tax reform act of 1986: Where Have All The Buyers Gone? - 04/02/09 07:29 AM
The NAR recently published their annual report on home buyers which are broken into three categories, primary, vacation, and investment.
The report revealed declines in all three categories when compared to 2007, no surprise there.  Interestingly though it is the percentage declines in the types of home buyers that reveal why home sales were so sluggish in 2008.
Specifically, vacation home sales were down 30.8% in 2008, investment-home sales were down 17.2%, and primary residence sales declined the least at 13.2%.  In other words, the biggest percentage decline in home sales in 2008 was due in large part to the second home (vacation and investment) market.  Admittedly, it is worth … (5 comments)

tax reform act of 1986: CNBC's Diana Olick on Real Estate Investors - 02/19/09 04:40 AM
I have written before about the difference between real estate investors and speculators.  But every now and then it is nice to have your opinion vindicated by somebody else.  In this case it is CNBC's Diana Olick when she made a recent blog post about real estate investors.  The title was, "Not all real estate investors are irresponsible".  It was written in response to President Obama's speech yesterday when he said about his housing program, "It will not help speculators who took risky bets on a rising market and bought homes not to live in but to sell."
First of all, to set … (4 comments)

tax reform act of 1986: Fannie Mae expands investment loan portfolio - 02/10/09 05:21 AM
I have to thank Fred Glick for sharingthe latest information about Fannie Mae expanding its loan portfolio to allow for up to ten financed properties for individual borrowers.
This new policy is a change in course for Fannie Mae that had been limiting the maximum number of financed properties to four.  This expansion of Fannie's lending guidelines will be effective on March 1st, of 2009.
The reason why this is significant, is that there simply are not enough first time home buyers that are available to absorb the excess supply of homes for sale, regardless of a first time home buyer or primary … (1 comments)

tax reform act of 1986: So much for an Obama housing stimulus plan - 01/15/09 03:47 AM
As the real estate market sinks further into a depression and continues to drag the broader economy, financial system, and credit markets down with it, you would think that a housing stimulus plan that would attempt to bring stability to home values would be the cornerstone if not at least a significant component of any worthwhile economic stimulus plan, but it's not going to be.
According to a Bloomberg.com article by Ryan J. Donmoyer and Brian Faler, President-elect Obama's only housing provision in his stimulus plan is to remove the repayment requirement of the $7,500 tax credit for first-time homebuyers that … (9 comments)

tax reform act of 1986: Three reasons why the real estate market is worse than the NAR numbers reveal - 01/15/09 02:42 AM
Nothing gives you a better sense of the health of the real estate market than the relationship between the supply and demand for real estate, in other words the number of properties for sale (supply) relative to the number of properties sold (demand).  This relationship is referred to as the month's supply of housing.  Currently, as of November, according to the NAR, the month's supply of housing is at an all time high at 11.2, matching April of 2008.  
The month's supply of housing is like golf, the lower the number the better.  As recently as 2005 there was a … (5 comments)

tax reform act of 1986: The Tax Reform Act of 1986 and Investment Real Estate - 12/29/08 08:10 AM
In 1986 Congress passed a tax reform act (TRA 1986) whichin addition to simplifying the tax code, also eliminated and restricted the tax benefits associated with investment real estate.
The tax reform did three things:
1.)  It limited the adjusted gross income to $100,000 for those individuals that invested in real estate and wanted to be able to depreciate the property and receive a tax deduction for doing so.  The deductions were phased out and pro rated for those with an AGI between 100-150K.  And for those with an AGI of greater than 150K, the losses were carried forward, indefinitely.  Prior to 1986, any American was able to benefit … (2 comments)

tax reform act of 1986: Things that were cool in the 80s, look completely ridiculous now... - 11/13/08 06:13 AM
Things that seemed like a great idea in the 1980s, things like tight pants, big hair, the Michael Jackson thriller Jacket, the Rubik's Cube, and the Tax Reform Act of 1986, look completely ridiculous during a real estate depression in 2008.

OK, I'll make one exception, the Rubik's Cube is still pretty cool.  In fact I think I will put that on my Christmas list for one of my kids to get me - it beats getting underwear or socks.
But the rest of these ideas look completely out of touch, including the Tax Reform Act (TRA) of 1986.
Prior to … (4 comments)

 
Mark MacKenzie

Mark MacKenzie

Phoenix, AZ

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