Home Prices Fall Again in April
Home Prices
Standard & Poor’s Case-Shiller index of 20 major cities fell 18.1 percent in April. The good news was that the April home prices marked the third straight month the decline was not a record. Eight of the 20 metro areas tracked in this report showed price gains from March.
Robert Shiller said:
“My guess would be that home prices are going to level off — they’re not going to keep falling. I am not optimistic that we’re going to see any sharp rebound.”
One should note that the Case-Shiller 20-city index is off almost 33 percent from its peak in the second quarter of 2006. This equates to home values around 2003-levels.
Cap and Trade: Another Hurdle for the Housing Market
Did you know The American Clean Energy and Security Act requires all homes sales to be conditioned upon an energy audit and an energy rating assessment/ labeling program.
The American Clean Energy and Security Act of 2009, a 1,200-page behemoth consisting of a cap-and-trade program for greenhouse gas emissions, a federal renewable electricity mandate, and a suite of new mandatory energy efficiency standards, will impose 397 new federal regulations (which require traditional federal agency rule makings) and 1060 new mandates on an American public already overwhelmed by extensive federal regulation.
Congressmen Ron Paul, on 6-29-09 said:
The Cap and Trade Bill HR 2454 was voted on last Friday. Proponents claim this bill will help the environment, but what it really does is put another nail in the economy’s coffin. The idea is to establish a national level of carbon dioxide emissions, and sell pollution permits to industry as the Catholic Church used to sell indulgences to sinners. HR 2454 also gives federal bureaucrats new power to regulate a wide variety of household appliances, such as light bulbs and refrigerators, and further distorts the market by providing more of your tax money to auto companies.
Just like the TARP bill, this is all happening too fast. Anyone who thinks that Washington can craft a respectable bill in this short period of time is dreaming. The specifics of the bill aren’t being publicly discussed. The Democrats are trying to push this through so fast no one will know what hit them. The media is complicit in this. This is not the time to increase energy costs, either.
Kansas City Power & Light said the bill will force them to buy so many carbon allowances for coal that electricity rates could rise 50 percent by 2012, and another 70 percent by 2020.
Let’s get some positive economic growth first, not minus 6.6%, before we kick in some expensive program/tax.
Over 7,000 climate scientists have spoken out and signed a petition that states “climate change” is NOT caused by man, more than the number of scientists who wrote the UN charter on the topic.
This, along with the “stimulus” and “health care reform” is able to succeed to a degree because the American people are, for the most part, sheep who demand to be led, do not care to be involved in the process, do not care to know what is happening in their government, do not care to act on their own behalf and figure that Obama is more intelligent than they are. In fact he is leading them down the road to higher taxes, higher inflation and higher costs on all natural resources, all because of a false theory that curtailing carbon emissions can make a difference.
Kim Strassel, published in the (June 2009) Wall Street Journal:
“Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as ‘deniers.’ The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.
“In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country’s new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country’s weeks-old cap-and-trade program.
“The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. — 13 times the number who authored the U.N.’s 2007 climate summary for policymakers. Joanne Simpson, the world’s first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak ‘frankly’ of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming ‘the worst scientific scandal in history.’ Norway’s Ivar Giaever, Nobel Prize winner for physics, decries it as the ‘new religion.’ A group of 54 noted physicists, led by Princeton’s Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists’ open letter.)
“The collapse of the ‘consensus’ has been driven by reality.”
Scientists – the ones without a political agenda – have shown that solar activity correlates with temperature changes. In fact, it correlates stronger to changes than CO2 does, and changes in CO2 levels FOLLOW changes in temperature by about 800 years. The only reason that CO2 and temperature would be increasing at the same time NOW is that temperature increased about 800 years ago. By the way, temperatures have been decreasing for a couple of years now.
Go ahead, be ignorant and say this is great. Believe that our government is saving us from disaster when they’re really creating one. What we should be doing is using nuclear power in the same way as France.
San Diego real estate
Cap and Trade Bill … Bad for the Housing Market
Here in San Diego, the housing market has yet to bottom out. So, what do you think an additional $1,200+ a year in energy taxes will do to housing affordability?
Peter Schiff appeared on the Glenn Beck Show to talk about the “climate change” bill that’s coming up for a vote, which, since it really won’t make a bit of difference in the climate, is nothing more than the most inefficient tax bill in history. Down with cap and trade!
San Diego Little Italy condos
Real Estate Tax Deduction – Soon To Be History?
Once the housing market bounces off its’ bottom, is a phase out the mortgage interest deduction in the cards?
“There are no cows more sacred in the tax code than the deductions for mortgage interest and property taxes. Together, they add up to at least the $ 75 billion annual subsidy for housing and Homeowners. ” The New York Times.
Some 37.2 million taxpayers claimed the deduction in 2002, writing off $336.6 billion — or about $9,000 per taxpayer. It represented 37% or so of itemized deductions and generated slightly more in deductions than itemized deductions for deductible state and local taxes and twice as much in deductions as charitable donations.
In 2005 it was estimated that:
* The mortgage interest deduction will cost the Treasury $72.6 billion, according to congressional estimates.
* The $250,000 and $500,000 tax-free exclusions of home sale profits for single sellers and joint filers, respectively, will cost $23 billion .
* Property tax write-offs cost $20 billion, and tax subsidies for local and state housing bond programs account for $1 billion.
When a congressional committee examined the distribution of homeowner benefits for 2004, it found that people earning $200,000 and more a year – just one-half of 1% of all homeowners filing for deductions – pocketed 22% of the $70.2 billion in write-offs in 2004.
In 2007, Rep. John D. Dingell (D-Mich.) unveiled a draft of his “carbon tax” legislative reform package. Part of this draft legislation was a phase out the mortgage interest deduction on large homes. The phase-out schedule for the mortgage interest write-off, beginning with houses of 3,000 square feet, which would lose 15 percent of their deductions, and ending with houses of 4,200 square feet and larger, which would receive no deductions at all.
Dingel said: “In order to address the issues of climate change, we must address the issue of consumption-we do that by making consumption more expensive.”
Naturally, with the real estate market bust, the Dingell package was shelved. Once the housing market recovers, lets’ say two years from now, it’s a very good bet the administration will be looking hard at ways to increase taxes to pay down the huge bailouts. The unusual financial troubles and the move to green, will be the perfect time to push through such legislation. Unlike the Dingel proposal ,which was aimed at larger homes, the future legislation will most probably cover all mortgage interest deductions. To increase its’ chance at passage, it is a good bet it will be a phased in plan with deductions decreasing over a number of years.
Right now, President Barack Obama’s proposed budget calls for a cap on the mortgage tax deduction for couples earning $208,850 or more. Households at the 33% and 35% tax rates can currently claim deductions at those rates — Obama would reduce their deduction to only 28% of the value of those payments. One should keep in mind that this is just the first step to what I see as total elimination of mortgage tax deduction. If this passes now, it is likely that in Obama’s second term the earning cap for the mortgage tax deduction will be reduced as the first step to zero or a very low amount, so as to be just a benefit for the low income earners.
downtown San Diego real estate
Current Government Actions – Short-Term Pleasure, but There’s Long-Term Pain
Jim Rogers (In 1970, Rogers joined Arnhold & S. Bleichroeder, where he met George Soros. That same year, Rogers and Soros founded the Quantum Fund. During the following 10 years the portfolio gained 4200% while the S&P advanced about 47%. It was one of the first truly international funds) in a recent TV interview said about the recent government actions and bail-outs: “
“It’s a mistake what they are doing. It’s giving short-term pleasure, but there’s long-term pain as we are going to have much higher inflation, much higher interest rates and a worse economy down the road. Throughout history, the center of the world has shifted to where the capital is, where the assets are. You don’t see any period in history where things are shifting to the debtors, and America’s the largest debtor nation in the history of the world. Unless something’s different this time, unless the world’s changed very very dramatically, the center of the influence, the center of the power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that’s where all the money is. Have you ever heard of anybody saying, ‘Let’s go to where all of the debtors are’? It just doesn’t happen that way.”
Obviously, Rogers thinks the United States and the U.K. are in bad shape and will be for some time. He likens the current situation to that of the 1930s. He says:
“In the 1930s, we had a huge stock market bubble which popped. And then politicians started making many mistakes. They became protectionist. They made solvent banks take over insolvent banks and then both banks failed in the end. They are making many of the same mistakes now. What’s different this time is that we are printing huge amounts of money which they did not print at that time. So, we are going to have inflation this time.”
San Diego Little Italy condos
Housing Analysis by Harvard University
Eric Belsky of the Harvard University Joint Center for Housing Studies. Housing Analysis and Discussion.
It’s always refreshing to see what top thinkers outside of the real estate industry really think about the condition and direction of the real estate market.
San Diego California real estate agents