It’s Still The Taxes, New York
I just read about a family in New York City looking to buy a house and the whole story is indicative of what’s going on out there in real estate.
It isn’t pretty.
This family was so proud when they found a dilapidated single-family row house somewhere in Brooklyn for half a million dollars that the fact that it needed many thousands of dollars worth of work was of no concern. They were just thrilled to find something they hadn’t been outbid on, or that wasn’t over their budget, or that didn’t look like it needed tearing down.
Meanwhile, in Boston, one prospective buyer said to a local reporter “This is just stupid,” referring to the 12 different offers he’d put in to buy 12 different houses, for which he came up short every time.
They thought they’d nailed the last house they’d put an offer on, but at the last minute someone came in and offered nearly twice what he had – all in cash. The house wasn’t even that great, he said, so yeah, “Isn’t this stupid?” was the perfect whine.
Folks in Boston are competing with foreign investors, a tight real estate market and sheer lunacy. Some people are moving to New Hampshire from Boston for cheaper real estate but then must make the nightmarish commute to Boston every day to work. And as if to punish everyone for finding cheaper housing, the state of Massachusetts is taxing all the commuters on their income even though they’re not living in their state anymore.
Sounds fun doesn’t it?
You couldn’t pay me to live in a city anymore where people spend a huge amount of their income paying for their overpriced houses and raising kids that only see maple trees in books.
Beyond absurd real estate prices, there’s another good reason not to live in New York City: a study just came out that proves living in green spaces extends your life. The greener the space, the longer your potential to live. I figure we’ve all got enough green here to outlive our big city neighbors by decades.
The problem with real estate in our beautiful corner of the world is still the high property taxes. I’ve been chatting up a few realtors about the market here and one told me that even the Ohio people are mortified when they find out what they’ll be paying in taxes on a house here.
My concern lies less with the rich Ohio people and more with the droves of people who are fleeing cities and looking for places just like ours to raise their families. They have a lot to contribute to our communities – just look at the owners of the Bag and String wine store in Lakewood. That lovely couple moved here from California with their young children and opened up a business that really enhances our community. They also bought a house in the neighborhood.
We’ve got a desirable area but we’re really limiting our potential by not paying attention to the obvious. Who’s going to move to an area where the property taxes seem boundless?
There’s a sweet $90,000 house on the market in Lakewood. It’s selling for nearly $60,000 less than the owners paid for it two years ago, but since its last assessment was based on $149,000, that tax rate could possibly stick and anyone who buys it will be writing the government a check for nearly $5,400 every year, according to the stats on Zillow.com.
The property tax on a newly built $430,000 house in a similar area in Massachusetts would be just under $3,000 per year. The problem here is obvious, but what makes it unfortunate is the people and possibilities that our community misses out on. It’s hard to evolve when our tax system stifles growth.
And, too, there’s the danger of fixing up your home and selling it for more in the future and having to tell the buyers the already outrageous taxes are only going to get worse.
And it’s also hard for new families to become upwardly mobile when property taxes make it hard to afford a better home. A couple might be able to afford the $90,000 house I mentioned earlier, but their monthly tax burden is going to be more than their mortgage payment. Is that a situation anyone truly wants to get into – paying more in taxes than they are on their home? Is it a wise investment to do so?
Folks in New York state pay some of the highest property taxes in the country. That’s not news to anyone. But when you hear that nearly 700,000 people have packed up and left in the past six years, it sort of makes the point again, doesn’t it?