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I think there will be a signifigant drop soon. the population is growing, but this has always been the case and prices didnt go up this high before. Eventually what will hapen is people will quit buying houses and the prices will then be lowered. Most families cant afford a 500000 dollar house. Especially if we go into a recesion. The rising interest rates may also have a lowering affect on homes. Rising oil isnt helping people either. Ive heard there are signs of slowing right now. As far as natural disasters are concerned, I know that after the northridge earthquake in CA house price droped a lot.
Posts: 205 | From: ca | Registered: Aug 2005
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also next fed rate meeting coming up quick this time. in about 5 weeks. i think it is on november 1st.
Posts: 149 | Registered: Apr 2005
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Another thing I heard on the news last night that they may be changing the tax laws and one thing they want to do is reduce or eliminate your mortage interest.A lot of people will sawllow that big payment for a tax deduction.But with no deduction they tend to be more of a price shopper.
Posts: 6008 | From: phoenix az | Registered: Mar 2005
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Real dstate is not going to go away, unless they set up some sort of high-valued real estate protection. That's where the rich store their assets and dodge taxes. If anything happens to real estate, someone rich or in a high place will do something about it.
-------------------- May your trading build your character as well as your portfolio. Posts: 1763 | Registered: Jan 2005
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Bush's tax panel would limit break for homeowners Dems complain plan would hit California, other blue states hard Kathleen Pender
Wednesday, October 19, 2005
A tax reform proposal agreed upon Tuesday by President Bush's advisory panel would eliminate the federal deduction for state and local taxes and sharply limit the tax break for home mortgage interest.
That's leading some Democrats in California and New York to assail it as an attack on the blue states -- the ones that voted Democratic in the 2004 presidential election -- which tend to have higher taxes and housing costs.
"The Bush panel's recommendations are a double-barreled blast aimed squarely at California and the middle class," state Treasurer Phil Angelides said in a press release. "These recommendations are good for Texas, but bad for California."
Sen. Charles Schumer, D-N.Y., called it a pernicious proposal and a "dagger to the heart of the people of New York."
The bipartisan panel, appointed by Bush early this year, was asked to identify ways to simplify federal tax laws and redistribute the "burdens and benefits" of federal tax "in an appropriately progressive manner while recognizing the importance of homeownership and charity." Its proposals, on balance, are supposed to neither raise nor lower federal tax revenue.
Most observers think the proposal has little chance of adoption because of the broad range of interest groups -- not to mention political sacred cows -- it would threaten. Still, the plan is expected to spark a far-reaching debate on tax reform.
The plan, which the panel plans to finish up next week, would simplify taxes for the about one-third of taxpayers who itemize deductions -- by eliminating them. Schedule A, the IRS form used to itemize deductions, would go bye-bye along with many other tax-return forms.
The deduction for interest on a home mortgage, the biggest write-off for many taxpayers, would be eliminated and replaced with a tax credit.
Under current law, taxpayers who itemize deductions can deduct interest on up to $1 million in mortgage debt. The interest can be on one or two homes as long as it doesn't total more than $1 million.
A deduction reduces income before taxes are calculated. The higher your tax rate, the bigger the benefit.
A tax credit, by comparison, reduces your final tax bill dollar for dollar, regardless of income.
The proposal calls for replacing the mortgage-interest deduction with a tax credit equal to 15 percent of the interest paid on one home. The credit could be claimed even by those who do not itemize deductions today.
The credit would apply only to interest on mortgages up to the limit for loans guaranteed by the Federal Housing Administration.
The FHA limit varies by region, but in most parts of California, it is $312,895. That is well below the median price of a home in California ($568,000) and less than half of the median price of a Bay Area home.
In many parts of the country, the FHA limit is above the median home price. The average FHA limit nationwide is $265,000.
The plan "would be devastating for states like California where real estate values have skyrocketed and affordability is at its lowest levels," said Sen. Dianne Feinstein, D-Calif.
The proposal would eliminate any tax break for interest paid on a second home or a home equity loan or line of credit.
Under the proposal, the first $600,000 of profit from the sale of a primary residence would be tax-free for married couples filing jointly. That amount would be indexed to inflation. Any profit over that amount would be taxed as ordinary income.
Under current law, couples can exclude up to $500,000 in profit from the sale of a home, but anything over that is taxed at the lower capital gains rate.
Jerry Howard, chief executive of the National Association of Home Builders, said the plan, if enacted by Congress, would "put an immediate chill on the housing markets and reverse almost a century of housing policy."
On the plus side for blue states, the proposal also calls for eliminating the alternative minimum tax, a separate, mind-boggling system that raises taxes for a small but rapidly growing number of middle- and upper-middle-income taxpayers. It could affect 30 million Americans in 2010, up from 2 million in 2002.
The way most people fall into the alternative minimum tax is by claiming large deductions for state and local taxes, said Clint Stretch, director of tax policy with the accounting firm Deloitte & Touche.
On a per-capita basis, the states with the most people paying alternative minimum tax are New Jersey, New York, Connecticut, California, Massachusetts and Maryland. All are blue states.
Repealing the alternative minimum tax would reduce taxes for many Americans, but eliminating the deduction for state and local taxes would raise them for many more.
Whether individuals would be better or worse off overall depends on their personal situation and other aspects of the tax plan.
"The political problem is that a lot of the people who will benefit from the AMT being repealed don't know they have the problem yet," Stretch said.
The proposal also would reduce the number of federal tax brackets. Today, there are six, ranging from 10 to 35 percent. Under the proposal, there would be four, ranging from 15 to 33 percent.
The panel endorsed two plans for taxing capital gains from investments.
Stretch said the tax panel was trying to simplify taxes without shifting the burden rich to poor, from poor to rich or from state to state.
Ideally, the tax burden paid by the top 20 percent, the next 20 percent and so on would be the same before and after reform. But even if that happens, there could be big tax-burden shifts within those groups, and an individual's taxes could change dramatically based on whether they own a home, what kind of investments they have and other factors.
"This is a very complicated puzzle to try to piece together," Stretch said.
So much for tax simplification.
Net Worth runs in the Business section Tuesdays, Thursdays and Sundays. E-mail Kathleen Pender at kpender*sfchronicle.com.
Posts: 190 | Registered: Sep 2005
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Rates go up the market will slow down this winter....then when summer hit's again the market will maintain it's upward trend. Prices will not drop they will stagger. The housing market has slowed down already, look at the history, winter is slow, summer is great....just the opposite of the stock market.
THERE WILL BE NO REAL ESTATE CRASH.
GOOD DAY ALL
-------------------- "IT'S NOT LUCK IT'S DAYTRADIN'"
"HERE'S MY 2 CENT'S, SEE IF YA CAN TURN IT INTO A BUCK" Posts: 5641 | From: Florida | Registered: Sep 2004
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quote:Originally posted by glassman: the real estate bubble? it won't pop and crash, just stop inflating so much, and probly drift down, but just a little..
i do like gold for a 6 month plus hold... silver too...
the eldest baby boomers control the market for now...whatever they decide will be hot next, will be hot..if the housing market stalls, but doesn't crash? stocks should pick up, the problem there is nobody trusts the Street much these days, can't imagine why
.. lets see? 1945? they be 55 to 65 years old now.... better start investing ( for a 5- 10 year outlook)in nursing home and elder care soon
who makes depends?
gold is about halfway there now, up about 15%..... will start letting some go if it hits 500$ this week or next....
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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