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I’m considering moving to Inglewood (LA area) – does anyone know if that is a diverse area?

Also, Temecula *used* to be conservative. The city just voted to raise it’s sales tax to 9% – higher than San Francisco.

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IMO as long as the fed keeps benchmark rates low – and I suspect they will, the housing and stock market bubble will continue to grow grow grow.

All it takes is one utterance of the word ‘tax’ or ‘regulation’ by Mr. T or Ryan and the market soars.

It’s ridiculous.

It’s 2006 all over again. Or maybe 2005.

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[quote=plm]Why do people think there is a bubble?

According to historic data,
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

It seems like the geometric average is 7 for the last 10 years vs 10 percent in the past. So doesn’t this mean the market is undervalued since its been growing less than historic levels?[/quote]

Yes, but consider that GDP growth has been subpar for nearly a decade, around 2%. And yet as mentioned the market (dow) has soared (relative to gdp) during the same time period.

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~0% fed benchmark interest rate for nearly 10 years = epic bubbles in stock, housing and autos.

Unprecedented in fed history.

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[quote=flu-redux]If I were to downsize, I could probably find 3/3 condo that would cost almost the same as how much I originally paid for my SFH, if I were to factor on the additional $200-300/month extra I would need to pay for HOA on the condo.

So there is no point in me downsizing. Folks that bought much earlier and already paid off their home, it would make even less sense probably.[/quote]

Condos and their buildings often look nice/appealing, but in practice suck to live in based on my experience – I’ll take a smaller SFH any day over a condo.

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[quote=no_such_reality]
So you may have a few options, re target towards that rare first time buyer that will see the house as live able and nice for 3-5 years until they’re ready to remodel[/quote]

Those buyers are rare? I guess times have changed and I’m out of touch with reality; when I bought my 1st house it wasn’t perfect, but with a little elbow grease it was pretty nice. But I bought it at a decent price.

So it sounds like in today’s world (in areas of So Cal) a 3/2.5 house in good (but not perfect) condition on a quiet street within easy walking distance to excellent schools is so undesirable it can’t be sold unless sold at wholesale.

That is what I suspect and am seeing.

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Are capital gains taxes typically withheld @ close of escrow?

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[quote=plm]State cap gain can’t be right since the highest possible is 13.3 and if you were paying the highest rate, you would have to pay the 20 percent fed rate plus the 3.8 medicare rate as well.

I don’t want to be a landlord either but decided not to sell because I would be paying 20 + 3.8 + state tax.

More likely I’ll figure out how to do a 1031 exchange to get a vacation home after renting it out first to meet 1031 rules.[/quote]

I am selling reluctantly, I’ve never really cash flowed and in the longer term I doubt I’d be able to hold onto the property so I felt I was either going to pay now or later (taxes).

I want to do a 1031, but I can’t really afford to buy another 350k property (since a 1031 requires the replacement property to be at the same or greater value?)

I thought about selling both my rental and primary property and buying a multi-family property and using a 1031 to make that purchase.

But was told partial 1031’s usually don’t pencil out.

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[quote=SK in CV]Lower of the two.[/quote]

Thanks – that’s what I was afraid of, I thnk these cap gains calcs are roughly correct then.

Original purchase price: $272,000 (not including commissions, etc..)
Sale Price: $333,000
It’s been rented for (5) tax years with an annual depreciation of $10,318

Depreciation recap: 13250
Fed Cap Gain: 6653 (15%)
State (CA) Cap Gain: 14603.25 (15%)
ACA: 0%

I don’t understand why state cap gains so high?

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