Rising And Slipping Property Values – The American
By James Donahue
The great American dilemma
is that people on fixed or moderate incomes are now priced out of home ownership. Many of us are old enough to remember a
time when no one could have imagined how that could have ever happened.
My wife and I bought our first home in the 1960s. I remember sweating
over the price of that two-story, four-bedroom home with two bathrooms and a two-car garage in a quiet, tree-shaded neighborhood.
The price was $24,000.
If you consider that a low
price, remember that American wages were comparatively low as well, and a dollar bought a lot more than it does today. We
bought gasoline for 24 cents a gallon. I bought my first car, a three-year-old Chevrolet sedan, for $600. I earned 75 cents
an hour on my first job and thought it was a good wage.
Before we selected that house,
a real-estate agent showed us numerous other fine homes that ranged from $6,000 to $100,000. That high-priced house was owned
by a judge who came from a wealthy family. It was a virtual mansion located on a bluff overlooking Lake Michigan. It featured
a private boat dock and well manicured grounds that were professionally cared for.
Today the starter house we purchased is valued at much more than the mansion
we gawked at during our quest for a first home. In fact, modest two-bedroom homes in most neighborhoods throughout America
are priced at $100,000 or higher. And that is after the big housing bubble of the 1990s and the years leading up to 2008 burst.
Before that it was nothing to pay a million or more for a modest home in some parts of the country.
As the population boom goes
on, and building supplies diminish, the cash value of the standing houses all over the land is still hanging beyond the reach
of most would-be home buyers. As the job market falls into ruin and family income drops, the American dream of home ownership
is quickly disappearing for all but the very wealthy.
With the fast rise in value
is found another serious problem. Older Americans who have paid for their homes are facing the dilemma of rising property
values. Property taxes, calculated on the high cash value of the property, are soaring. For some the yearly tax bill is more
than the monthly mortgage payments were at the time the home was purchased. This has become a real dilemma for local school
districts and governments that depend upon extra voted millage to finance new buildings, roads and special services.
Back when the annual tax bill
was $40 or $50 a year for city, school and county operations, folks didn’t mind tacking a few extra dollars on the tax
lien to pay for a new school building or to operate the local library and senior citizen center.
Now, however, with tax assessments
rising to the thousands of dollars, property owners are in rebellion. They are quick to reject any voted request for additional
property taxes, and are signing petitions to force reductions in the tax burdens.
All of this has not escaped
the attention of state lawmakers who are caught in the same financial dilemma with their own homes. Consequently they are
hearing the cries of a growing list of disgruntled homeowners loud and clear.
The problem: how to fix this
in a fair and equitable way without hurting schools and local governments. Schools need a more secure way of getting the money
they need to stay solvent. Local governments are caught in the middle, claiming a need for more operating cash as well. And
seniors who own their homes but are living on fixed incomes are reluctant to approve special millage issues.
“People are facing being
taxed out of their homes,” one retired Lake Tahoe homeowner complained. He said taxes for his home jumped from $2,200
in 1990 to $12,000 in 2005.
That a person is a homeowner
is a misnomer. He or she might have bought and paid for the home after years of hard toil and monthly mortgage payments. But
if they miss one year of property tax payment the government has the legal right to seize the property and put it up for tax
In other words, if you fail
to pay the tax you lose the property.
The question then is . . .
does anybody really own a home? How much security do we have if the house we paid for and occupy can be taken away from us
so quickly by the government created to serve and protect us?
(Let one sibling get caught
by the police hiding marijuana in your home and making a business of selling it on the street, and authorities have the legal
right to seize the property, sell it, and use the money to run the local narcotics unit.)
As jobs dwindle and more and
more skilled tradesmen are forced to take low-paying public service jobs, the home ownership dilemma intensifies. When we
lived briefly in high-priced Sedona, Arizona, about ten years ago, many of the store clerks and gas station attendants were
living in tents in the nearby national forest. They rode to town on bicycles and old cars to wait on the wealthy who lived
in million dollar priced homes throughout that community.
Can we expect the Sedona scenario
to swell to encompass much of the nation as house prices and tax levies hammer away at the pocketbooks of the struggling working
class? We post pictures of homeless Americans on this site daily to make readers aware of the fact that this is already happening
in nearly every community.