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BChip

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Reply with quote  #1 
https://www.bloomberg.com/news/articles/2018-01-22/housing-bears-hibernate-as-u-s-homebuilders-swagger-into-2018
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Meatloaf

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Dude has a wierd voice.  Its one of those things where you can hear him fine but its difficult to understand what he is actually saying.

That being said, I am not convinced we are in a bubble currently.  People are buying for personal use, not for speculation.  When we start seeing people buy to re-sale in 2 months for a profit then its a bubble.

I personally think what we are seeing right now is a market correction due to a better economy and the reason it "appears" as if there is a bubble forming is that real estate especially residential is crawling out of a huge hole from the crash.  If you look at where we are now and where we were prior to the last bubble and drew a line it would look like a very marginal and organic increase with inflation.  But since it took such a huge hit values dropped significantly and now they are correcting to where they should be.

I think it has to do with two driving factors.  The economy surged under Obama when the price of gas dropped to below $2 a gallon.  Then the day that Trump was elected that solidified the confidence in many people that it was OK to spend again.

Supply is LOW....Its not that demand is so great its that there isn't any homes on the market for sale which is why new construction is heavy right now and people are paying a premium for a NEW house.  The premium isn't because its NEW its because there are no other options available.

I would sell my house and enjoy a huge profit... But in order to buy something else I would be forced to pay top dollar thereby negating any profit I might make.  So why bother??? Thats the sentiment of many people hence the low inventory.



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treskirkland

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Reply with quote  #3 
I'm not convinced that we are in a bubble either.  I could see the increase in values slow or stagnate as rates rise.  But, like Jody said there is very little inventory.  I think that is the key difference from 2007.  We had tons of inventory on the market, builders had tons of new spec homes on the market. Not too mention all of the bad loans that had been made in the years prior.  It was a perfect storm.  Yes, values have had a huge increase over the last several years, but a lot of that increase is just a market correction from how far values had dropped.  
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I am seeing people buy houses they can't afford though.  Remember the school teachers who bought the $300K houses with a new suburban in the garage and pictures of family vacations all over the house.... Yep, I am seeing that again.  Except this time they are $425K houses and that new tahoe is 75K.



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treskirkland

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Quote:
Originally Posted by Meatloaf
I am seeing people buy houses they can't afford though.  Remember the school teachers who bought the $300K houses with a new suburban in the garage and pictures of family vacations all over the house.... Yep, I am seeing that again.  Except this time they are $425K houses and that new tahoe is 75K.




Yes, and they have started to relax the loan requirements again.  But, I think it is a smaller percentage than before.  But, it doesn't seem to be like before when virtually every new home in a subdivision was purchased with a Nehemiah loan.   I guess only time will tell....

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Meatloaf

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Also, remember when the government was giving $8000 to first time home buyers?  I forget what that program was called, but it was a free $8000.



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Bobby

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Reply with quote  #7 
Quote:
Originally Posted by Meatloaf
Also, remember when the government was giving $8000 to first time home buyers?  I forget what that program was called, but it was a free $8000.



"Free" my ass!!!  You and I are paying for that!
Guess how much "free" money I got when I bought my first house...

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keith

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This should be a temporary situation and not a bubble. Home prices rebounded but outpaced incomes. As we begin to see strong increases in income, business growth, etc., the housing market will pick back up. With rental amounts well above house payments, the market will benefit from peoples increasing income and increasing credit scores. The bubble will not occur for another 6 years when the Dems take back congress and stifle the economy.
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Bobby

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Quote:
Originally Posted by keith
This should be a temporary situation and not a bubble. Home prices rebounded but outpaced incomes. As we begin to see strong increases in income, business growth, etc., the housing market will pick back up. With rental amounts well above house payments, the market will benefit from peoples increasing income and increasing credit scores. The bubble will not occur for another 6 years when the Dims take back congress and stifle the economy.

Fixed it for ya.
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RubberStamp

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Reply with quote  #10 
An interesting thing to consider:  In Europe where they are taxed to death..  at least in Germany where I have family..  they dump EVERYTHING into their real estate because there is no where else they can protect their money.  Even a savings account eats at the principle.  You also hear about this in China and other socialized countries.   We saw that a little bit over the past 8 years.    People hunkered down and just improved the homes they had. 

I'm unsure what that would do to prices and values.  Less movement.  But improvements up.   Just something to think about when Bernie goes to war with the working class..  many will rush to real estate as a safe haven.

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Meatloaf

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I also read today that 1 in 6 millenials have over 100K socked away.  I have a hard time believing that, but maybe its true.  If it is, then in the coming years we will see home buyers with bigger cash and more interest in the real value of their assets.
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MEP

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Yea, how many of them are living with a family member? Parents paying for everything until they are 25...That is worth a couple of grand a month.

I was in Sam's Saturday and overheard the parents of a child that lives at home discussing the price of K-cups...son wanted the best...my reply, why not you are the one writing the check...round and round it goes.

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Bobby

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Didn't POTUS just eliminate the estate tax here.  Being from a poor-mid class family, I'm not completely sure what that means...

http://www.washingtonexaminer.com/trump-and-the-gop-take-a-crucial-bite-out-of-the-death-tax/article/2644058

" The new law reduces the death tax's tax base by 64 percent, according to JCT numbers. For perspective, in 2000, 52,000 estates were forced to pay the death tax. Bottom line: Next year, the estate tax will be the least burdensome it has been in its 101-year history, with the exception of 2010, when the tax was temporarily repealed."

"Many businesses like family-owned distributors with multiple warehouses across a region are in competition with larger corporations — and there is no corporate equivalent for 40 percent tax at the passing of each generation. As long as the death tax remains on the books, it will continue to contribute to foreign buyouts and consolidation, ironically leading to more concentration of wealth among large multinational corporations, which is the exact opposite of the death tax's intended purpose."


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Meatloaf

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Reply with quote  #14 
I think the death tax and estate tax is there to prevent an american monarchy.

Imagine if Bill and Melinda were not so generous.... They could control all of America and their heirs would have so much power they couldn't be controlled.

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RubberStamp

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Quote:
Originally Posted by Meatloaf
I think the death tax and estate tax is there to prevent an american monarchy.

Imagine if Bill and Melinda were not so generous.... They could control all of America and their heirs would have so much power they couldn't be controlled.


Yes..  but there was a dark side.  When a family farm owner would pass.. the children didn't even have a shot at keeping the farm because they had to sell it to pay the taxes.  Real estate is expensive when you are talking thousands of acres but these people lived blue collar lives.  

Did you ever see the movie Secritariat?  Apparently this has been going on for half a century because the kids wanted to sell that farm and the horses (including big red) except the executor made a gamble that paid off.

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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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Meatloaf

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Quote:
Originally Posted by RubberStamp


Yes..  but there was a dark side.  When a family farm owner would pass.. the children didn't even have a shot at keeping the farm because they had to sell it to pay the taxes.  Real estate is expensive when you are talking thousands of acres but these people lived blue collar lives.  

Did you ever see the movie Secritariat?  Apparently this has been going on for half a century because the kids wanted to sell that farm and the horses (including big red) except the executor made a gamble that paid off.


While I don't doubt that many people have been adversely affected by the tax, just think... That large family farm gives that family A LOT of power in thier so called "blue collar life".

I am not one for increased taxation, but I do see a very beneficial aspect of this.  I just think that the threshold should be increased significantly.

Right now it is around 5 million.  while that is a lot of money, it isn't so much money that  it would allow someone to have significant power over a population.  Now 25 million might.

Money is meant to be earned and spent and saved for a rainy day.  When someone earns enough to accumulate massive amounts of wealth say 100 Million... That ain't rainy day money, that is solely used for power plays.

Look at it this way.  Trump isn't the best person for president....He is likely one of the worst possible people for president.  What got him into the office?  His money.  Now, I personally think Trump is an altruist and took the opportunity to be president for the better good of the country, but it is his massive wealth accumulation that got him there.

Now on the other hand, Imagine the amount of power and money Trump's great grand children would have if he chose to simply keep doing what he has been doing...  His great grand children would have all this money and power and no sense of where it came from or why they have it.  They COULD use it to control things in their favor to accumulate even more wealth.

I do like the estate tax/death tax but I do think the threshold should only affect those with massive fortunes.  In other words, if you have the ability to generate billions then you should spend it and hang onto a rainy day fund.  The only way capitalism works is by spending money, not hoarding it.

I have several friends worth well over 100Mil that still work to make more, more, more for the political power it gives them, not because they need it.  Most of them live blue collar life styles.  These are good folks... but their children and grand children scare the hell out of me.

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RubberStamp

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Reply with quote  #17 
Should be some kind of farm/business continuation exemption.  But the problem is if you create a loophole it will be exploited by those who have the money to figure it out.
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We argue this: Meanwhile the agent's assistant just did 5 unofficial appraisal inspections they paired with a Zestimate and granted 90% LTV - all guaranteed no buy back.
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Meatloaf

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Reply with quote  #18 
Quote:
Originally Posted by RubberStamp
Should be some kind of farm/business continuation exemption.  But the problem is if you create a loophole it will be exploited by those who have the money to figure it out.


Corporations never die.

You can give your stock to someone - Gift Tax

You can sell your stock - gains tax

You can die with your stock - death tax

I am sure there is a loophole somewhere.

But think about all the people who stand to inherit smaller amounts.  Lets say you inherit a house worth 250K that grandma only paid 25K for.... There is no tax because the basis is re-set when you inherit it.  You are only taxed on any profit you might make that is over the new tax basis.

The government has to run on something.  You can't tax the poor if the rich hoard all the money.

Soooo for all those "poor" people who inherit less than $5Mil... The Gov't doesn't get ANYTHING.  You have to get the tax money from somewhere, you can't just expect Mexico to build our walls.



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