US housing recovery in 'bubble territory'

**michaelr** · 28th October 2009 08:37 PM

US housing recovery in 'bubble territory'

Paying people to take loans they cant afford is ....umm...well...stupid, no thats not it,...retarded...no....oh yea, just fucking insane.

New home sales fall a surprising 3.6 percent

Pop went that bubble.

**william the wierd** · 30th October 2009 06:57 AM

And the beat goes on. The program has been extended to existing homeowners now that the program has blown through the pool of first time buyers that like to catch falling knives.

**Blueneck** · 30th October 2009 07:09 AM

I don't see why everyone thinks the price of homes going up is such a great thing. It just seems inflationary to me.

Myself, I'd like to see the tax on profit of selling homes raised back to pre-90's levels.

When President Clinton inked the Taxpayer Relief Act of 1997 on August 5, 1997, he dramatically changed the way home sales are taxed. Prior to the change, homesellers could delay paying tax on a home sale if they "rolled-over" the gain and purchased a more expensive home within 2 years of the sale. A separate rule applied to those over age 55 that gave them a once-in-a-lifetime $125,000 exclusion. Under the new tax code, both the "rollover" provision and $125,000 exclusion are replaced with a new exclusion that should allow most homeowners to sell their primary residence without tax.

Generally, when you sell an asset for more than you paid, you incur a tax on the profit. This general rule applies to the sale of your home as well. However, under the new law, as long as this profit is less than $250,000 ($500,000 for joint filers) the gain will not be taxed. That's right, as long as you meet a few simple rules, gains of up to $250,000 ($500,000 for joint filers) on the sale of a home go untaxed.

http://www.estateattorney.com/121new.htm

This just drives the price of homes up and what's the good of that? I think states like it because they collect more property taxes in an inflated market.