Hacker News Reader

Comment by flachsechs | Hacker News Reader

a lot of buyers are coming in with 500k+ of equity, sometimes over a million dollars, sometimes ALL CASH because they liquidated a boatload of stock and are now upgrading their living situation.

your mortgage numbers are way higher than reality. another concern is property taxes, but even at 2.5M, that's less than 30k/year in property taxes -- a working power couple or one single high earner can easily pay that. and in 20 years, 30k/year will have less than half the real value.

i think someone leveraging themselves into a 5-figure/month mortgage is the exception, not the rule.

tl;dr people are rich these days. my real concern is social unrest because of these insane imbalances in wealth distribution.

View on HN

I'm not sure if its accurate, but https://www.redfin.com/CA/Sunnyvale/1129-Prunelle-Ct-94087/h... lists the property tax for last year at 1504$?

That's thanks to Prop 13, which caps the rate of assessed property valuation between sales. The house will be reappraised at the value it sold for, and the owners will pay the full ~1.25% property tax in the future.

Interestingly, the Santa Clara county tax collectors will take several months to reappraise the property, and then they'll send a supplemental tax bill to cover the difference between the $125/month the prior owners were paying and the $2.6k/month the new owners will be paying. It's frustrating they don't just assess taxes correctly from the beginning, but they do things old school over there.

That's a pretty good tax bill for a house assessed at $150,000, which to me suggests that the neighborhood hasn't been reassessed since it was built. I bet that won't last much longer.

CA has a state wide law that prohibits reassessment unless there is a change of ownership or substantial renovation. Property taxes growth is capped (I think at 2% or inflation, whichever is less). There are many houses that were bought in the 60s or 70s that pay peanuts in taxes. This is partly (or primarily depending on who you ask...) why the CA school system so screwed up.

Primarily, for me. My folks pay ~$150/mo in sum total of taxes, electricity, etc. (no more mortgage now, so large caveat). Their neighbors, in the exact same house plan, who paid ~$950k, most likely pay ~$4500/mo. My folks have nothing to say to them, they live in totally different worlds despite being neighbors. The neighbors on the other side are pretty much meth-heads, but the trust scheming makes their monthly payments a bit more than my folks. Imagine that, you pay ~4.5k/mo, two hours out into the 'burbs, and then 2 doors down is a literal crack-house. Prop 13 just distorts things so much, it destroys neighborhoods by freezing them.

Reply on news.ycombinator.com