35 percent. At the very least, renting looks like a very cheap insurance policy.
We’re seeing predictions now in the Seattle papers that prime locations will drop 5 percent in 2008. These are the same folks who predicted a 10 percent rise or more in 2007…
How will their real estate forecasts be revised if and when it’s clear we’re headed into a major recession in 2008-2009?
How many real estate investors are going to want to gamble equity in an unstable, falling market over the next few years?
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Markor,
The government executes a very small amount of FISA/Patriot Act sneak and peak search warrants. They still have to have the warrants signed off on by a federal judge, and the warrant still has to have probable cause and adhere to the fourth amendment.
In China, there is no such thing as probable cause. They can come and go as they please without having to go through the judicial system like here in the U.S.
I know for a fact that the government does not “scan and record” all international communication. They scan a limited amount of communication between certain foreign nationals living within the U.S. who are communicating with people outside this country.
And to quote Ardell, the G could give a RA about Seattlebubble.com.
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Did you all see the article about rising rents in the Times today? Up 8.4% in Seattle in 2007…. Ouch. Looks like renters don’t get the luxury of “fixed payments” either.
More anecdata on fixed payments: when our refinance goes through, we’ll be paying $400/month *less* than we did when we bought the house nearly 2 years ago. Appreciation and improvements let us drop PMI after a year, now a drop in rates is lowering the monthly outlay again.
In that context, a jump in property taxes isn’t too threatening. For our house, a 6.5% increase in property taxes would work out to about $12/month.
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“Did you all see the article about rising rents in the Times today? Up 8.4% in Seattle in 2007…. Ouch. Looks like renters don’t get the luxury of “fixed payments” either.”
Sigh.
We seem to be having that “rent vs own” debate again. Once again, I feel obliged to state that there are not just two options:
1) Rent now and forever.
2) Buy immediately, because renting even for a short time is stupid.
The mystical third option is:
3) Rent for a period of time during which you believe (and observe) price declines. Then, with less debt and/or more down-payment, buy a house once you feel comfortable with the market and prices.
I’m sick and tired of this polarizing debate over rent vs buy.
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I agree with Notabull. Right now rents are rising just as home prices are dropping, but as a recession deepens, rents may stop rising.
But the real estate market is not static, it goes through cycles as many things do, and there are times where it may be better to rent ( like right now?) and there are times where buying has advantages ( like a few years from now?)
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Go Giants!
I guess I agree with both Notabull and Ira. There should be no debate. If you plug reasonable numbers into the NY Times calculator renting is the obvious option.
The debate is the key issue for many people. Take the owner nearing retirement who thinking about downsizing: the smart ones will be looking at the numbers carefully. Anyone thinking about buying (or selling) in a flat (or declining) market need to look at the crazy rent vs. buy ratio. It matters a lot.
This brings us to Angie who is right: Rent is up in 2007 and for folks being forced out of Seattle this is terrible news.
It’s happening though because the market is crashing and people realize rent is still at a ridiculous discount. To put it in perspective rents are still barely keeping up with inflation since around 2000. Also, with a recession headed our way, it’s hard for me to see rents going up much over inflation in the years ahead.
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Another reason people buy rental properties is to lower their income taxes or for tax shelter.
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….but most of the homes for sale right now don’t pencil out for purposes of renting. Sure, there are some bargains out there, but most homes you’d buy to rent out would cost you hundreds of dollars extra per month,
even with lower interest rates because mortgage payments with 20% down are still significantly higher than rents received.
If house prices continue to fall, and rents continue to rise, then it might be a great time to buy a home and rent it out.
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I’m not advocating one or the other, or trying to debate anything.
Tim led this article with a poke at the idea of fixed costs of homeownership. I had been mulling that over while reflecting on our own changing situation (where those fixed costs have indeed been “mythical”, though not perhaps in the way he expected). Then came a story in the media that looked at how things were shaking out in the rental market, which is an issue folks have been speculating about here lately, too.
So much for trying to contribute to the conversation.
Have fun dancing with that strawman, notabull. Been a while since he’s been pulled out and I’ll bet he’s enjoying the attention.
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I read that article on renting as well as laughed harder than I have in some time. I don’t know where they came up with those numbers but I rent at $685 for a one bedroom which is plenty for me and my rent went up $50 from 2007-2008 per month.
I noticed in the article that they looked at something like 150,000 rental units to come up with that rent increase number, and given the Seattle area’s number of complexes plus other Craig’s list rental units, I am not sure that’s really an accurate snapshot!
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50 / 685 = 7.3%. Not so far from 8.4%.
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685/635 = 1.079, meaning a 7.9% increase in that particular case. So, even closer to 8.4%.
Rents are up almost everywhere. Anecdotal stories of constant rent are nice, but it doesn’t tally with the broad picture I’ve heard from friends that rent, including my own experience over the years.
You have to expect rents to catch up a bit after all the stagnant and declining years. I remember leaving a rental in 2003 to go and buy a house, and the landlady couldn’t rent it for the same amount I rented it for just earlier that year. That was when the housing market was just starting to really heat up.
Now, she’s back to the rent level I paid plus a little more, which doesn’t exactly add up to a massive annual increase.
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Any individual renter will usually see lower than average rent increases, because the big jumps occur between tenants, when the owner does renovations.
I don’t see why notabul is tired of the rent vs. buy discussion, because that is the heart of the matter. There is also a fourth option: buy and rent out a place. That fourth option is the way in which rental units come into being. Right now that option is not very economical, and that is why rents are going up. Once rental and owning balance out again, prices will stabilize and sales will jump back up.
Recessions typically last only a few months before things pick up again (unless some socialist gets into office and starts up new welfare programs that can drag it out into a depression). So I don’t think they will have too much of an impact on prices, although sales volume will be low during a recession.
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The current or upcoming recession is likely to last far longer than a few months. Wars cost far more than welfare programs.
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