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I think it's worse than anyone is saying. I've already lowered my price to below what it was appraised for in 2000 and no buyers. I've lost 100K and still bleeding money. The inventories are so high, it will take years to sell them all. Especially if you take the failed listings into account.
Here's another thing no one is talking about. They are debating a major tax change that would take away the mortgage deduction from families making more than 40K. If that happens, the housing market will die completely. Will it happen? Who knows. I hope not. We will become a nation of renters and whoops there goes the middle class. Sounds like a recipe for disaster to me.
Here's another thing no one is talking about. They are debating a major tax change that would take away the mortgage deduction from families making more than 40K. If that happens, the housing market will die completely. Will it happen? Who knows. I hope not. We will become a nation of renters and whoops there goes the middle class. Sounds like a recipe for disaster to me.
Yellowsnow, I think you need to add some disclaimers to your post w/out scaring everyone...
Here is a generalization of what's proposed...(homes over 3000sq ft it is being proposed a GRADUAL decrease of the deduction..)
Tax' on Interest Deductions Gains Support
By Kenneth R. Harney
Saturday, October 13, 2007; Page F01
Although the real estate industry opposes the plan, a key House committee leader's proposal for "carbon tax" cuts in mortgage interest deductions is attracting strong support from environmental and scientific groups.
Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, wants to phase out mortgage interest write-offs for houses larger than 3,000 square feet, using a graduated scale that ends at zero deductions for properties with 4,200 square feet or more.
Owners of homes of 3,000 to 3,199 square feet would be eligible for only 85 percent of the mortgage interest deductions they may now take. The bigger the house, the smaller the deduction: Homes of 3,600 to 3,799 square feet would lose 60 percent of the interest deductions, homes of 4,000 to 4,199 square feet would lose 90 percent, and homes of 4,200 square feet or more would get no deduction"
I pasted the general gist of the article...I don't think this will be passed anytime soon (and it will be modified like everything else in Congress no doubt), however its good food for thought to become more energy efficient and bring these topics up....
Personally I'd prefer it if they got rid of the mortgage interest deduction (along with all the other itemized deductions) completely. It'd make the income tax simpler, and fairer. Why should someone get a tax break for living in a million dollar home?
As far as a nation of renters... when housing becomes affordable, people will own.
The biggest obstacle to home ownership is overpriced homes.
I think it's worse than anyone is saying. I've already lowered my price to below what it was appraised for in 2000 and no buyers. I've lost 100K and still bleeding money. The inventories are so high, it will take years to sell them all. Especially if you take the failed listings into account.
Here's another thing no one is talking about. They are debating a major tax change that would take away the mortgage deduction from families making more than 40K. If that happens, the housing market will die completely. Will it happen? Who knows. I hope not. We will become a nation of renters and whoops there goes the middle class. Sounds like a recipe for disaster to me.
Why would more people choosing renting than buying destroy the middle class? If it's cheaper than owning, it just might help middle-class families save more and put more into other investments.
The area that would suffer would be all the people either directly or indirectly involved in the housing industry: construction contractors and trades, real estate professionals, building material suppliers, mortgage professionals, inspectors, appraisers, etc.. I read that 1/3 of all jobs created in the U.S. over the last five years would fall into this category. THAT would hurt the middle class.
Couple things....Not everyone benefits from the deduction. Only people who have a mortgage do and only the ones who itemize their deductions (which is a small percentage anyway).
Also, in many major metro areas, you have "million dollar homes" that are not 3000sq ft. (many are smaller but the "land" is worth much more), so your million $ homes would not be affected by this proposal. More people would be affected in mid-size markets where alot of McMansions have or will be popping up.
Lastly, discussing this is like talking about Social Security. Basically the third rail of politics. Yes, I think we should look at the MID, however it will be a LONG tiime before something ever it done about it
Our house has been on the market about 4 months. We have had showings however no bites. In that time we have taken advice from feedback and have made many improvements. New cabinets, tile in kitchen etc.
At this point we feel that we need to decrease the price of the house because there are other new homes equivilant to ours going for 10 - 20,000. more. Not much of a difference. We live in the northeast in a small town in Orange County, NY About 15 minutes outside of Middletown. Great Schools and a good community. We have already dropped our price about 15,000.
A couple of years ago we had two things going for our real estate prices. 9/11 pushed many people out of NYC to our area and the housing boom. Now people are still coming up however price of gasoline is up (this is a long commute to the outskirts of NYC about 1 hour and into manhattan about 2 hours)and the housing boom is over and houses are not selling that readily in our area.
We have a teenager that needs two more years to finish high school. We're wondering If we decide to stay the two years will the value of our home increase? And will it be easier to sell?
unfortunately the only difference in the houses is that that one is new and yours is used bottom line
gotcha is being realistic and honestly, I see the same and I am very good with predictions. Housing prices will continue to slide AND correct to REAL levels (as in pre-2000 levels). That means all that value in your home is GOING to be gone in the next several years (4-5 years is what I am thinking). Why do you think builders are so anxious to sell even at a loss? (Why pay property tax on something that you ARE going to lose money on - hence are selling their land and houses on auctions to get rid of them). As to when the houses will start picking up in value (well that is going to happen every SINGLE year... but wait didn't I just say house prices are going to drop? Of course I did, because current house prices are waaaay overpriced and they are going to drop. The real home value is going to rise and in about 4-5 years they are going to meet each other. After that, the home prices will go up again and inflated value will be GONE. So yeah, this is the best time to sell if you can find a buyer (but I hope you bought it cheap - meaning you bought it before the year 2000) because the value that you think is right now... its going to be gone.
As for the interest deductions mortgage... well the mortgage industries WILL hate it. PPL who build 5000+ square feet can probably save enough money to entirely pay for the house in 3-4 years without needing a mortgage company. The only reason I would go with the mortgage industry is to get the deductions and to use the other money for investments and retirement. If the deductions are taken away, I will not be getting a mortgage and saving my money to pay for the house entirely. The mortgage companies will stand to lose BILLIONS this way... and if you don't know already, Big Business makes the laws and runs the government... I am sure the bill is DOA (its just meant to scare ppl, thats what politicians like to do... they like to pretend they are heroes when they are in fact, villans).
Location: Sitting on a bar stool. Guinness in hand.
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4 years
I may rise in some places. But in about to years I think we will finally see the end to the free fall in housing. Then another year or two of flat pricing. Then in Year 3 or 4 we'll actually start seeing a rise again.
evilnewbie- as a few previous posters mentioned, real estate is all location specific... I know that the builders here in metro denver (in established neighborhoods at least) are continuing to hold very firm on price. I see many of the sellers doing the same. In fact, I see several new builds setting new standards in price per square foot on price. I find it baffling and the DOM appear to be flat from last year or increasing. I haven't seen Denver slide very far, but it didn't shoot straight up like some of the other markets, either. Regardless, some neighborhoods here are down (particularly far flung exurbs/suburbs) but city neighborhood prices are increasing or remaining pretty flat at a minimum in this market. I'm not a realtor, just an average person who really likes to stay up on real estate and comps in my area.
You are right dj32, it is very location specific. In general, it depends on how much homes increased after 2000 and in your area and as you said, if it didn't increase too much then there is little reason for Denver to worry. I am talking about areas where prices when through the roof so to speak (or writing in this case). Sellers in these areas are delusional if they think there home is really worth that much. It all depends on the real market value of the home which is not written anywhere but is up to the consumer to actually calculate it out. BUT Denver is not immune itself even though it didn't join a lot of cities in inflating their home values, it will suffer like any city from the downturn in the housing market as the nation tries to adjust (consider Denver an innocent bystander in the housing market mess - meaning Denver will lose some value but not a lot as a result of the housing market instability). What makes me mad is that everyone knew the housing market was going to burst, even the great American GOVERNMENT... and yet they cheated (that's right... they cheated!!)... they cheated the american ppl by collecting property taxes on overinflated homes. Now, not all governments did this, some actually tried to protect their residents by limiting how much property tax can increase by (because they knew property values were going to plummet)... but other state governments didn't (and they knew it) so they decide to rob you without you even knowing it. What is that old saying... "The Devil's greatest trick was to make people believe he didn't exist"... in this some of the government (I won't mention which ones) used the housing bubble to their advantage at the cost to its resident and the resident didn't even know it.
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4 years
