Reply to What is stopping NoVA from reaching SV level prices?

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[quote=Anonymous][quote=Anonymous][quote]For starters, office building height in the Silicon Valley (Sunnyvale, Mountain View, etc.) can be capped at two stories, max. So there is still very restricted space for condominiums and "verticle" housing. There are very few apartment/condo towers. The home owners don't mind the lack of housing since it keeps their home prices high. My in-laws small 3-bed, two-bath ranch with modest yard is worth north of $2.5M.[/quote]

This and there are a lot of young workers who in several years make a good chunk of cash in stock options. They are faced with either buying a house or a 100K sports car. Some actually choose the sports car but others sink it into a small house which becomes an investment. Foreign investors sink cash into the housing market. People who relocate and are still working will keep their home and rent it out in case they want to return because they know they will not be able to afford to get back into the market. People see the appreciation getting further and further out of reach so they stretch more than they should to buy a house.

If you stop this suddenly by building massive density vertically up or getting rid of prop 13 you would collapse the market. The value is all in the land not the actual houses. The only group that was pushing for this was a realtors association. A crash would benefit realtors because there would be more transactions even if they were for substantially less. Inventory is so tight and real estate is so lucrative that there are 50 realtors chomping to get at 1 listing. [/quote]

Prop 13 should be overturned for many reasons. I am a homeowner and I see it.  I think property taxes should be capped only for the elderly.  I used to live in a neighborhood with houses that were in the 750k-1million range. When the house around the corner was finally sold, I looked at the listing and could see their property taxes. They had been paying $1600/yr!  It sold and the new owners paid $12k last year on an appraised value of 1 million.  That neighborhood has increased since they bought it though and most houses sell in the 1.2-1.3 range.  
  
I agree about people buying sports cars instead of investing in to a house. There is a reason that there are teslas everywhere out there.  People can live in areas that are more affordable, deal with the long commute by getting a tesla and charging at work or at target, and then use the HOV lane for the commute.  It is probably smarter financially then going house poor for a house you really can't afford.  [/quote]

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