What they AREN'T TELLING YOU

Home Prices Fell in ’07 for First Time in Decades - New York Times

Okay what they aren't telling you is that the industry has been expecting this for the last 10 yrs or so but couldn't figure out why it hadn't happened yet.

This is simple price correction.

Generally what happens with housing is that the prices will slowly but steadily rise over a period of time and then level off for a couple of years and then begin a small rise again.
In the past in order for your property to raise in value you had to actually DO something to make the value go up.

But beginning in the 1990's the same time that "creative economics" were happening on Wall Street, it was also happening with the housing industry. They thought for sure it would have corrected itself shortly after Clinton left office but instead there was a push for easy-to-get mortgages so that those who previously couldn't qualify for a home could get one.

So the amount of money you could spend on your home went up....and so did the price of the home!

In the 80's when we bought our first home we got a 2 bedroom, 1 bath, detached single garage for $59,900....today that same home would go for over $200,000!!
That is so wrong.

If gas prices or food prices or even the price of beer went up that same rate people would have been screaming and hollering....but the market simply told them "its okay, its normal".

So now 20 years later housing prices have gone up nearly 300% and people squawk because the market is correcting itself by going down 17%???

Property taxes do not help the situation either...there is a false sense of "equality" when it comes to property tax. People think "well my property tax has only gone up 10%" but what they don't take into account is how much the state/county has raised the 'value' of their property in order to raise their funds.

Go ahead look at your statement.

Yes your property tax has gone up 10% but that is only because they say your home is worth about 25% more than it was last year and you didn't even DO anything major to it! So in reality when you look at it, your property tax has really gone up nearly 30% from where it used to be!

The other one that gets me are school levies and bonds. They base the amount of money they get on the 'worth' of the property ("its an increase of $500/yr for a house worth $250,000") but you watch and see how many of the homes in the effected area will go from below $250,000 to above it after it passes!
Its not that the schools have that much influence, its just that if the state/county can get the people to foot the bill then why should they?

Well actually when you think of it--we foot the bill no matter what!

There is so much 'stuff' attached to our property tax that a former governor decided that it was time for people to see exactly where their money was going so he pulled the 'secret' funding coming from property tax and make the county/city/schools go directly to the people to make them accountable.

It hasn't worked. Why? Because most people don't care enough to keep an eye on things. Most people would rather not bother with fighting over it. Most people are too busy to sit in on the town meetings/school board meetings/county commisioner meetings to see what exactly is up.

And when was the last time you heard of someone going to a meeting to challenge what the worth of their property tax was??? I know we never have, but we may start now that we have learned what they are comparing it against---property that isn't even CLOSE to what we have.

They are comparing our three bedroom home to a 5 bedroom, our 1 3/4 baths to a 3 bath, and our rolling land to a nice peice of flat land that has plenty of potential!

Hey where did I go with that?

All this is to say that the market is correcty the mistakes it made 20 yrs ago....don't worry, I highly doubt we are going to go into another Great Depression in the near future. We may enter into a little one but nothing like it was in the 30's.