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Michael,
I am pretty sure anything held over one year qualifies for long term capital gain rates:
http://www.bankrate.com/brm/itax/tax_adviser/20050513a1.asp
As was mentioned before, make sure to consider AMT. IANAL or an accountant or anything like that, so do your own tax research.
austingal:
Perhaps banking on inheritance is what will keep some afloat. I'd imagine the boomer's parents were from the great depression era and were frugal and dedicated savers. With the tax laws slanting towards reducing and eliminating these inheritance taxes, many boomers would be in good shape to a) sell the parent's estate b) collect the parent's gift tax exlcusion of 22k per year and c) take a big chunk of assets tax-free when they pass away.
Disclaimer: I am aware that this is not the situation of the majority of boomers and their parents, but there would be many in this situation.
Jimbo, great post.
Thanks man!
That answers my question!
Kick ass!
Just a little bit bullish thread, and so many trolls came out.
I was doubtful myself about the speed and extent of the crash. But it's happening, and happening much faster than I thought. I will say "10 to 20% is in the bag for this year" !
Take a look at MLS 613849. More than 1950 sqft on 5500+ plot, the asking price has been reduced from 895K to 850K. This is in red hot Cupertino, where no price is too high for dual-income techie Asian families. But it is on market for 67 days now, and it's already over a month after the price has been reduced.
Another one is 628664. It's listed at close to 1M. This is a brand new house for Cupertino (10 yr old). According to Zillow it was bought in 1996 for 900K. The gain of 100K just about covers the property taxes paid in these 10 years. Forget the interest. What a great investment !
I think, this is the last year for trolls to try posting their crap. What will surfer-x do when there are no trolls to spray his rant on ?
Jimbo-
No, we will be moving to Texas or to the Midwest. We may hang on for two more years, until our oldest is ready for school, or we may not.
I just thought it was interesting to see that another first-tier city, like NY, is much, much cheaper than SF or LA, RE-wise.
what is truly great about our newest fucking maggot troll, Alabbple, is that the fucker posted his bullshit oh fuck you mean I'm not rich bullshit at 12pm on saturday, FROM APPLE. Enjoy your fucking work that much? Enjoy making a payment of 8x your fucking income on a stucco $hitbox in san hosebag, whoops I meant crapatino, but arent' they the same thing? Weren't you more happy when you were driving a honda with a big tail pipe?
PS
sorry my last statement was cut off. Hey come on down to the blog party as i would love to do the world a favor and bounce a fucking aluminum louisville slugger off your fucking 2 ft thick skull.
PS FUCK YOU
JBR housing bear here, but reading through this thread it occurred to me to ask whether or not the run up in residential real estate might in part have to do with a relative decrease in availability of desireable jobs? Could the increased asset value reflect a bidding war amongst people who want to gain access to jobs that can keep up with globalization, inflation and taxes? But at the same time, these very jobs are consolidating into the urban areas, the very hotspots of residential real estate activity. Not enough of these jobs to go around, so demand far outstrips supply, with a concurrent increase in the prices of everything related to obtaining such jobs.
Another question: why is it so many here seem unconcerned about the costs of any bubble breaking getting thrown at the feet of taxpayers? It rates a mention here or there, but mark my words, when huge institutional investors responsible for pensions, large mutuals, etc. start showing signs of folding, the political pressure to bail them out with taxpayers will be enormous. We will see headlines after headlines blaring plaintive wails like "Retirement Futures Down the Drain"...unless "government" (read: taxpayers) "stabilizes" (read: bails out with taxpayers) the situation. By that time (10-15 years?), I hope to be able to move my company offshore because by then I should have a geographically diversified client base.
Joe,
The average home price in Mendham was $950k:
http://www.dailyrecord.com/business/forecast2005/index-2.htm
That place sounds pretty comparable to Danville.
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From Linda in LA-LA-Land:
"There is certainly a possibility that we have reached a new level of ownership premium our society is willing to pay. The ratio of housing costs to income may have changed forever. Not too long ago, people used to buy stocks for their dividends. Now they buy it because they think someone else will buy from them at a higher price. Things change.
From some reports I read a few days ago, home prices in UK and Australia haven’t exactly crashed. Who knows what will happen in US ? I am willing to take the risk of that happening. Because I think the probability is low. This is not an inflation in asset priceses alone. There is a credit bubble. I am betting on it to burst. If I am wrong so be it."
Most of us here debated --and dismissed-- the bulls's "new paradigm" arguments long ago as basically meritless and concluded that reckless lending/borrowing (thanks to the Fed & GSEs) and rampant, unsustainable speculation (thanks to good 'ol greed & fear) were primarily to blame for the housing bubble. However, when it comes to certain parts of the country --California being pre-eminent among them-- it seems pretty likely that, while prices must eventually correct, they are not likely to fall so far as to bring California and other so-called "prime" areas into line with high affordability levels common in other states.
Are there any truly secular “new†developments which might account for at least some of the rise in housing prices relative to other asset classes and might --if they prove to be permanent trends-- limit the extent of the eventual correction?
Some possible candidates:
1. Rise of NIMBYism, Urban Boundary Limits (UBLs), which are very popular in CA & OR, and pseudo-environmental anti-development laws. These are measurably constraining supply and artificially raising the cost of what new housing stock does get built, reagrdless of whether it's for rental or sale.
2. Shift in federal tax codes since 1996, heavily favoring RE investment/speculation over other assets. $250/500K capital gains exemption, mtg. interest deduction on 2nd homes, 1031 exchange, etc.
3. The tremendous rise of GSEs and MBSs/CMOs since mid-1990s in providing unprecedented levels of mortgage liquidity and risk underwriting (shifting loan default risk from lenders to FCBs and private investors).
Discuss, enjoy...
HARM
#housing