You can just walk around the neighborhoods and see how quickly homes are selling in B'game. The Daily Journal is reporting on the County Controller's report here that puts numbers to the sales rates and the possible tax ramifications
August 2012 was the strongest month for Bay Area home sales in six years and the number of homes sold increased 14 percent over the previous year. Adler wrote that the county’s median prices continue to rise — the single-family home median rose 8.9 percent to $826,250 — and the improving real estate market in the county should continue to increase assessed property values and, in turn, future property tax revenue.
The property tax assessment roll is also up 3.33 percent, or $4.75 billion, which means an increase in property tax revenue of about $47.5 million for schools, cities, special districts and the county. However, the future doesn’t include refunds, which are unpredictable. For example, in fiscal year 2011-12, the county processed $26.3 million in refunds.
The report also noted that the commercial property vacancy rate was up 14.1 percent and the per capita personal income increased to $67,964 which is an ongoing increase.
If you read up on the deal that has backed us a step or two back from the fiscal cliff, there are some notions of limited deductions on upper income people that could affect mortgage deductions and hence the real estate market generally. We'll see if it is enough to disrupt the B'game gravy train.
A guest opinion piece in the DJ by Anne Oliva who is the 2012 President of SAMCAR puts a number to the real estate market disruption I mention in the post. Here is a clip from her piece:
Recent discussions at the federal level have included outright elimination of or changes to the mortgage interest deduction. This isn’t complicated — the mortgage interest deduction is vital to the stability of the San Mateo County housing market and economy. Any change to the mortgage interest deduction will harm a tenuous economic recovery, make homeownership less affordable and reverse a 100-year commitment to housing.
To change this established portion of the U.S. tax code would be to change the rules in the middle of a game, resulting in a massive unexpected redistribution of wealth in the country as most people itemize the mortgage interest deduction at some point in their homeownership.
Because of the capitalization impact of the expected stream of future mortgage interest deductions, removing the mortgage interest deduction would decrease home values (conservative estimate) by 15 percent, according to the National Association of Realtors, and destroy $2.5 trillion in housing wealth ... and that includes the wealth of homeowners who own their homes free and clear. That’s a big hit on a family’s pocketbook any time, but especially now.
Posted by: Joe | January 06, 2013 at 01:55 PM