New Housing Bill - Closing Tax Loophole for Second Homes
The U.S. government bailout of the housing market continues, but in their effort to protect homeowners and bailout the big banks, they have apparently closed a loophole some wealthy homeowners used to save on capital gains taxes. Of course the irony in this is very few people these days have much for capital gains anyway on their 2nd homes if they purchased it within the past 5 years, but nonetheless, the Feds have shut down this tax loophole.
Please see this posting from Calculated Risk for the information.
Given that this bill was written in government speak, you’ll want to contact your tax adviser or tax attorney for a qualified interpretation of the new law.
June New Home Sales - Census Bureau
Calculated Risk has done an excellent job on the June New Homes Sales data that was released last week. New construction remains down significantly and the inventory of unsold new homes is dropping rapidly. That’s the good news. The bad news is there is still a 10 month supply of spec homes.
Twin Cities Real Estate - Market Activity Report for Week of July 21, 2008
Listing inventory continues to decline. We are now down 4.7% compared to last year. It’s important that the inventory picture start to improve before the market bottoms.
Pending sales activity is continuing to show a slightly positive trend, and certainly a much improved picture compared to what it looked like six months ago. Pending sales are up 1.8% for this week compared to the same week a year ago.
Click here for the full weekly market update from the Minneapolis Area Association of Realtors.
8.2% Chance Twin Cities Housing Prices Will Be Lower in 2 Years
On July 1, 2008, PMI Mortgage Insurance Company released it’s Summer 2008 U.S. Market Risk Index (SM). This index ranks the 50 largest metopolitan areas “according to the likelihood that home prices will be lower in two years.”
According to this report, the Twin Cities actually appears to be in pretty good shape. They only give the area an 8.2% chance that home prices will be lower two years from now.
There are areas across the country where this report says there is less than a one percent chance home prices will be lower two years from now. Those cities are:
- Milwaukee-Waukesha-West Allis, Wis.
- Cleveland-Elyria-Mentor, Ohio
- Austin-Round Rock, Texas
- Denver-Aurora, Colo.
- Charlotte-Gastonia-Concord, N.C.-S.C.
- Kansas City,Mo.-Kan.
- Columbus, Ohio
- Cincinnati-Middletown, Ohio-Ky.-Ind.
- Indianapolis-Carmel, Ind.
- San Antonio, Texas
- Houston-Sugar Land-Baytown, Texas
- Pittsburgh, Pa.
- Dallas-Plano-Irving, Texas
- Fort Worth-Arlington, Texas
It’s my belief that in the Twin Cities, we have seen the steepest part of the home price declines in the past 6-8 months. It has been very rapid and painful in some parts of the Twin Cities. Prices are likely to continue to decline, but not at the velocity we’ve seen since late 2007.
The full 8 page report is accessible for downloading here.