Entries Tagged 'Midwest' ↓

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Prince Williams County is facing the problem that most counties in boom areas are facing. They have spent themselves into a corner and as property values have stabilized or lowered, their reckless spending on projects to get themselves re-elected is coming back to bite themselves in the proverbial behind.

The problem is that the once-booming housing market started backsliding in 2006, resulting in lower home values and thus less tax money for the county.

As they prepare the budget for the coming fiscal year, supervisors and budget officials have been faced with two basic options. If the tax rate stays the same, residents will pay less in taxes this year but the county will have to cut more than $22 million in spending. If supervisors raise the tax rate, they could patch the hole in the budget, but residents will pay more in taxes.

The answer, they decided, is to lower tax bills and make the spending cuts.

Hmmm. I wonder if these politicians had to deliberate so hard when property values were rising quickly and they provided a yearly tax increase without having to make a decision. Do you think that instead of taking on projects that were aggresive the county should have kept taxes down to begin with and provided just the basic services they are required to do?

“Assessments have dropped significantly and people know that the values of their homes have dropped and they’re going to be expecting some tax savings,” said chairman Corey Stewart (R).

So Corey Stewart is now figuring out that homeowners (voters) are not stupid and do not like to be insulted.

Stewart argued that when assessments were on the rise, residents accepted that their tax bills would go up too. Making homeowners pay more taxes both when their homes are worth more and when they’re worth less would hardly be fair, he said.

His colleagues agreed.

“They are looking for some kind of tax relief,” said Supervisor Maureen Caddigan (R-Dumfries), adding that the situation is “very very gloomy.” via Times Community Newspapers

Gloomy? C’mon. So you have to cut budget items, and that is gloomy. How about the homeowners who have lost value in their homes, are they thrilled? Champagne popping all over the county? You are the morons who overspent expecting the golden goose to keep on giving with 20 percent property appreciation. If these local governments had foresight instead of greed, they would be much more effective for there constituents.

Somedays it completely amazes me how we can elect people to handle our money who are so utterly clueless with it. I know that if your financial advisor had so little sense they would not be handling your money for long.

Want to know how to beat the lowering of property values? Build your home on farmland and let the federal government subsidize your property. You do not even have to be a farmer to capitalize on the subsidies the government is handing out like Costco snacks at an open house in San Francisco.

Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.

Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual “direct payments,” because years ago the land was used to grow rice.

Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.
Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.via the Washington Post

We have all seen the property value on the coasts run up drastically over the past 5 years. During this same period, the Midwest has shown anemic property value increases. Kenneth Harney writing for the Columbus Dispatch is thinking that as the coastal regions cool down or lose up to 15 percent of their value, the Midwest may see some distinct appreciation on property values.

Equally important: The major heartland markets are nowhere near their home price growth limits, based on Cagan’s examination of household incomes. Beyond that, in Cagan’s view, many of the heartland metropolitan areas “are basically very nice places to live and work. They’ve got good schools, lots of parks and open space, plus you can afford to buy a home.”
Those qualities could accelerate population movements: Families and companies in high-cost, high-tax cyclic markets might consider relocating to more affordable interior areas of the country with solid economies and pleasant living environments.
Cagan thinks federal tax policies could support the trend as well. He envisions homeowners in equity-fattened but highcost cyclic markets cashing in their appreciation gains and putting their $500,000 tax-free gains into real estate in more moderately priced markets.
The bottom line: Understand where you are in the market cycle and adapt. Slower appreciation shouldn’t hurt cyclic markets; to the contrary, it should allow incomes to catch up to home prices. Improved affordability will help get the new cycle rolling again.  via The Columbus Dispatch

Rochester, New York, is a typical real estate community in the United States. As opposed to the overheated markets of Boston, New York, Long Island, Florida, and the California coast, Rochester has seen a busy market over the past 5 years but not an unrealistic market.

For many in middle America, the talk of housing bubbles and loss of appreciation is confusing. We have been enjoying our 4–7 percent  increase in property values annually, seen periods where inventory is low and it is harder to find a home, other times it looks like every one is selling at the same time.

Rochester illustrates in this article by the Democrat and Chronicle that there are fluctuations in the marketplace, but for the most part it is a stable environment.

And even though the statistics for 2005 broke all records for sales, volume and median and average price, many real estate agents are readying themselves for a more challenging year.
That will mean longer listing periods, fewer purchase offers, and far fewer bidding wars — even for prime real estate in the hot market areas.
“For five consecutive years, my job was not selling property,” says agent Mark Siwiec, who works out of the Re/Max Pittsford office. “My job for five years was creating bidding wars and creating for my clients, my sellers, outrageous valuations for the sale of their property.
“Now we’re back to the basics. We’re back to how we are going to very aggressively, very methodically and very scientifically market this property for as many buyers as we can. And that started last spring.” via Democrat & Chronicle.