14 states where prices will increase the most....

25 Replies

David, thanks for posting this.

A couple questions come to mind looking at this. With projected low prices on oil for the next 6 to 12 months and the just announced layoffs and shutdowns in oil field services and leasing will North Dakota continue to be a high growth state.

Another one is that Michigan is just now reversing population decline that ran unabated since 2000. Was the relatively insignificant increase (10,000 if I recall) a sign of a rebound there or will the exodus continue? Detroit continues to shrink, is the outflow really going to benefit the surrounding suburbs market at this point?

I just returned from a five week cross country trip, the Nashville, TN area certaintly seems to be poised for continued quality growth so the Tennessee placement makes sense to  me. Oakland, CA was another area visibly on the upswing and the LA suburbs and Bay Area seemed to present some opportunity.

@Ray Browne  

I'm not an economist, but here's what I think.

the decline in oil prices will affect ND and other oil producing states including PA., where layoffs are already occurring.

I was in Nashville for a speaking engagement and lived there for several years, I think Nashville is a great place.  TN taxes don't seem to be prohibitive either.

Most of the Detroit decline in population has been covered by gaining population check out Oakland County, MI.

LA & SF are always desirable areas and probably always will be, the only knocks are high prices and high taxes.

Thank you David. I am definitely seeing increases in the Memphis & Chattanooga markets.

David great post. Just to clarify CA property taxes are very low.....income tax not so much. I see LA hitting a flat spot but still gaining slowly. UCLA agrees but sees a big issue coming 2020 with backwards demographics. Nobody is having kids like before.

@Matt R.  

Thanks for the clarification, I was thinking income taxes, as well as corp/LLC taxes and fees.

CA state income tax is 12.3.

PA state income tax is 3.2, big difference!

Originally posted by @David Krulac :

@Matt R.  

Thanks for the clarification, I was thinking income taxes, as well as corp/LLC taxes and fees.

CA state income tax is 12.3.

PA state income tax is 3.2, big difference!

David, in TN, state income tax is ZERO!  I don't think I will be moving to CA any time soon.

I have to ask, is asking a group of sales people if their product will go up or down in value a terribly useful survey?

And BTW, Texas and New Hampshire are also zero income tax states (and NH has no sales tax either).

@David Krulac  

  you only pay state income tax If you live there not if you invest there.

@Jay Hinrichs  

Yes, but if you live there and invest elsewhere, you still pay CA taxes.  I've even heard that former residents of CA are still being taxes for retirements from jobs in CA.

@David Krulac  

  David that is correct if you live in CA and derive income from other areas you pay CA tax's just like me in Oregon . I live here but derive income from about 15 states and it all funnels to my Oregon tax .. which is second only to CA ...

And yes California is nuts chasing folks for tax.. but you know that's just the price you pay to live in paradise  :)  nice weather high paying jobs.. etc etc.  I would pay what ever it takes to live in the BAy Area.. its only family reason that I have to hand out here in Oregon in the doom and gloom of the winter which last 9 months.. but the RE market makes up for it a little its quite robust.. not in a mid west fashion its not a cash flow market but if your a retail flipper you can make big dough here consistantly

@David Krulac  , just as a point of clarification that 12.3% tax bracket is only for couples making over $1,017,000 a year.  CA income tax rates start at just 1% so a couple making $100k pays less than in many states.  Granted that isn't very much money, but it is more than the average US household makes.  I've seen this misrepresented by even the financial media who don't seem to understand effective tax rate vs top tax bracket.

Blue is percentage  of US households

Gold is percentage of US value

Grey is percentage of US renters

@Jay Hinrichs  ,

I live in Washington but pay Oregon income tax for the investment income from Oregon.  Is Oregon an exception to the "you only pay state income tax If you live there not if you invest there"?

@ David Krulac

Thank you for this information ! 

Some folks may want to know that while Tennessee does not have an income tax on wages we do have the "Hall Tax". It is applied to interest and dividend income and probably in some situations to real estate income . The rate is 6 % .

     There is an exclusion of about $2500 but anything over that amount is taxed at 6% I believe.  Obviously check it out with a CPA . In addition Tennessee has a very high sales tax . 9.75 % on many items and I think 7.25% on food.

   This is meant as information and not discouragement. I think many cities in Tennessee are great investment opportunities. Nashville is my home town so I feel great about it easpecially !

Anne

@Anne Wallace  

Was in Nashville this speaking at a real estate convention, always enjoy my times there.

PA has 3.2% income tax flat rate on everything, and a 6% sales tax, but NO sales tax on food or clothing.

DE has no sales taxes and in general the real estate taxes are low in DE also.

@Melodee Lucido  

 Memphis had city and county tax''' tax is an issue in Memphis like it is in Texas.

and if you don't live in TN  the state income tax is moot makes no difference

I don't think taxes are anywhere near an issue in Memphis like they are in Texas.  As a percentage of value they may be high, but at least they are fairly stable.  In Texas, that is the real issue for investors - will they change on a yearly basis(?).  

Kiplingers Magazine has an interesting article (pg 72-73 - may be online, but I don't know) in their just published January '15 issue showing 100 cities in the US and an expected snapshot of home prices.  Shows percentage of change in home median price, change since peak pricing, affordability index and homes with 10% or less of equity.

Really interesting to see the cities which are "hot" investment cities and often come up as great turnkey cities show up with plenty of room between todays price and peak pricing as well as low affordability indexes and a high number of properties with less than 10% equity.  Some of those areas match the Realtors survey and some don't.  Like this article, just interesting things to keep an eye on.

Ditto @Chris taxes are reasonable in Memphis and easily appealed at no cost. 

(Our guy does it for a third of what he saves you).

@Scott Pigman  

no sales tax yet.. jeanne shaheen just got reelected. NH is a blue state now it appears, along with the rest of the northeast

Originally posted by @Account Closed :

@Scott Pigman 

no sales tax yet.. jeanne shaheen just got reelected. NH is a blue state now it appears, along with the rest of the northeast

I guess that doesn't bode well for the Nashua mall, does it?

(The mall is right on the border with sales-taxed Massachusetts, for those of you unfamiliar with the area)

At first I thought you meant that Shaheen was back as governor again. I had to go check Google to see what's been up since I lived there. Hey, If Jerry Brown can come back...

@Scott Pigman  

on top of shaheen we got maggie hassan for governor and kuster for congress. all (D)

did you mean scott brown? jerry is in cali

Originally posted by @Derek LeBlanc:

did you mean scott brown? jerry is in cali

No, I did mean Jerry :-) I was thinking that with him back in Cali and a Cuomo again in NY, and a Clinton running for president (possibly against a Bush) it feels like we're living in a rerun. Or at least a Hollywood reboot.

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