What are your thoughts? Housing going UP or DOWN?

[34f3f3f]

Economic reality/America Dream x Unknown = Inclined mass on flat surface with downward momentum.

[Arraya]

http://www.zerohedge.com/article/sprott-wither-green-shoots
The banking sector isn’t the only equity space that confounds us – the housing stocks are as equally absurd. Despite what you may have heard from your local real estate agent, the fundamentals for US housing are looking dismal. Ever since the tax credits have rolled off, new home sales are now running at 300,000 on a seasonally-adjusted annual rate (“SAAR”), representing a new all time low this past May. For comparison, this is down from an all time high of 1,389,000 new home sales made in July of 2004.3 Reading this, you may expect the home builder stocks to have performed poorly. But no, not in this market!

[..] from the day that Bernanke first saw his ‘green shoots’, the home builders index appreciated by 47% to June 30, 2010, peaking at 104% on April 23rd – all while new home sales were down 14% over the same time period on a SAAR basis.4 ‘The Market is Always Right’, as they say, but it simply can’t be with regard to these stocks. The housing ‘green shoots’ were the product of government initiative, rather than true fundamental improvement, and were thus short term in nature. Now that the government program has ended, the whole sector looks poised to fall apart.

[Arraya]

http://www.zerohedge.com/article/sprott-wither-green-shoots
The banking sector isn’t the only equity space that confounds us – the housing stocks are as equally absurd. Despite what you may have heard from your local real estate agent, the fundamentals for US housing are looking dismal. Ever since the tax credits have rolled off, new home sales are now running at 300,000 on a seasonally-adjusted annual rate (“SAAR”), representing a new all time low this past May. For comparison, this is down from an all time high of 1,389,000 new home sales made in July of 2004.3 Reading this, you may expect the home builder stocks to have performed poorly. But no, not in this market!

[..] from the day that Bernanke first saw his ‘green shoots’, the home builders index appreciated by 47% to June 30, 2010, peaking at 104% on April 23rd – all while new home sales were down 14% over the same time period on a SAAR basis.4 ‘The Market is Always Right’, as they say, but it simply can’t be with regard to these stocks. The housing ‘green shoots’ were the product of government initiative, rather than true fundamental improvement, and were thus short term in nature. Now that the government program has ended, the whole sector looks poised to fall apart.

[Arraya]

http://www.zerohedge.com/article/sprott-wither-green-shoots
The banking sector isn’t the only equity space that confounds us – the housing stocks are as equally absurd. Despite what you may have heard from your local real estate agent, the fundamentals for US housing are looking dismal. Ever since the tax credits have rolled off, new home sales are now running at 300,000 on a seasonally-adjusted annual rate (“SAAR”), representing a new all time low this past May. For comparison, this is down from an all time high of 1,389,000 new home sales made in July of 2004.3 Reading this, you may expect the home builder stocks to have performed poorly. But no, not in this market!

[..] from the day that Bernanke first saw his ‘green shoots’, the home builders index appreciated by 47% to June 30, 2010, peaking at 104% on April 23rd – all while new home sales were down 14% over the same time period on a SAAR basis.4 ‘The Market is Always Right’, as they say, but it simply can’t be with regard to these stocks. The housing ‘green shoots’ were the product of government initiative, rather than true fundamental improvement, and were thus short term in nature. Now that the government program has ended, the whole sector looks poised to fall apart.

[Arraya]

http://www.zerohedge.com/article/sprott-wither-green-shoots
The banking sector isn’t the only equity space that confounds us – the housing stocks are as equally absurd. Despite what you may have heard from your local real estate agent, the fundamentals for US housing are looking dismal. Ever since the tax credits have rolled off, new home sales are now running at 300,000 on a seasonally-adjusted annual rate (“SAAR”), representing a new all time low this past May. For comparison, this is down from an all time high of 1,389,000 new home sales made in July of 2004.3 Reading this, you may expect the home builder stocks to have performed poorly. But no, not in this market!

[..] from the day that Bernanke first saw his ‘green shoots’, the home builders index appreciated by 47% to June 30, 2010, peaking at 104% on April 23rd – all while new home sales were down 14% over the same time period on a SAAR basis.4 ‘The Market is Always Right’, as they say, but it simply can’t be with regard to these stocks. The housing ‘green shoots’ were the product of government initiative, rather than true fundamental improvement, and were thus short term in nature. Now that the government program has ended, the whole sector looks poised to fall apart.

[Arraya]

http://www.zerohedge.com/article/sprott-wither-green-shoots
The banking sector isn’t the only equity space that confounds us – the housing stocks are as equally absurd. Despite what you may have heard from your local real estate agent, the fundamentals for US housing are looking dismal. Ever since the tax credits have rolled off, new home sales are now running at 300,000 on a seasonally-adjusted annual rate (“SAAR”), representing a new all time low this past May. For comparison, this is down from an all time high of 1,389,000 new home sales made in July of 2004.3 Reading this, you may expect the home builder stocks to have performed poorly. But no, not in this market!

[..] from the day that Bernanke first saw his ‘green shoots’, the home builders index appreciated by 47% to June 30, 2010, peaking at 104% on April 23rd – all while new home sales were down 14% over the same time period on a SAAR basis.4 ‘The Market is Always Right’, as they say, but it simply can’t be with regard to these stocks. The housing ‘green shoots’ were the product of government initiative, rather than true fundamental improvement, and were thus short term in nature. Now that the government program has ended, the whole sector looks poised to fall apart.

[sdrealtor]

[quote=CA renter][quote=sdrealtor]BG
Again I never claimed it would save the mid to upper housing market. It is all additive and no one can deny that it will have an impact. How much we dont know. I said they “only children” and admitted not everyone is an only child. I also said that my examples are skewed to the upper mid/high end as that is where and who I meet socially. I also said that people whose parent live in lower priced ZIP are likely to buy lower priced homes. I dont get what points you are contesting as I already pointed out all the possibilities yopu mentioned.

My biggest issue is the most bearish pick apart each example as not being capable of solving our problems but dont make an allowance for all of the examples being additive on a collective. Every little but helps and there are lots of little bits coming from different directions. We dotn need one thing to solve the ills of our economic downturns we need lots of things coming together. I try to point out each brick in the wall as I come upon them.[/quote]

sdr,

Inheritance is certainly one possible way for people to obtain enough money to prop up housing prices…however, I’d guess that a lot of that “Greatest Generation” money is tied up in housing. In order for the kids to get to the money, they have to sell a house, and if they’re going to be getting ~$1MM+, chances are the houses they sell will be in “desirable” neighborhoods. Essentially, while they might be willing to buy an expensive house with their new-found cash, they will most likely have to sell another one in order to do it, which means that it’s really not a net gain in demand.[/quote]

Only if they want to stay in the same area in which case they probably keep the house. The examples I see are for parents homes far away from where the buyers currently are living.

[sdrealtor]

[quote=CA renter][quote=sdrealtor]BG
Again I never claimed it would save the mid to upper housing market. It is all additive and no one can deny that it will have an impact. How much we dont know. I said they “only children” and admitted not everyone is an only child. I also said that my examples are skewed to the upper mid/high end as that is where and who I meet socially. I also said that people whose parent live in lower priced ZIP are likely to buy lower priced homes. I dont get what points you are contesting as I already pointed out all the possibilities yopu mentioned.

My biggest issue is the most bearish pick apart each example as not being capable of solving our problems but dont make an allowance for all of the examples being additive on a collective. Every little but helps and there are lots of little bits coming from different directions. We dotn need one thing to solve the ills of our economic downturns we need lots of things coming together. I try to point out each brick in the wall as I come upon them.[/quote]

sdr,

Inheritance is certainly one possible way for people to obtain enough money to prop up housing prices…however, I’d guess that a lot of that “Greatest Generation” money is tied up in housing. In order for the kids to get to the money, they have to sell a house, and if they’re going to be getting ~$1MM+, chances are the houses they sell will be in “desirable” neighborhoods. Essentially, while they might be willing to buy an expensive house with their new-found cash, they will most likely have to sell another one in order to do it, which means that it’s really not a net gain in demand.[/quote]

Only if they want to stay in the same area in which case they probably keep the house. The examples I see are for parents homes far away from where the buyers currently are living.

[sdrealtor]

[quote=CA renter][quote=sdrealtor]BG
Again I never claimed it would save the mid to upper housing market. It is all additive and no one can deny that it will have an impact. How much we dont know. I said they “only children” and admitted not everyone is an only child. I also said that my examples are skewed to the upper mid/high end as that is where and who I meet socially. I also said that people whose parent live in lower priced ZIP are likely to buy lower priced homes. I dont get what points you are contesting as I already pointed out all the possibilities yopu mentioned.

My biggest issue is the most bearish pick apart each example as not being capable of solving our problems but dont make an allowance for all of the examples being additive on a collective. Every little but helps and there are lots of little bits coming from different directions. We dotn need one thing to solve the ills of our economic downturns we need lots of things coming together. I try to point out each brick in the wall as I come upon them.[/quote]

sdr,

Inheritance is certainly one possible way for people to obtain enough money to prop up housing prices…however, I’d guess that a lot of that “Greatest Generation” money is tied up in housing. In order for the kids to get to the money, they have to sell a house, and if they’re going to be getting ~$1MM+, chances are the houses they sell will be in “desirable” neighborhoods. Essentially, while they might be willing to buy an expensive house with their new-found cash, they will most likely have to sell another one in order to do it, which means that it’s really not a net gain in demand.[/quote]

Only if they want to stay in the same area in which case they probably keep the house. The examples I see are for parents homes far away from where the buyers currently are living.

[sdrealtor]

[quote=CA renter][quote=sdrealtor]BG
Again I never claimed it would save the mid to upper housing market. It is all additive and no one can deny that it will have an impact. How much we dont know. I said they “only children” and admitted not everyone is an only child. I also said that my examples are skewed to the upper mid/high end as that is where and who I meet socially. I also said that people whose parent live in lower priced ZIP are likely to buy lower priced homes. I dont get what points you are contesting as I already pointed out all the possibilities yopu mentioned.

My biggest issue is the most bearish pick apart each example as not being capable of solving our problems but dont make an allowance for all of the examples being additive on a collective. Every little but helps and there are lots of little bits coming from different directions. We dotn need one thing to solve the ills of our economic downturns we need lots of things coming together. I try to point out each brick in the wall as I come upon them.[/quote]

sdr,

Inheritance is certainly one possible way for people to obtain enough money to prop up housing prices…however, I’d guess that a lot of that “Greatest Generation” money is tied up in housing. In order for the kids to get to the money, they have to sell a house, and if they’re going to be getting ~$1MM+, chances are the houses they sell will be in “desirable” neighborhoods. Essentially, while they might be willing to buy an expensive house with their new-found cash, they will most likely have to sell another one in order to do it, which means that it’s really not a net gain in demand.[/quote]

Only if they want to stay in the same area in which case they probably keep the house. The examples I see are for parents homes far away from where the buyers currently are living.

[sdrealtor]

[quote=CA renter][quote=sdrealtor]BG
Again I never claimed it would save the mid to upper housing market. It is all additive and no one can deny that it will have an impact. How much we dont know. I said they “only children” and admitted not everyone is an only child. I also said that my examples are skewed to the upper mid/high end as that is where and who I meet socially. I also said that people whose parent live in lower priced ZIP are likely to buy lower priced homes. I dont get what points you are contesting as I already pointed out all the possibilities yopu mentioned.

My biggest issue is the most bearish pick apart each example as not being capable of solving our problems but dont make an allowance for all of the examples being additive on a collective. Every little but helps and there are lots of little bits coming from different directions. We dotn need one thing to solve the ills of our economic downturns we need lots of things coming together. I try to point out each brick in the wall as I come upon them.[/quote]

sdr,

Inheritance is certainly one possible way for people to obtain enough money to prop up housing prices…however, I’d guess that a lot of that “Greatest Generation” money is tied up in housing. In order for the kids to get to the money, they have to sell a house, and if they’re going to be getting ~$1MM+, chances are the houses they sell will be in “desirable” neighborhoods. Essentially, while they might be willing to buy an expensive house with their new-found cash, they will most likely have to sell another one in order to do it, which means that it’s really not a net gain in demand.[/quote]

Only if they want to stay in the same area in which case they probably keep the house. The examples I see are for parents homes far away from where the buyers currently are living.

[UCGal]

[quote=bearishgurl]Many of our “greatest-generation” and “depression-era” parents had their retirement funds tied up in 401K or 403(b)-type vehicles and died too young or without sufficient notice to move it all out of there while they were alive, well and eligible. Therefore, if their baby-boomer children inherit these funds and are under age 59-1/2, the funds can only be moved over to the heirs’ SSN WITHOUT WITHDRAWALS until they are age-eligible, unless they are willing to pay a 20% penalty for early withdrawal.
[/quote]
I apologize for the hijack but I need to correct this.

If the parent had started collecting on their 401k/IRA funds then the child does NOT have to cash out and there is NO 20% penalty. I know this from first hand experience. As mentioned previously, my parents have both passed and I inherited a small amount from them. The bulk was in IRA/401k money.

The adult child beneficiary has a “required minimum distribution” (RMD) that is based on the CHILD’s age and must withdraw that amount each year. They pay NORMAL income tax on it, no penalty. They CAN withdraw the entire amount – but that would mean they have to pay taxes on the entire amount (typically a higher rate than just adding the RMD to other sources of income) and they’d lose the tax deferred status of any money withdrawn.

The 20% penalty is NOT there for inherited tax deferred retirement funds. It is like an IRA that you can withdraw and pay normal income taxes – just doing it before you are 59.5.

If the beneficiary is the wife of the deceased the rules are a bit different. I only did the research on the adult child beneficiary case since that’s the one that applied to me.

Too many people cash out inherited IRAs without considering the tax advantage of keeping it tax deferred.

Google “inherited IRA” and you’ll find the details, calculators for determining the RMD each year, etc.

I hope this info helps someone avoid costly misunderstandings.
End hijack.

[UCGal]

[quote=bearishgurl]Many of our “greatest-generation” and “depression-era” parents had their retirement funds tied up in 401K or 403(b)-type vehicles and died too young or without sufficient notice to move it all out of there while they were alive, well and eligible. Therefore, if their baby-boomer children inherit these funds and are under age 59-1/2, the funds can only be moved over to the heirs’ SSN WITHOUT WITHDRAWALS until they are age-eligible, unless they are willing to pay a 20% penalty for early withdrawal.
[/quote]
I apologize for the hijack but I need to correct this.

If the parent had started collecting on their 401k/IRA funds then the child does NOT have to cash out and there is NO 20% penalty. I know this from first hand experience. As mentioned previously, my parents have both passed and I inherited a small amount from them. The bulk was in IRA/401k money.

The adult child beneficiary has a “required minimum distribution” (RMD) that is based on the CHILD’s age and must withdraw that amount each year. They pay NORMAL income tax on it, no penalty. They CAN withdraw the entire amount – but that would mean they have to pay taxes on the entire amount (typically a higher rate than just adding the RMD to other sources of income) and they’d lose the tax deferred status of any money withdrawn.

The 20% penalty is NOT there for inherited tax deferred retirement funds. It is like an IRA that you can withdraw and pay normal income taxes – just doing it before you are 59.5.

If the beneficiary is the wife of the deceased the rules are a bit different. I only did the research on the adult child beneficiary case since that’s the one that applied to me.

Too many people cash out inherited IRAs without considering the tax advantage of keeping it tax deferred.

Google “inherited IRA” and you’ll find the details, calculators for determining the RMD each year, etc.

I hope this info helps someone avoid costly misunderstandings.
End hijack.

[UCGal]

[quote=bearishgurl]Many of our “greatest-generation” and “depression-era” parents had their retirement funds tied up in 401K or 403(b)-type vehicles and died too young or without sufficient notice to move it all out of there while they were alive, well and eligible. Therefore, if their baby-boomer children inherit these funds and are under age 59-1/2, the funds can only be moved over to the heirs’ SSN WITHOUT WITHDRAWALS until they are age-eligible, unless they are willing to pay a 20% penalty for early withdrawal.
[/quote]
I apologize for the hijack but I need to correct this.

If the parent had started collecting on their 401k/IRA funds then the child does NOT have to cash out and there is NO 20% penalty. I know this from first hand experience. As mentioned previously, my parents have both passed and I inherited a small amount from them. The bulk was in IRA/401k money.

The adult child beneficiary has a “required minimum distribution” (RMD) that is based on the CHILD’s age and must withdraw that amount each year. They pay NORMAL income tax on it, no penalty. They CAN withdraw the entire amount – but that would mean they have to pay taxes on the entire amount (typically a higher rate than just adding the RMD to other sources of income) and they’d lose the tax deferred status of any money withdrawn.

The 20% penalty is NOT there for inherited tax deferred retirement funds. It is like an IRA that you can withdraw and pay normal income taxes – just doing it before you are 59.5.

If the beneficiary is the wife of the deceased the rules are a bit different. I only did the research on the adult child beneficiary case since that’s the one that applied to me.

Too many people cash out inherited IRAs without considering the tax advantage of keeping it tax deferred.

Google “inherited IRA” and you’ll find the details, calculators for determining the RMD each year, etc.

I hope this info helps someone avoid costly misunderstandings.
End hijack.

[UCGal]

[quote=bearishgurl]Many of our “greatest-generation” and “depression-era” parents had their retirement funds tied up in 401K or 403(b)-type vehicles and died too young or without sufficient notice to move it all out of there while they were alive, well and eligible. Therefore, if their baby-boomer children inherit these funds and are under age 59-1/2, the funds can only be moved over to the heirs’ SSN WITHOUT WITHDRAWALS until they are age-eligible, unless they are willing to pay a 20% penalty for early withdrawal.
[/quote]
I apologize for the hijack but I need to correct this.

If the parent had started collecting on their 401k/IRA funds then the child does NOT have to cash out and there is NO 20% penalty. I know this from first hand experience. As mentioned previously, my parents have both passed and I inherited a small amount from them. The bulk was in IRA/401k money.

The adult child beneficiary has a “required minimum distribution” (RMD) that is based on the CHILD’s age and must withdraw that amount each year. They pay NORMAL income tax on it, no penalty. They CAN withdraw the entire amount – but that would mean they have to pay taxes on the entire amount (typically a higher rate than just adding the RMD to other sources of income) and they’d lose the tax deferred status of any money withdrawn.

The 20% penalty is NOT there for inherited tax deferred retirement funds. It is like an IRA that you can withdraw and pay normal income taxes – just doing it before you are 59.5.

If the beneficiary is the wife of the deceased the rules are a bit different. I only did the research on the adult child beneficiary case since that’s the one that applied to me.

Too many people cash out inherited IRAs without considering the tax advantage of keeping it tax deferred.

Google “inherited IRA” and you’ll find the details, calculators for determining the RMD each year, etc.

I hope this info helps someone avoid costly misunderstandings.
End hijack.

[Author]

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