Charles Hugh Smith on Real Estate and Property Taxes

http://www.oftwominds.com/blogapril12/peak-housing4-12.html

http://www.oftwominds.com/blogapril12/peak-housing4-12.html

"Once the belief that housing is the bedrock of middle class wealth fades,
so too will the motivation to risk homeownership
in an economy that puts a premium on mobility and frequent changes of careers and jobs.

We can discern a sea-change in this chart of housing activity:
despite trillions of dollars in subsidies, guaranteed mortgages
and other types of Federal support,
the housing market has not recovered, it has only stopped plummeting:

Only one aspect of housing hasn't yet peaked: property taxes.

If the risks of homeownership weren't apparent before,
they certainly are now as local governments jack up property taxes to indenture homeowners...

Note that property taxes declined significantly in the previous recession (2000-2002),
but they rose steeply in the 2008-9 recession, and continued climbing.

The recent modest slippage may have several factors:
lower valuations in states that set property taxes on assessed values,
tax revenues declining as homes in foreclosure languish with unpaid property taxes, and so on.

Anyone claiming that property taxes have peaked
will have to support that claim with evidence
that local governments have found other sources of tax revenues to replace property taxes.

Until that dynamic changes,
then local government will have every incentive to jack up property taxes
by any and all means available."

Charles Hugh Smith