[Nancy_s soothsayer]

I know two households in San Diego who HELOC’ed their primary homes in order to buy second homes, again in San Diego, in 2004-2005. They were totally convinced the gamble would pay off big time returns. There would be three scenarios I can think of:

1. Lets say if they and many others moved to the newly bought homes in 2006 and rented off the older homes for three years until 2009, they would still qualify under the 2-out-of-five years of free capital gains tax on the older house. They would look at selling the older house in 2009, conservatively, because longer term payments on two depreciating houses would cause a lot of economic damage to their net worth. Therefore, listing inventory would be high in 2009. That’s good for buyers looking to buy in 2009.

2. If they and many others decide to give up the newer house after living in it for two years (2006 and 2007) and move back to original house, they could try and rent out the newer house for three more years till 2010 and still qualify under the same tax-free law. But they must sell the newer house in 2010, adding to 2010 inventory.

3. Here’s what I like – after they finally come to realize any moment now that the multi-home gamble is a total loss, even if they wait another five years, they go back to the original house and sell the pricier, newer house this year or next. Second half of 2008 listing inventory and next year’s will be high.

I say, like in my past predictions, that after October 2009, many of these San Diego multi-home fools would have made up their minds already. Listing inventory will be high any way you slice it.

[Nancy_s soothsayer]

I know two households in San Diego who HELOC’ed their primary homes in order to buy second homes, again in San Diego, in 2004-2005. They were totally convinced the gamble would pay off big time returns. There would be three scenarios I can think of:

1. Lets say if they and many others moved to the newly bought homes in 2006 and rented off the older homes for three years until 2009, they would still qualify under the 2-out-of-five years of free capital gains tax on the older house. They would look at selling the older house in 2009, conservatively, because longer term payments on two depreciating houses would cause a lot of economic damage to their net worth. Therefore, listing inventory would be high in 2009. That’s good for buyers looking to buy in 2009.

2. If they and many others decide to give up the newer house after living in it for two years (2006 and 2007) and move back to original house, they could try and rent out the newer house for three more years till 2010 and still qualify under the same tax-free law. But they must sell the newer house in 2010, adding to 2010 inventory.

3. Here’s what I like – after they finally come to realize any moment now that the multi-home gamble is a total loss, even if they wait another five years, they go back to the original house and sell the pricier, newer house this year or next. Second half of 2008 listing inventory and next year’s will be high.

I say, like in my past predictions, that after October 2009, many of these San Diego multi-home fools would have made up their minds already. Listing inventory will be high any way you slice it.

[Nancy_s soothsayer]

Similar houses like that in my new neighborhood here in Austin, Texas, came with price tags below $200 thousand when I moved in 2006. But in La-la land of California, the price you are paying seems reasonable enough: 40% off from the peak of 2005. Congratulations for finding the house you like. I say go for it. I only pray for you that you have a very secure job to pay for it for a long time.

[Nancy_s soothsayer]

Similar houses like that in my new neighborhood here in Austin, Texas, came with price tags below $200 thousand when I moved in 2006. But in La-la land of California, the price you are paying seems reasonable enough: 40% off from the peak of 2005. Congratulations for finding the house you like. I say go for it. I only pray for you that you have a very secure job to pay for it for a long time.

[Nancy_s soothsayer]

Similar houses like that in my new neighborhood here in Austin, Texas, came with price tags below $200 thousand when I moved in 2006. But in La-la land of California, the price you are paying seems reasonable enough: 40% off from the peak of 2005. Congratulations for finding the house you like. I say go for it. I only pray for you that you have a very secure job to pay for it for a long time.

[Nancy_s soothsayer]

Similar houses like that in my new neighborhood here in Austin, Texas, came with price tags below $200 thousand when I moved in 2006. But in La-la land of California, the price you are paying seems reasonable enough: 40% off from the peak of 2005. Congratulations for finding the house you like. I say go for it. I only pray for you that you have a very secure job to pay for it for a long time.

[Nancy_s soothsayer]

Similar houses like that in my new neighborhood here in Austin, Texas, came with price tags below $200 thousand when I moved in 2006. But in La-la land of California, the price you are paying seems reasonable enough: 40% off from the peak of 2005. Congratulations for finding the house you like. I say go for it. I only pray for you that you have a very secure job to pay for it for a long time.

[Nancy_s soothsayer]

Collectively, we should all pretend everything is okay, keep going to the safety of our secure jobs, let the government do its job of regulating the markets, let somebody in authority do his job of keeping everyone toe the line, and we keep spending for the economy. Individually, however (including the ones in government), we all say “It’s not my problem.” There’s your solution, ostrich!

[Nancy_s soothsayer]

Collectively, we should all pretend everything is okay, keep going to the safety of our secure jobs, let the government do its job of regulating the markets, let somebody in authority do his job of keeping everyone toe the line, and we keep spending for the economy. Individually, however (including the ones in government), we all say “It’s not my problem.” There’s your solution, ostrich!

[Nancy_s soothsayer]

Collectively, we should all pretend everything is okay, keep going to the safety of our secure jobs, let the government do its job of regulating the markets, let somebody in authority do his job of keeping everyone toe the line, and we keep spending for the economy. Individually, however (including the ones in government), we all say “It’s not my problem.” There’s your solution, ostrich!

[Nancy_s soothsayer]

Collectively, we should all pretend everything is okay, keep going to the safety of our secure jobs, let the government do its job of regulating the markets, let somebody in authority do his job of keeping everyone toe the line, and we keep spending for the economy. Individually, however (including the ones in government), we all say “It’s not my problem.” There’s your solution, ostrich!

[Nancy_s soothsayer]

Collectively, we should all pretend everything is okay, keep going to the safety of our secure jobs, let the government do its job of regulating the markets, let somebody in authority do his job of keeping everyone toe the line, and we keep spending for the economy. Individually, however (including the ones in government), we all say “It’s not my problem.” There’s your solution, ostrich!

[Nancy_s soothsayer]

Given the current trend when almost everyone is trying to scam each other and justice is enforcement much delayed or none, in about 5 to 10 years, America will operate the housing business much like in a third world country – cash buyers only will be entertained or buyers will have to pay huge interest rates (usury to the hilt.)

[Nancy_s soothsayer]

Given the current trend when almost everyone is trying to scam each other and justice is enforcement much delayed or none, in about 5 to 10 years, America will operate the housing business much like in a third world country – cash buyers only will be entertained or buyers will have to pay huge interest rates (usury to the hilt.)

[Nancy_s soothsayer]

Given the current trend when almost everyone is trying to scam each other and justice is enforcement much delayed or none, in about 5 to 10 years, America will operate the housing business much like in a third world country – cash buyers only will be entertained or buyers will have to pay huge interest rates (usury to the hilt.)

[Author]

Posts