Fortunately for homeowners. builders etc., this is is only a median.
The median price of new single family homes has plunged ~20% since the height-of the bubble.
Some people are saying "so if you bought at the height, with 20% down, you’ve already lost your entire investment. → Not so. Why? because a falling median price also includes the fact that smaller homes are (finally) selling.
(Like in the 70s when people switched from owning gas guzzlers to owning VW Rabbits.)
That said, the rate at which median prices are falling is unprecedented.
(Chart below includes both resale and new construction)
I would note that a number of States, such as Florida, strictly limit assessment increases on homesteaded personal property. Florida I think limits it to 3% a year.
That means if you have been homesteaded for several years, your assessed value will be far below your appraised value and thus your taxes would be far lower.
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1) The first thing to notice is that (as a tenant) 22% of some guy’s monthly rent is going to pay property taxes. Imagine how cheap rent would be if gov’t were funded some other way!
2a) The second thing to notice is that current property owner is DREAMING if he thinks he’s gonna sell it for that. Who in the heck is gonna shell-out $54,000 (down payment and closing costs) to buy a property that, if full-rented will lose money every month?
2b) The “standard” formula used by lenders is to estimate repairs and vacancies are gonna cost 20% of rent. To break-even a buyer would have to drop the price more than 20% (which would be $180,000). . . . Why “more than”? Because reducing the price does not reduce the taxes. The break-even point is $170,000 and most investors like to make a profit so the likely final selling price is less than that.
