Free market or government controlled housing costs?

[cosmictraveler]

I always thought that the private sector which is the free market had control of the prices of houses. I must have always been wrong for lately the government has reduced the price of my house because they thought it was to high in value. If we lived in a free market why and how can the government reduce the prices of anyones homes? It would seem to me that if I was going to want to move into a smaller home, I could sell mine for its higher value and use some of the money to invest into another home elsewhere. But now that idea has been thrown down the drain by the government lowering my value by over 50%!

Can anyone explain to me just how it has become so easy to have the government tell me what I can sell my home for? They have destroyed the worth of my property and my goal of moving as well. It took many decades to get my home to where it was worth allot but in just a few short months the government has destroyed most of the value. Thank you in advance for your thoughts on this matter.

[doom_shepherd]

What???

Exactly how and when did the government tell you what your house is worth?

In your property tax assessment? Most folks would think that the government deciding to lower their property tax was a good thing. It doesn't actually change the price of your house (which is, in reality, as it is with all things, the price that you can find someone willing to pay.)

It may mean that your local property values have gone down. Did someone recently build a slaughterhouse or garbage dump near by? Is the neighborhood being taken over by public housing?

[cosmictraveler]

What???

Exactly how and when did the government tell you what your house is worth?

In your property tax assessment? Most folks would think that the government deciding to lower their property tax was a good thing. It doesn't actually change the price of your house (which is, in reality, as it is with all things, the price that you can find someone willing to pay.)

It may mean that your local property values have gone down. Did someone recently build a slaughterhouse or garbage dump near by? Is the neighborhood being taken over by public housing?

The government lowerd my assessed value by 50% BUT raised the millage rate so that they did NOT lower the taxes. As my house increases in value from now on the taxes will also escalate because of the higher millage rates.

Now when people want to know what the assessed value is they go online and can see what the lowered value is and IF I were to sell they would be using that number to buy my property. Everyone around my area has had their homes re assessed in the last 6 months to the lower values.

I just do not understand how is it that the government can make the prices go up and down and not the FREE MARKET system.

[doom_shepherd]

What???

Exactly how and when did the government tell you what your house is worth?

In your property tax assessment? Most folks would think that the government deciding to lower their property tax was a good thing. It doesn't actually change the price of your house (which is, in reality, as it is with all things, the price that you can find someone willing to pay.)

It may mean that your local property values have gone down. Did someone recently build a slaughterhouse or garbage dump near by? Is the neighborhood being taken over by public housing?

The government lowerd my assessed value by 50% BUT raised the millage rate so that they did NOT lower the taxes. As my house increases in value from now on the taxes will also escalate because of the higher millage rates.

Now when people want to know what the assessed value is they go online and can see what the lowered value is and IF I were to sell they would be using that number to buy my property. Everyone around my area has had their homes re assessed in the last 6 months to the lower values.

I just do not understand how is it that the government can make the prices go up and down and not the FREE MARKET system.

Ah, a bait-and-switch. Clever, entirely legal, and yet of extremely dubious ethics. Who runs your local government? Vote them out, they're thieves. Seriously, that sounds like a political machine method of punishing a community that politically opposed them.

[StarRider1701]

The government is not setting the value of your house. They asses the tax value of your home and then tax that value. While they can change that assessment as they choose, you can go to them and correct it if it is too far wrong. All you need to do is to hire a private appraiser to appraise your home then take that to your local county govt office in charge of tax assessments and have it corrected. I did that when they set the value of my house a bit too high a few years ago and I know others who have done so as well. If what you say is true then you'll have to pay higher taxes, but if you are wanting to sell your house in the near future, then this will be worth it to you.

[grokme]

cosmic,

Interesting post. The goverment isn't setting the price. They are setting the taxable value.

You and your neighbors can still price your houses for whatever price you're willing to give up your houses for. That's the supply curve. However, if people feel the prices are too high, then they won't buy them. They will be willing to buy more houses at a lower price. That is the free market demand curve. You should try to find the optimal point where supply and demand meet.

With the recent housing bust, though, the value of houses has been reduced dramatically, which is why the government probably lowered your taxable value. The government assessment is supposed to be a reflection of the supply and demand curve. It shouldn't drive it.

[cosmictraveler]

With the recent housing bust, though, the value of houses has been reduced dramatically, which is why the government probably lowered your taxable value

But they RAISED the millage! That means they did not lose any revenue because of the lower assessments and when they feel the prices have gained price they will be receiving even MORE taxes! They have set the values for everyone not just themselves and I feel that isn't kosher.