Is Property Tax Transfer Causing CA Real Estate Shrinkage? Or is it a Normal Economic Trend?

Despite what critics say, there is no factual data or compelling case study that supports the frail argument that the main reason for home sales shrinkage, as well as sluggish price gains that have been  consistently hampering the California real estate market, is mainly due to property tax transfer and tax relief provided by Proposition 13, with Proposition 58 and Prop 193 thrown in for good measure.

When, in fact, generic economic statistics and anecdotal data actually tells us that shrinkage in the real estate market in California is clearly an outcome of normal fluctuations, up and down, in the real estate market and more importantly, severe fluctuations in the overall economy in California. Click Here to explore this point of view, which does appear to be logical… factoring in sky-rocketing gas taxes, and the particularly high cost of living overall in California these days. And, as many realtors insist based on nothing more than opinion and bias, not the fault of families keeping their family home “in the family”.

The leveling off of home prices, economists insist, is a national trend. And a 20-city composite index as well as the National Index have been recording the smallest price gains on home sales since 2012. David Blitzer, chairman of the S&P Dow Jones Index Committee, has said, “The patterns seen in the last year or more continue: Year-over-year real property price gains in most cities are consistently shrinking. Double-digit annual gains have vanished…”

For the broad picture, Blitzer says, “The difficulty facing housing may be too-high price increases”.  Not, we must point out, the absurd notion that the blame for California real estate market shrinkage or faltering home sale prices, lies with property tax transfer, avoiding property tax reassessment, or the ability to keep parents property taxes intact, with the ability to transfer parents property taxes when inheriting property taxes associated with real property transfers. This argument simply doesn’t hold up under scrutiny.

Moreover, many of these properties in question are quite old, and, frankly, usually require quite a bit of work involving a great deal of time and money… and would certainly not be selling at the fabulously high prices many investors and other real estate professionals claim they would be. To insist otherwise raises questions regarding the grasp many of these realtors and brokers have on the reality of the residential home market in California.

The bottom line is – California real estate investors would prefer to have as many homes on the market to buy and to sell solely to increase their profits; and the brokers and

realtors that are critics of Prop 13 and Proposition 58, or Proposition 193 (involving grandparents’ property transfers to grandchildren) prefer to have more homes to sell strictly for the additional commissions… Click Here: for more on the critics of these popular tax relief initiatives.

Click Here: for more on the critics of {Not, as they insist in the media, to maintain “fairness for families looking to buy property in California”. The “fairness” argument just isn’t holding water any more… Not that it ever did.

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