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Driving Up & Down Home Values: Spotlight on U.S. Homebuilders, California's Central Valley, Fresno, Clovis, Calif. Real Estate
Thursday, 9 March 2006
Real Estate Boom's Lowdowns
Topic: Property Values Up

Rise in Home Values Causes Headache to Homeowners: Rising Home Values = High Property Taxes

The Lowdown on the Real Estate Boom: Even the well-oiled homeowners are crying foul

Residents of very popular towns and cities have been suffering secretly for a long time now. They have seen a wrong that needs redress. They have seen their working-class neighbors get up, pack up and leave town. The reason is that these modest wage earners can not keep up with the rising assessments in property taxes they have to pay. For this group of homeowners, the American dream of owning a home can only be realized in another town or a completely different state. Around or after Christmas, the bills start arriving.

If you own a hot house, cabin or property in a hot real estate zone, then you may be hit by high property taxes. Such is the reality that many new homeowners have to face after all the buying euphoria dies down. The bills will come from the assessor's office. "What are you going to do?" asked a colleague. "If you don't pay up, you will run into trouble." From Lake Tahoe to the California-Nevada areas, coastal towns and to lakefront properties, the rise in home values over the years has only caused some headache for many people. In 1978, California's Prop. 13 did something about this property tax issue. Many other states have just be plagued with this problem. California's voters, through their initiative, placed a cap at 2 % until a property is sold. Local and state governments depend on the property taxes as their main revenue. They need the funds for schools and other local agencies programs.

Some groups of homeowners are doing something about this. Through citizen initiatives and lawsuits, they want to have a say in how their property tax is being spent. Groups such as the "Ax the View Tax" are leading movements against the taxing of people on intangible values and qualities such as a view or a specific location. Idaho lawmakers have eight bills before them on property taxes. One of the bills will revise the "homestead exemption" which is at $50,000 of a home's value off the tax bracket. The bill will boost it to $1,00,000. South Carolina caps the rise in property assessments at 3 percent until a home is sold. Greorgia's lawmakers support a 3 percent cap too. Nevadans are gathering signatures for their own initiative. Connecticut homeowners have been hit hard for their frontlake property views. They are doing something to correct the situation.

It is clear that something is not right. Homeowners are saying enough is enough.

HomeBoom Independent Data Systems

Posted by Fashionista Shopping Analyst at 2:24 AM EST
Updated: Thursday, 9 March 2006 9:37 AM EST
Saturday, 4 March 2006
Property Values Are Going Up. So Are Insurance Costs
Topic: Property Values Up

As town-owned buildings are going up in values, the city's coffers tend to suffer. That is what a lot of major metropolitan areas with hot real estate valuations are realizing. In one word, it is fair to admit that skyrocketing property values are driving up the cost of insuring some town-owned buildings such as schools and other public buildings. Here is a good example: Property values in Congress Heights, an older community in Southeast Washington, have increased 41 percent, nearly double the city's average, an indication that the skyrocketing housing boom has crossed the Anacostia River. The demand for affordable housing will continue to rise. A lot of people are going to be kept out of the affordability index. Even farmers will notice higher property tax values on their farmland. In many places in the country, agriculture land is assessed at its use value, rather than its market value. That means assessors factor in the land's potential for productivity when they figure taxable values.

People living in high-risk areas have to pay for more coverage. Homeowners find themselves paying increasingly higher insurance rates as more people flock to the coasts and insurers try to cut back on the billions of dollars of losses they've absorbed from previous storms. Many residents in high-risk areas have to buy separate hurricane or windstorm insurance on top of their regular homeowners' policies. Florida's homeowners insurance rates have increased more than 150% since the 165-mph Andrew, which caused $31 billion damage and stands as the costliest natural disaster in U.S. history. For many, additional costs become a burden. For those living on the coast and in Florida, itt's not the storm threat itself that's pushing them out, it's the soaring costs of insurance — $1,000 a year for homeowners, and an additional $2,100 for windstorm coverage, a bill that has tripled in the last five years.

Posted by Fashionista Shopping Analyst at 3:13 AM EST
Updated: Thursday, 9 March 2006 2:29 AM EST

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