Housing Prices in America

[Poorohman]

On 3/20/2024 at 8:57 AM, tailingpermit said:

Conventional/Fannie Mae is not “government subsidized,” but the FHFA controls their conservatorship. Conventional loans have down payment options as low as 3%, you must be getting confused with portfolio lending. 
 

There is a waiting period, look up occupancy affidavit.  
 

You must be god awful at your job. 

That's funny bc you don't know wtf you are talking about.  But go ahead.  I laugh.

[Poorohman]

On 3/20/2024 at 8:55 AM, renoskier said:

No, this was the most practical way to make transactions happen because the seller is more able to "afford" the commission and fees from the equity in their home. Buyer's are often cash strapped and this allowed many to buy sooner because they could use most of their cash for the down payment. The $$ were always "baked" into the market prices.

Also, I remember going though all of this about 25-30 years ago and I don't know why the 6% number is always sighted as some fixed rate. Sales commissions have always been negotiable and in the last 15-20 years, at least in northern Nevada, have usually been closer to 5%; 2.5/2.5% split between the agents and in the last 5 years or so, 4%.  There have also been "discount" options, such as "Help U Sell" and "Assist to Sell", available for at least 30 years.

The adoption of the internet has changed the RE biz dramatically, mostly in the way that buyers find homes they are interested in. My guess is that moving forward we'll see a lot more sales in which the buyers represent themselves. This change will certainly lower sales costs but may also lead to more potential legal problems: E.g. disclosures.

any thought @toonkee

personally, I'm glad I got out when I did, it was a great 36 year run

No it was not the most practical way.  Buyers pay their agents.  Sellers pay their agents.

Funny you are arguing about this.  And I'm a Realtor who should agree with your stupid take.

[Poorohman]

On 3/20/2024 at 8:57 AM, tailingpermit said:

Conventional/Fannie Mae is not “government subsidized,” but the FHFA controls their conservatorship. Conventional loans have down payment options as low as 3%, you must be getting confused with portfolio lending. 
 

There is a waiting period, look up occupancy affidavit.  
 

You must be god awful at your job. 

Thank you for affirming what I said btw.

[tailingpermit]

On 3/20/2024 at 1:44 PM, Poorohman said:

That's funny bc you don't know wtf you are talking about.  But go ahead.  I laugh.

Correct me, please. 

[tailingpermit]

On 3/20/2024 at 1:48 PM, Poorohman said:

Thank you for affirming what I said btw.

You said there was no waiting period for conventional loans, dummy.  

[tailingpermit]

On 3/20/2024 at 1:45 PM, Poorohman said:

No it was not the most practical way.  Buyers pay their agents.  Sellers pay their agents.

Funny you are arguing about this.  And I'm a Realtor who should agree with your stupid take.

Let me guess, part time realtor. 

[East Coast Aztec]

On 3/20/2024 at 9:18 AM, renoskier said:

yeah, it's just not the same anymore 

With so much of the business happening remotely, nobody really gets to know each other. When I started in 1985, we had well attended MLS meetings on Tuesdays and office meetings/tours on Wednesday. And then there were at least 2 or 3 big "Board of Realtor" events each year and a Chamber of Commerce "mixer" every month.

I even got one of my mother's younger co-workers from one of those events.  Real estate agent industry is (or at least was) the Greek life of professional services.  And every RE firm was just a different chapter house.  

[tailingpermit]

On 3/20/2024 at 3:06 PM, East Coast Aztec said:

I even got one of my mother's younger co-workers from one of those events.  Real estate agent industry is (or at least was) the Greek life of professional services.  And every RE firm was just a different chapter house.  

I bet that “younger co-worker” is still using her same headshot on a business card from when you porked her. 

[bornontheblue]

Just saw that Biden wants to limit Deferred gains on 1031 exchanges to $500,000

I highly doubt this will pass, however I would not be against it. 

 

 

[tailingpermit]

On 3/20/2024 at 3:47 PM, bornontheblue said:

Just saw that Biden wants to limit Deferred gains on 1031 exchanges to $500,000

I highly doubt this will pass, however I would not be against it. 

 

 

Where’s the story, tax nerd?!

[bornontheblue]

On 3/20/2024 at 2:35 PM, tailingpermit said:

Where’s the story, tax nerd?!

Oh I just got an email alert from the Idaho State society of CPAs, 

Hold on: 

A bunch of tax proposals that will never pass. Interesting to think about though 

Tax Rate Increase. The top marginal tax rate would increase from 37% to 39.6% on taxable income over $450,000 for married individuals filing a joint return ($400,000 for unmarried individuals). The corporate tax rate would be increased from 21% to 28%. 

Phase Out of Capital Gains Rates. Long-term capital gains and qualified dividends would be subject to ordinary income rates to the extent taxable income exceeds $1 million ($500,000 for married taxpayers filing separately).

Increase in Medicare Tax and Net Investment Income Tax. For taxpayers with more than $400,000 in earnings, the top rate for the Medicare tax on employment earnings would be increased from 3.8% to 5%. Similarly, the top net investment income tax rate would be increased from 3.8% to 5% for taxpayers with more than $400,000 in income.    

G&S Insight: When taken together, the combination of the marginal tax rate increase, capital gains phase out, and increase in net investment income tax, results in a top federal marginal rate on long-term capital gains and qualified dividends of 44.6%. 

Expansion of the Net Investment Income Tax. The net investment income tax would be expanded to apply to business income of taxpayers with adjusted gross income over $400,000 ($200,000 for married taxpayers filing separately) to the extent such income is not otherwise subject to the net investment income tax or self-employment tax. This provision would apply to income allocated to a taxpayer from an S corporation or partnership. 

Treat Death and Gifts as Taxable Events. The proposal would treat transfers of appreciated assets by gift or death as realization events subject to capital gains tax, subject to a $5 million per donor lifetime exclusion and certain other exceptions (e.g., transfers to a spouse or charity). The proposal would include a deemed transfer for property held by a trust, a partnership, or other non-corporate entity to the extent such property has not been subject to a recognition event in the past 90 years. 

Net Wealth Minimum Tax. A 25% minimum tax that includes a mark-to-market regime with respect to unrealized capital gains for taxpayers with a net worth exceeding $100 million. The proposal would include installment payment options as well as an election for “illiquid taxpayers” to only include unrealized gains from tradable assets in the calculation of their tax liability; however, such illiquid taxpayers would be subject to a deferral charge (of no greater than 10 percent) upon recognizing gain on non-tradable assets subject to the election. For this purpose, a taxpayer is illiquid if tradable assets make up less than 20% of their wealth.

Phase Out of the Carried Interest. For partners with taxable income (from all sources) exceeding $400,000, a partner’s allocable share of income from profits interests in investment partnerships (i.e., carried interest) would be subject to tax as ordinary income and self-employment tax regardless of the character of the income at the partnership level.

Excess Business Losses. The proposal would make permanent the excess business loss limitation that was introduced in the Tax Cuts and Jobs Act and is currently set to expire for taxable years beginning after January 1, 2029. In addition, any excess business loss carried forward from a prior year would be treated as an excess business loss in the current year instead of as a net operating loss carryforward. 

Expansion of Recapture Under Section 1250. With respect to depreciation deductions taken on section 1250 property (e.g., depreciable real estate) after the effective date of the proposal, gain on the disposition of such property would be treated as ordinary income. Depreciation deductions taken on section 1250 property prior to the effective date of the proposal would be subject to the current rule and recaptured as ordinary income (subject to a maximum rate of 25% with respect to noncorporate taxpayers) to the extent such depreciation exceeds cumulative straight-line depreciation. The proposal would not apply to noncorporate taxpayers with adjusted gross income of less than $400,000 and would be effective for depreciation taken on, and dispositions of, section 1250 property in taxable years beginning after December 31, 2023. 

G&S Insight: The recapture proposal could have a significant impact on real estate investors. Individual taxpayers would see more gain on disposition recharacterized as ordinary income and subject to full ordinary income rates. Corporate taxpayers may also be impacted to the extent they have capital losses. Assuming section 1031 remains in its current form, this change may increase the gain recognized on otherwise tax-free section 1031 exchanges involving the swap of section 1250 property (e.g., a building) for non-section 1250 property (e.g., land).

Partial Repeal of Section 1031. The proposal would limit gain deferred under section 1031 to $500,000 ($1 million in the case of married individuals filing a joint return) per taxpayer per year.

Prison Facility Rents. The proposal would treat any rents received from a prison or detention facility as excluded from both the 95% and 75% gross income tests for REIT qualification purposes.

Creation of Neighborhood Homes Credit. A new allocated tax credit regime would be introduced to foster new construction and rehabilitation of for sale property as well as rehabilitation by existing homeowners in neighborhoods located within certain census tracts. Among other things, the proposed credit would be limited to projects that are a single-family home (including homes with up to four dwelling units), a condominium or a residence in a housing cooperative. 

Expansion of the LIHTC. The proposal would make several changes to the low-income housing tax credit rules, including:  

• increasing the housing credit dollar amount allocated to the states from the greater of $2.75 per capita or $3.185M in 2023 to the greater of $4.25 per capita or $4,901,620 in 2024 and the greater of $4.88 per capita or $5,632,880 in 2025;

• modifying the so-called “50% test” for projects financed with tax-exempt bonds (private activity bonds) such that a building would be eligible for the 4% credit based on 25% tax-exempt financing of the building and land; 

• repealing the qualified contract rules in section 42 such that the extended use period would no longer terminate upon failure of a state or housing credit agency to respond to an owner’s request for a qualified contract following the compliance period; and 

• replacing the right of first refusal safe-harbor in section 42(i)(7) for tenants, resident management corporations, qualified nonprofit organizations, or certain governmental agencies, with an option to purchase. In addition, the rules related to the minimum purchase price would be amended to eliminate the component related to federal income taxes attributable to the sale.        

[Akkula]

OMG, is the Biden Admin finally "getting it?"  You wonder why people don't think the economy is good?  Here is Exhibit A!

Biden Suggests a Bigger Federal Role to Reduce Housing Costs - The New York Times (nytimes.com)

"The report documents how, over the past decade, home prices have significantly outpaced wage growth for American families. That has pushed ownership out of reach for middle-income home shoppers and left lower-income renters on the brink of poverty.

A quarter of tenants — about 12 million households — now spend more than half their income on rent. Prices are so high that if a minimum-wage employee worked 45 hours a week for a month, a median rent would consume every dollar he or she made.

Behind all this, the report said, is a longstanding housing shortage. The lack of housing has become a rare point of agreement among Democratic and Republican lawmakers."

 

[grandjean87]

It's a market failure.  Macro and localized.  It's not going away soon as in the supply side will adjust to the shortage bringing down prices to affordability.  

[Jeffkills]

On 3/11/2024 at 6:28 PM, tailingpermit said:

That’s @Jeffkills’s house, valid.  

Wait and see...

[bornontheblue]

On 4/3/2024 at 11:20 AM, Jeffkills said:

Wait and see...

Jeff. Can you please set @Bob free. 

unban @Bob

Free @Bob

[Jeffkills]

Um, so yeah.  Bob isn't going to be banned. 

@mugtang, @retrofade

Can we please unban @Bob

Thanks, 

[tailingpermit]

On 4/3/2024 at 1:32 PM, Jeffkills said:

Um, so yeah.  Bob isn't going to be banned. 

@mugtang, @retrofade

Can we please unban @Bob

Thanks, 

@retrofade now works for $100 an hour. 

[Jeffkills]

On 4/3/2024 at 11:37 AM, tailingpermit said:

@retrofade now works for $100 an hour. 

I. C. 

[bornontheblue]

On 4/3/2024 at 11:32 AM, Jeffkills said:

Um, so yeah.  Bob isn't going to be banned. 

@mugtang, @retrofade

Can we please unban @Bob

Thanks, 

THANK YOU THANK YOU THANK YOU 

WELCOME BACK BOB !!!!!!!!!

[azgreg]

After looking for a house in Vegas this thread checks out.