County assessor’s records do not accurately represent land value. Since Prop 13, the allocation of land and building value has become irrelevant. Therefore, assessors make no attempt to properly allocate values. Even the IRS recognizes this and ignores CA property tax bills when allocating land v. depreciable structures.

(I haven’t misunderstood something, have I ???)

Thank you for having a go at the “fake equity evaporation” of residential real estate in California,

I note you used medians instead of average prices and put to one side the rental housing stock, which constitutes near half of the residential stick. It is my view that this should be included as well.

Lets have a rough - very rough - guess at this. With 13 million residential units in California and an AVERAGE price of $600,000 (incl apartments / condos) - this would suggest that there was well in excess of $7.8 trillion of residential stock in California at the peak (likely nearer $9 trillion) which has slumped about 37% or in excess of $2.8 trillion so far since the peak.

Nationally too - the 120 million of all residential stock neads to be multiplied out at the AVERAGE price at the peak - then what the average price is now - to assess the “fake value evapoation” to date.

Anything below three times annual household income should be treated as “real value” - above that “fake value”.

My gues is that there is in excess of $8 trillion of “fake value” to work out of the system in coming years in the United States. Counties such as the United Kingdom, Ireland, Australia and New Zealand have a much greater “fake value problem” - in rough terms near double their GDPs. The United States in contrast has the equivilent of somewhat less than one times its GDP of “fake value”.

I trust you and your readers make more refined attempts at assessing the “fake value” in the California and United States markets.

Hugh Pavletich
Christchurch
New Zealand

I tend to doubt any attorney is going to give you the time of day on this one. Seems like you have a decent grasp of the 5 year rule. You’d likely be risking trespassing laws. And 5 years is a looooong time to be paying taxes on something that isn’t yours. If your erstwhile followers - that is, delinquent 6th graders - get involved in the unoccupied dwellings near you, that wouldn’t bode so well for the neighborhood returning either, don’t you think? And so then why would you pay prop taxes on that, especially since they will be based on last sales price in the $300k’s rather than the ostensible $100k valuation, unless you dispute - and then how do you show the county you have standing to challenge?

You’d be a squatter, pure and simple. Not that it doesn’t fall in line with our forebears from the 19th century, mind you. But it’s all rationalization at that point - patriotism, etc. Good luck, and let us know how that works out.

@Doc,

Lost “Equity”? Um, I’m not sure I agree with that term. Fakequity maybe. Can I trademark that?