Buyer Behavior – Post Election.
November 5th, 2008 . by Jon ModeneNo.
Not the “national election” (which I prefer to believe is a set of 50 different state elections to choose 50 different sets of “electors” under the Constitution, but I digress . . . ), but rather I mean the LOCAL election.
The key news is the passage of the Perrysburg School levy.
One of the main reasons people pay the “Perrysburg Premium” as I call it, is the reliable resale value of Perrysburg real estate, which in turn owes a lot to our excellent schools.
The levy passed yesterday – which means that the schools will continue as they are now.
Which is a good thing.
(I will also point out that our excellent Sheriff was re-elected – but that’s another story for another day!)
So will buyers still want to come to Perrysburg?
Yes.
But if the local taxes are TOO HIGH – that will change rapidly (see Sylvania tax rates/market data/and anecdotal per house 6 month taxes on many newer houses in some parts of Sylvania and Sylvania Twp. for information).
Buyers are still naming Perrysburg as one of their top destinations or choices to do a home search. I do have some personal feelings and advice for Ohioans on taxes: they are too high compared to the rest of the country. If we don’t lower them, we are just pushing people, capital, and talent to lower tax states. There is only so much that people will pay and then – POOF – they are in Florida or Tennessee or Texas.
How about investors? Well, they are now starting this morning, beginning to factor in a 30% capital gains tax rate in their minds for 2009 transactions and sales vice the 15% now in effect.
The upshot: they are all going to pay less for property. Which lowers demand. Which lowers property values.
No big deal on a $5000 beat up REO in the center of Toledo – a $1000 price drop.
But it is a big deal in Rossford, Perrysburg, and Maumee. I expect prices to be hit hard starting soon. If you are selling an investment property – sell it in 2008 if you will be paying capital gains. If you are buying and investing (and why aren’t you – values and prices are AMAZINGLY low . . . ) you need to factor in the newly promised capital gains tax hikes in your investment planning
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