Saturday, March 19, 2011

So who started the Housing Bubble?

The Banks are pointing at each other as well as the Mortgage lenders and they point to the Mortgage Insurers and they point to government mortgage buying agencies and they point to the politicians and as I see it they are all guilty of foul deeds. But I don't see it was any of them who started the Grand Sham.

No, it was the lowly County Tax Assessor who I suspect at the behest of the elected officials who falsely elevated the appraised value of single family residences within their jurisdiction so as to enrich their coffers. Life for them is simple as property taxes are based on market value and the local Tax Assessor is often the decider of that.

I recall the early 80s when the tax value of our home increased by 20% in one pop and when I called the Assessor office I was told it was fair adjustment. That
even though none of my neighbors had recently sold their homes at greatly inflated prices and nobody had knocked on our door offering us big money.

I was reminded to look at the bright side. That yes we would need to pay a bit more in taxes but we had just been benefited with having a greater equity in our home and that could help with gaining loans for needed remodeling or whatever. Look Ma, we are rich and we don't need to sell the house to enjoy our new found wealth!

The local Real Estate sellers soon jumped on the false inflation band wagon and the ball started rolling for many with nobody crying foul as new wealth was flowingl. Now, what fool would want to stop that?

If reality is any indicator, our old single family residence just sold for the same price we were paid in the early 90s. Yes, and that included the Tax Assessors initial false 20% more than it was really worth we had enjoyed in the 80s.

Tell me, are we ready for double knits and long hair as I think we may be headed back to the 70s and we won't need a DeLorean and nutty professor to make the trip.


Blogger Robin said...

speaking of housing bubbles... one thing that people seem to forget or not talked much about it is that companies such as Bank of America were giving housing loans to individuals who only have the ITIN number.

I said at the time it was not a smart move to give housing loans to people who are not legally in the country because as time has proven... when times get tough or they get deported the last thing that they're going to worry about is their mortgage payment.

Didn't make sense to me but what do I know.

3:30 AM  

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