Update To the Update ‘Will The Bubble
Pop?’
-7/15/09-
It’s
been a year-and-a-half since the last update and maybe it’s time for
another. The capital gains rules,
described in detail in the first paper, Will
The Bubble Pop?, still apply, making real estate a much better, long term
investment than before July 1, 1997.
At the end
of January this year,
As
mentioned our first original article, our banks are extremely conservative and
don’t usually get caught up in trends like the bundling of mortgage backed
securities and the subprime loan mess.
At an office meeting, none of us had done or even heard of any local
no-income, no-documentation loans.
Prices
seem to have bottomed out. Some of this
may be because, as mentioned, there aren’t waves in ingress and egress by large
business ventures.
A super
hot segment seems to be the first home market where buyers are scurrying to
take advantage of the up-to $8,000 tax incentive offered through the federal
government. See http://www.irs.gov/newsroom/article/0,,id=204671,00.html
for a description. To apply, one must
purchase before December 1, 2009 so it only makes sense this market is hot.
That
said we’re moving properties in all price ranges and a number of businesses,
too.
And
like the last update three factors still exist.
There are more properties on the market for buyer choice. Sellers are willing to negotiate. And interest rates are still historically
very low. Some economists worry about
inflation but if someone locks into a fixed rate mortgage,
that can work to their advantage.
IRS and
tax laws continue to evolve so working with a tax consultant, accountant,
lawyer or financial planner becomes necessary particularly when buying and
selling.
Please
don’t hesitate to call or email us with questions about