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Housing Prices

Jenkins

By Jenkins
in Providence

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urbie Whistle-Stop

urbie

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Unfortunately, there's a pretty bottomless pool of people in the world who are willing to work for whatever they can get- People sell their children into indentured servitude so they can come to this county. Given this, I don't think the market is just going to "correct itself." Greed and deperation skew the whole "fair market" idea.

I'm not going to get into a big argument about it, but it seems like officially letting businesses pay as little as they can get away with is just officially condoning a feudal system and removing any protection the most vulnerable people have. We have responsibilities to establish minimum standards of treatment of workers, including minimum standards of acceptable pay.

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jencoleslaw Town

jencoleslaw

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now, this is the sort of thing i don't understand, because clearly, all this development has had a positive effect on the housing market, what with it increasing, like 300 percent, so naturally when there's a revaluation, the taxable amount will go up, so how can ANYONE say that development will lower taxes?

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Divot Unincorporated Area

Divot

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now, this is the sort of thing i don't understand, because clearly, all this development has had a positive effect on the housing market, what with it increasing, like 300 percent, so naturally when there's a revaluation, the taxable amount will go up, so how can ANYONE say that development will lower taxes?
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pete11 Whistle-Stop

pete11

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The price appreciation doesn't come from new development. If anything new development lowers prices from where they'd be without it. And as new properties are built more people are paying taxes spreading the overall burden over more people. Obviously government spending will also increase to provide services to an increased population but I'm guessing it's at less then a 1:1 rate.
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runawayjim Metropolis

runawayjim

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Maybe reread both posts, and stop trying to build a straw man so you can make me out to be an antagonist. You said more units means increased population, which would only be the case if they became occupied, and those people didn't come from the existing tax base. I was arguing neither for or against your point, only stating a fact. Why don't you try to state your ideas without trying to become inflammatory.
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Divot Unincorporated Area

Divot

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Maybe reread both posts, and stop trying to build a straw man so you can make me out to be an antagonist. You said more units means increased population, which would only be the case if they became occupied, and those people didn't come from the existing tax base. I was arguing neither for or against your point, only stating a fact. Why don't you try to state your ideas without trying to become inflammatory.
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jencoleslaw Town

jencoleslaw

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ok, so bear with me because i'm a dope about numbers, but we hear a lot about how new construction and development will lower property taxes but I have never seen evidence of that. All i have ever seen is the revaluations going up up up up up and even though the mill rate sometimes goes down, most people are in fact paying more to keep their homes. I know when i owned my home, more than 1/4 of my mortgage went to taxes and that was before the reval. Is that normal?

I guess what i'm asking of you numbers cruncher dudes is some actual evidence that shows a community's residential taxes going DOWN because of a walmart in town or something. Because, frankly, in the absence of such evidence, (that i can understand) i'm going to continue to assume that it is a pipe dream that big box retail and the like makes people's taxes go down.

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gregw Hamlet

gregw

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I guess what i'm asking of you numbers cruncher dudes is some actual evidence that shows a community's residential taxes going DOWN because of a walmart in town or something. Because, frankly, in the absence of such evidence, (that i can understand) i'm going to continue to assume that it is a pipe dream that big box retail and the like makes people's taxes go down.
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TheAnk Hamlet

TheAnk

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Hey, what I'm saying is this.. If the CPI and wage stats are true, why does quality of life diminish over time? Why does a house cost 300k, that used to cost 5k?? Why do families need 2 incomes when before, they needed one.. The GOV would like u to beleive QOL has increased, but it has not.. Every day, your dollar buys less... And the GOV is genius in the fact that if it is slow enough, no one will notice..

I find it fascinating that people really buy in to the "better every day" GOV theory.. It makes me sad,..

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pete11 Whistle-Stop

pete11

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http://economist.com/finance/displaystory....tory_id=8424086

Someone in here didn't understand the correlation between hedge funds, private equity firms, and housing prices. This should show you how. It also paints a timeline for the undoing of the subprime marketplace 03-06. I've been told that 05-06 BBB- paper gets as much love as Kevin Federline. Remember most of this paper is on a 2/28 schedule, and the resets are coming. I would put the % of these loans in some of the areas discussed here at about 90% (Jerry any anecdotal numbers?).

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Dozer Whistle-Stop

Dozer

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I've noticed that much of the focus of this forum regarding affordability of the recent luxury condo boom in Providence is based on income. No one (as far as I have read) has mentioned equity.

The market has softened. That is obvious. I am a mortgage underwriter and am lucky to have a job. However, the market is cyclical, and will come back, especially in New England. New England, more than any other region of the country, is vulnerable to radical spikes and troughs in the housing market, due to our limited land availability, and strict land-use regulations.

However, as is also well known, there is a large number of aging baby-boomers (now empty-nesters) with little or no liens on their existing homes, and a whole lot of equity. Though many of these baby-boomers will either move south or remain where they are, a significant number are selling their homes, liquidating their equity, and moving back in to the cities.

In the metro-Boston area, we see how ridiculous housing prices are, even in this downturn. If you can sell a 1950's 2 bedroom ranch for $800,000 (and I've seen the appraisals come across my desk), that's one heck of a down payment on a $1,000,000 condo in downtown Boston. That leaves a mortgage of $200,000, which, at prevailing interest rates (of about 6.00% as of today), would give you a monthly payment of approx. $1200/month not including taxes and condo fees. This is easily affordable by two 50-somethings, albeit still working.

The only wrench in this is that homes are not selling. This, in turn, has decreased the demand for luxury condos. We are seeing a market correction, and this is good. Once supply and demand approach equilibrium once again, the cycle will restart, and everyone will be honkey-dorey.

And let's be grateful for this. The more baby-boomers who move back in to the city (or south, though preferably to the city), the more supply there is for us young-ins trying to purchase and start a family of our own. This is a necessity in New England. We can not build new like other regions of the country. The more people we can get to move back in to the city, the better our overall housing market will be.

This same basic principle is true for Providence. I think now is a phenomenal time to buy - I will be buying my first condo (close on 1/15), and was able to knock $20k off of the asking price. The seller didn't even counter-offer. As long as the condo comps-out ok on the appraisal, I'll be a home-owner a month from now. I'm not looking to flip the property, and I know that, if I am to make a sizable profit from selling the condo, I will need to retain it for at least three years, likely more. In the short-term, the large number of high-end condos coming on the market will hurt the demand for mine (and thus the value), but in the long-term, properties are valued by comparative sales in the area. The higher the sales price, the higher the overall value. I think we are just beginning to see the demand for housing in the city. Just the beginning! As the population of empty-nesters increases dramatically in the coming decade, the demand for downtown luxury living is only going to increase. I am very secure in my purchase, and I think others should be as well. As long as you look at the market on a long-term macroeconomic level, you should have nothing to fear.

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runawayjim Metropolis

runawayjim

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Providence was retarded by the corruption and other "activities" by the crooks in office when other cities saw a rejuvination, I guess the 70s? So I think PVD was artificially held back.. Only now, perhaps 30 years later, is the big, smart money moving in.. It apparently took that long for business to "trust" Providence..
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