This conclusion comes from virtually all buyers of homes buy on what they can afford in a monthly payment under a mortgage. When property taxes are increased one of two things happen, 1) buyers must pay more in monthly payment for principle, interest, insurance and taxes (PITI), or 2) sellers must drop their price, thus losing their equity, in order to attract a buyer who can afford the monthly mortgage. With wages flat or decreasing over the last decade....something has to give....and it is #2 that is occurring. With increased property taxes, homeowners are having their equity stripped by local government that has shown it cannot manage itself.
With that, I have pulled southwest Minneapolis homes to show the destruction that is occurring due to increasing property taxes and call them the High Five homes in honor of our politicians who refuse to make the difficult decisions. Here they are:
HIGH FIVE HOME #1 - 4528 Fremont Avenue South
Original list price: $1,795,000
Property Tax Assessment: $1,509,000
Date Sold: 12/16/10
Sold Price: $1,190,000
HIGH FIVE HOME #2 - 5132 Bryant Avenue South
Purchased in 2003 for $555,000 with taxes of $4,198
Owner put $100k plus into gourmet kitchen, central air, and more.
Original list price (2010): $719,000
Property Tax Assessment: $600,000 with taxes of $9,060 (double 2003 taxes)
Date Sold: 11/1/10
Sold Price: $545,000
HIGH FIVE HOME #3 - 4225 Linden Hills Blvd.
Original List: $1,125,000
Property Tax Assessment: $955,000
Date Sold: 6/14/10
Sold Price: $865,000
Property taxes 2003 were $4,946, property taxes 2010 are $15,473
HIGH FIVE HOME #4 - 4328 W Lake Harriet Parkway
Purchased in 2007 for $875,000
Assessed at $647,000
Date Sold: 9/27/10
Sold Price: $512,500
These are all upper bracket homes. While some may say, "Hey, if you can afford to live in that house, you certainly can afford to pay more." and this is often the position of our city leaders. This is a ludicrous justification for increased taxation. People who live in these homes lose jobs, have businesses that are struggling, or have other major expenses. They have budgeted to live in their homes just like anyone else based on their incomes. They are not ATMs that can be freely accessed for cash.
Would you want to buy a house in Minneapolis knowing that it was going to lose value due to local government not being able to manage and reign in spending? Our Minneapolis government is taxing people 100-200% more than they were just seven years ago....yet it isn't enough. Something needs to be fixed to save property values in the city and make the city attractive for home ownership. Otherwise, we are following the vicious tax and destroy equity circle that has destroyed cities like Chicago, Detroit, etc.
Time to slow the destruction of home equity and house values in the city. It starts with responsible government spending.
So, another High Five goes out to Betsy Hodges, Scott Dibble, RT Rybak, and others. Please stop taking equity from Minneapolis homeowners.
************************************************************
NOTE - Why the High Five jab? For new readers here, in 2009 on this blog I posted that a candidate for 6th District Park Board was not a property owner in the 6th District of Minneapolis. I pointed this out because he was not a property taxpayer, yet as part of his campaign he felt that property owners should be paying more taxes and that he had no empathy for the already 100-200% increases property owners had seen over a few years. Subsequent to that blog posting, that candidate had a 'renters High Five' to celebrate that they don't pay property taxes at a campaign event with fellow renters Betsy Hodges and Scott Dibble. Thus, the High Five real estate award was created. That 'high five' is on record in the Ethics fine file found by clicking here.
0 comments:
Post a Comment