California may be a capital of cosmetic surgery, but it’s not just noses and eyelids falling under the knife. A hot housing market is driving buyers to pay exorbitant sums for old, frumpy houses, knowing they’ll pay plenty more to remake them to modern tastes. Others currently own dowdy houses and choose to renovate rather than relocate. — Wall Street Journal
"While the dynamic is playing out in a number of U.S. cities, California’s plight is particularly intense because of Proposition 13, a 1978 amendment to the state constitution. It set property taxes based on 1975 assessments and capped future property-tax increases at 2% a year."
The issue with this, according to the Wall Street Journal, is that when a home is sold in the state, taxes increase because the property is reassessed to its new sale price. This incentivizes homeowners to renovate instead of move, thereby keeping the amount of home listings low and prices high.
More news from the Golden State:
No Comments
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.