Posts Tagged ‘financial crisis’
Wayback Wednesday… Recovery?
- Image by kenjonbro via Flickr
Recovery… In it or do we need to go to it? That was my question two years ago this week… and it is STILL a valid question. And two years ago, I don’t think there were many people (including me) that were expecting the housing slump to last this long.
But here we are, not knowing if a bottom to the market has been established or if there is more blood that needs to run in the streets.
At least now, more of us in the real estate community have figured out that stimulus and incentives aren’t the answer… JOBS are the answer. There are too many potential buyers out there that are worried about the security of their jobs. Demand can’t rise until buyers don’t feel threatened.
And that means that the Supply side of Supply/Demand will be out of whack… even thought the supplies have be mostly dropping for well over a year (compared to the previous year). And even though supply has been coming down, there have been reports of a wave of foreclosures just out of sight over the horizon (those reports have been with us for well over a year, too).
On the flip side, there are some pretty good deals. Mortgage rates are ROCKING… I heard a report today that rates hadn’t been this low in 60 years. If you ARE in a position to buy, it might be the best time in a generation. If not, I understand…
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View CommentsThere IS a New Real Estate Transfer Tax in the ObamaCare Law
- Image via Wikipedia
One of the forums in which I participate has had stories on both sides of this issue for a couple of months… with the more conservative members saying that there is a 3.8% sales tax on the sale of homes, and those that are more supportive of the President and his policies saying that there isn’t.
Neither side was real specific about their information source… talk radio for some, blogs for others… nobody seemed to be going to the source… the 20,000+ page law signed by the President. In all fairness, there is a LOT of room in 20,000 pages to hide a lot of little Easter Eggs like this. And being fair to the other side, if there isn’t a tax, the bill isn’t going to say “there is not a tax” anywhere…
I have an answer…
There is indeed a tax on the sale of real estate. It doesn’t apply to many people, but it WILL apply to some people that have profit from the sale of their homes. Starting in 2013, those with incomes over $200,000 will have to pay a 3.8% tax on profit from the sale of their primary residence or investment properties. The exact amount will be based on a formula that includes the profit from the property and the income above $200,000. The tax is not an income tax, but rather it is a “payroll tax”… officially it is a Medicare Tax.
It does not just apply to real estate, but also applies to investment income and dividends.
The bottom line is that both groups are right… and both are wrong.
But…
It will drive another nail into the luxury real estate market. It has been in the doldrums for a while. Adding new taxes will not get it going again. And if you are thinking that this only affects ‘the wealthy’, think again. Those homes are not built by ‘the wealthy’. Those homes are not renovated by ‘the wealthy’. Those consumers are more likely to hire contractors to do improvements. And they are more likely to update more often… They are a driver in the housing sector. This added tax is NOT putting gas in the tank…
View CommentsWayback Wednesday… Don’t Hide in the Sand…
A couple of years ago I wrote about folks facing foreclosure. I would love to say that things have really changed in the last couple of years, but I can’t… They have actually gotten worse in many regards. But we might be seeing the light at the end of the tunnel… but it is just a pinprick of light…recent numbers are showing that the tide of foreclosures might be easing… if only slightly… from record levels.
View CommentsWayback Wednesday… Point/Counterpoint on Foreclosures
Two years ago, I was looking at foreclosures. There were several bad headlines, and I took a moment to look a little deeper.
View CommentsFlashback Friday… Valuation?
There are a lot of questions that revolve around property valuation. Sellers want to know how much their homes are worth and Buyers want to know the ‘right’ price to pay. Specifically, Sellers don’t want to leave money on the table, and buyers don’t want to put too much money on the table for the Sellers to take.
There are a lot of ways to try to figure out what a house is worth, and a lot of people that can provide opinions about that… And they are just that, opinions.
Except for one… There is one indisputable market valuation metric.
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