Will 2012 be the "real" year of the short sale?

If you have an underwater house you are thinking about dumping you might want to get off your duff and list the thing. You see normally when you sell a house for less than you owe on it you get a nasty little surprise from Uncle Sam, a tax bill for the difference. During the bust legislation was passed to put this tax on hold to make it easier for people to short sell. However that legislation expires at the end of 2012. Both the Federal government and the California State gov passed these acts so currently there are no tax consequences from a short sale.

Of course the debt forgivness act could be extended. But what if it isn't? This would probably mean fewer short sales and a lot more foreclosures. There are no tax consequences from foreclosure because in Cali most of those loans are non-recourse (but I'm no tax expert so don't listen to me).

The unfortunate thing is that most people have no idea about this tax thing and may not feel the need to hurry up and get out while the gettin's good.

Oz is in denial

Just got back from my vacation to NZ and OZ, and of course I couldn't help but check out the prices of real estate over there. In fact during many of the tours the guides would continually point out how "well" there market was doing. It was incredible, it was like being here in 2006. Nearly all the people I spoke with, if the topic of home prices came up just seemed to say all the stuff we heard 5 years ago. "it's different here", "price might level off, but I doubt they will fall" etc. NZ was by far the worst. The prices of everything over there is unbelievable. I dunno how they live. But the prices of housing was off the charts as compared to incomes.
Median incomes are comparable to the US, yet the cost of nearly everything was higher. Australia was not nearly as bad as NZ in that respect but in the two cities we visited things were quite a bit higher than here. Of course the cost of living in most large cities is higher than living in the burbs but I was not able to really check the costs out in the burbs. We did manage to get out into the burbs in Melbourne and the tour guide would point out housing tracts give us approximate costs. If those were correct they their prices are comparable to ours at the peak of our bubble. We saw shacks in the city that he indicated were well north of a million (and I do mean shacks!), in the burbs we saw small average looking tract homes that were $500k to $800k.

NZ and OZ are beautiful places and well worth a visit. But save your pennies cuz int aint a cheap vacation. Oh, and driving on the opposite side of the road is interesting too!

Happy Holidays

Happy Holiday's ya'll

I'm taking the rest of the year off and heading to New Zealand and Australia.

Ah the good old days

While looking at Zillow I ran across this. I found it rather humorous and reminder of the heady days of bubble mania. This guys puts a "make me move" price into Zillow in 2007 of $1.4M for a house that now has a zestimate of $505k. And lemme tell ya, there's no way this place would sell for $505k, that's probably at least $50k too high considering there is not a lick of landscaping. I was actually looking at 18825 Ravenhurst which is listed at $1.2M and has a zestimate of nearly $900k. Which I thought was WAY high. It's a spectacular place on 2 acres but there's no way it will get 1.2M and I seriously doubt it would even get Zillows $900k estimate. Based on comps this place is worth closer to $750k.

Ah, the good-ole days. I bet this guy is wishing someone had taken him up on his "make me move" price.