What the housing bust means!

Since 1996 the cost of housing in the United States has
gone up 126%! For those of us that have trouble with math..
If we are not mistaken; a one million dollar home in 1996
would have cost you $2.26 million in 2006! What everyone
with the exception of politicians and bureaucrats doesn’t
quite get…is that taxes and assessments on this property
has skyrocketed Government into lots of money…all money
that used to belong to the people.

Sacramento County is one of the rare governments that have
wasted no time re-assessing property and offering downsized
property taxes: http://www.sacbee.com/101/story/434423.html
The days of people buying new houses on their credit cards
may soon be over…especially those with No Money Down…and
1.5% APRs or Interest Only payments for five years! Webster
Guillory our Orange County Tax Assessor must be going crazy
with all the requests he is getting for re-evaluation.

If the current sub-prime credit downturn in our economy
continues unabated….we could see housing and commercial
prices be reduced by half in the middle of next year. What
would that mean to local governments, county governments and
cash to the Federal Government? The immediate response will
have to be “cut-backs in services”. If we only have half of
the tax revenue we got last year….”who you gonna call?”
What will that do to housing starts and new development? Put
the delay game in play…at a minimum! For those not paying
much attention….more than doubling the cost of property in
10 years is a big deal. Another important aspect is the
rental market. There are lots of available rental units and
the prices are falling like rocks.

As the Fed pumps up the money supply and local politicians
keep spending like there is no tomorrow…..well, right after
the election in 2008…we may well have a serious day of big
reckoning. If the Democrats get in…they will want to spend
and spend….and when there is no money…guess what happens?
Taxes will go through the roof. There is little doubt that
local politicians are already looking for creative and unique
ways to take money out of our pockets and put it in theirs!
Some of these beauties are taking “junkets” to far away places
with strange sounding names to find new ways to take our cash.
One way we thought was “inventive” is going on in Great Britain
right now. Those surveillance and “code enforcement cameras”
on all the highways….are spotting people “smoking in their
cars”……they do that great “smile” and take your photo and
send you a ticket for “Smoking in your own car or ticketing the
owner of someone else’s car!” Minor traffic “Scoff Laws” are
now being enforced by camera!

Back to Property Rights and Problems. The Home Owners Associations
continue to muse and abuse the new owners of property with their
never ending dictates…any color, any house….exactly like the
HOA wants it – or get fined and pilloried. For those who belong
to a HOA….we suggest that you meet with members of any HOA or
even attend a meeting before you buy! You may never know how bad
it is going to be – until you see these Kangaroo Courts in action.
Hey, they are not all bad – they are exactly what you think that
they might be: Power hungry, self-serving, spend “your” money and
self perpetuating structures! Your home may be only as safe as the
lovely group of “volunteer” homeowners who abide by CC & R’s that
have been dictated by the the likes of the Irvine Company or some
other benevolent developer created Association.

So, if you are looking for a good deal in this market…you better
Google or Yahoo Search the purchase price of that property in 1996
and add 20%. You probably won’t be as hurt as you could be if you
follow those simple concepts. The days of buying Residential or
Commercial property on your Credit Card may be over. It’s back to
finding a reasonable 30 year fixed loan and expect to sit on that
property for at least five years. Those politicians and bureaucrats
are still going to want into your pocket and undoubtedly will get
there. It the Democrats take the White House in 2008…the spending
will go up astronomically. Since they have no money…so will the
taxes. If the Republicans get in – all bets are off and who knows?
Five years? The time it will take to recoup the loses in this great
pyramid scheme! The bets are now that the Fed is still against it and
will have to reduce interest rates by another half point soon! How
deep this baby is going to go….is anyone’s guess. In the meantime,
the politicians spend without care!

About Ron & Anna Winship

Independent News Producers/Writers and Directors for Parker-Longbow Productions. Independent Programming which includes a broad variety of Political, Entertainment and Professional Personalities. Cutting Edge - a talk show...is the flagship of over 30 URL websites developed or under development. The Winships have been blogging for the Orange Juice since back when nickels had buffalos on them, and men wore onions attached to their belts, because it was the fashion back then.