U.S. Housing Prices Explosion Making Repatriation a Less Realistic Option for Many?

[heybruce]

1 hour ago, newnative said:

    I was just re-reading this post and I think one of your statements may be incorrect.  You say that if you sell a house you have lived in but don't buy a replacement you will pay a capital gains tax on the profit, which, as you say, can be 'huge' as most homes do increase in value over time.

    However, this seems to be current tax law, which I'll paste from Investopedia:

    

On Aug. 5, 1997, the Taxpayer Relief Act of 1997 took effect. The act did away with the continual unlimited deferral of profits and replaced it with capped exclusions.4 The current capital gains rules around the sale of your main home allow single taxpayers to exclude $250,000 in profits on their home's sale. Married couples who file jointly can exclude $500,000 from their taxable income.

 

Age is not a factor, and you do not have to buy a replacement home. After you take the exclusion, you could buy a less expensive home or revert back to being a renter. Better still, the IRS will let you use the exclusion each time you sell your primary residence.5 To qualify for the current deferral rules, there are two rules:

 

1. You must have owned and used the home as your primary residence for at least two out of the previous five years. These two years do not need to be consecutive.
2. You cannot have used the exclusion during the preceding two years.5

  The change in the tax law wouldn't have helped your father if he sold before 1997 but if he sold after the new law and the home was his primary residence for 2 of the last 5 years, it seems he should not have had to pay any capital gains tax except on any of the profit over the limit allowed, depending on his filing status.  This 1997 tax law seems like a positive change for homeowners, unless I am misreading it.

Good to know, thanks.  My father sold before 1997.

 

However a house used as a personal residence and then turned into a rental is subject to Capitol Gains taxes, even if the inflation adjusted value of the house has not increased when it is sold.  Something for owners thinking of becoming landlords to consider.

[newnative]

45 minutes ago, heybruce said:

Good to know, thanks.  My father sold before 1997.

 

However a house used as a personal residence and then turned into a rental is subject to Capitol Gains taxes, even if the inflation adjusted value of the house has not increased when it is sold.  Something for owners thinking of becoming landlords to consider.

Yes, that was the case with the last condo I owned in the US.

[GinBoy2]

Come on folks get real.

 

If you move from a high appreciating region to a low appreciating region it is going always going to be an issue.

 

It's like moving from the San Francisco Bay area to pudunk Alabama then in 10 years saying, I wanna move back to San Francisco.

 

Surprise Surprise, it ain't gonna happen

 

For expats who did cash out, for that lower cost of living thing in Thailand, there is some brutal truth.

 

Surprise Surprise the same reality exists if you want to return from Thailand to the US, and probably I might add most of Western Europe

[GinBoy2]

On 8/8/2022 at 8:29 PM, heybruce said:

These positive stories are people bragging about how well they did by buying at the right time and in the right place.  How are they anything but a distraction?

 

If you've followed the news you know that wannabe first time home buyers are also being priced out of the market.  Do you think positive stories are helping them?

For the most part that not true.

 

Many folks use real estate as part of their retirement planning coupled with 401K's etc.

 

I don't 'brag' about it, but both in Thailand and the US it's provided us with steady income.

 

Now the first time buyer thing, I could probably find news stories from 20, 30 years ago stating the same thing.

 

Curiously enough all our kids in CO and CA seem to have found their way through the apparently insurmountable challenge and all three of them now own, well mortgaged, a home

[heybruce]

3 hours ago, GinBoy2 said:

For the most part that not true.

 

Many folks use real estate as part of their retirement planning coupled with 401K's etc.

 

I don't 'brag' about it, but both in Thailand and the US it's provided us with steady income.

 

Now the first time buyer thing, I could probably find news stories from 20, 30 years ago stating the same thing.

 

Curiously enough all our kids in CO and CA seem to have found their way through the apparently insurmountable challenge and all three of them now own, well mortgaged, a home

Here we have the old problem of explaining to people that anecdotal evidence does not prove or disprove broad generalizations.

 

It all depends on when and where you buy.  Parts of California and Colorado have seen significant appreciation.  However this is not true everywhere.

 

From a post by me on July 11:

 

" Housing experienced an average inflation rate of 4.19% per year. This rate of change indicates significant inflation. In other words, housing costing $100,000 in the year 1967 would cost $953,910.69 in 2022 for an equivalent purchase. Compared to the overall inflation rate of 3.99% during this same period, inflation for housing was higher. "  https://www.in2013dollars.com/Housing/price-inflation

 

An investment return of 0.2% a year after inflation isn't that great. 

[GinBoy2]

4 minutes ago, heybruce said:

Here we have the old problem of explaining to people that anecdotal evidence does not prove or disprove broad generalizations.

 

It all depends on when and where you buy.  Parts of California and Colorado have seen significant appreciation.  However this is not true everywhere.

 

From a post by me on July 11:

 

" Housing experienced an average inflation rate of 4.19% per year. This rate of change indicates significant inflation. In other words, housing costing $100,000 in the year 1967 would cost $953,910.69 in 2022 for an equivalent purchase. Compared to the overall inflation rate of 3.99% during this same period, inflation for housing was higher. "  https://www.in2013dollars.com/Housing/price-inflation

 

An investment return of 0.2% a year after inflation isn't that great. 

And there is the rub.

 

The US is a huge country, Not everywhere is California or Manhattan. Equally not everywhere is some crime ridden inner city Hell hole, as has often been suggested in this thread.

 

Most of us seen to still be able to live regular middle class lives in not unaffordable homes and not in a version of 'Friends' or living under a freeway underpass

[heybruce]

5 minutes ago, GinBoy2 said:

And there is the rub.

 

The US is a huge country, Not everywhere is California or Manhattan. Equally not everywhere is some crime ridden inner city Hell hole, as has often been suggested in this thread.

 

Most of us seen to still be able to live regular middle class lives in not unaffordable homes and not in a version of 'Friends' or living under a freeway underpass

And a lot of first time home buyers and returning expats are finding it difficult to buy or rent after recent price and interest rate increases.

[GinBoy2]

1 hour ago, heybruce said:

And a lot of first time home buyers and returning expats are finding it difficult to buy or rent after recent price and interest rate increases.

Now I'm assuming you like most of us, late 50's 60's.

 

Remember what interest rates were back in the 80's when most of us bought our first homes?

 

I think I had something like a 13% mortgage, which at the time I was pretty relived at.

 

Today they are hovering around 5%.

 

Lot of overhyped nonsense going around, which if you believe means most of us of a certain age should be homeless and living in a cardboard box under a freeway underpass

[heybruce]

34 minutes ago, GinBoy2 said:

Now I'm assuming you like most of us, late 50's 60's.

 

Remember what interest rates were back in the 80's when most of us bought our first homes?

 

I think I had something like a 13% mortgage, which at the time I was pretty relived at.

 

Today they are hovering around 5%.

 

Lot of overhyped nonsense going around, which if you believe means most of us of a certain age should be homeless and living in a cardboard box under a freeway underpass

No, I don't believe "most of us of a certain age" can be described with any blanket statement.

 

I believe that when home prices, interest rates, and rents go up some people get priced out of the market.

 

I also believe that tales of real estate success are repeated far more often than less positive experiences, and that the less positive experiences are very common.  Therefore I offer a counter opinion when I see these frequent "you can't lose with real estate" stories.

[newnative]

8 hours ago, GinBoy2 said:

For the most part that not true.

 

Many folks use real estate as part of their retirement planning coupled with 401K's etc.

 

I don't 'brag' about it, but both in Thailand and the US it's provided us with steady income.

 

Now the first time buyer thing, I could probably find news stories from 20, 30 years ago stating the same thing.

 

Curiously enough all our kids in CO and CA seem to have found their way through the apparently insurmountable challenge and all three of them now own, well mortgaged, a home

      Totally agree.   I have a large, extended family and everyone, except my youngest niece now just out of college, has wanted, and has managed to, purchase a home--in states ranging from Pennsylvania, to Colorado, to Florida, to North Carolina, to New Jersey, to Virginia.  I think they all saw their purchase, as I did, as both an investment and a home--with all the personal things involved with "home" that make a home investment something different than investing in a stock, a bar of gold, etc.

[Jingthing]

5 hours ago, heybruce said:

And a lot of first time home buyers and returning expats are finding it difficult to buy or rent after recent price and interest rate increases.

Which is what the topic is about.

[Jingthing]

This provides a lot of detailed information about the many causes of the lack of affordable housing crisis, the devastating continues, and some possible solutions. But the conclusion is it will take several years, over a decade, assuming effective policies are actually followed. There is no hope offered in any of this to lower income / lower wealth returning expats.

 

 

[GypsyT]

The worse thing happened, as some here predicted;

 

"Also, Miami is a place where you need to seriously research what you are getting into.  There are parts of the city where you don't want to live, structures built before modern hurricane construction codes that are just waiting for a big storm to blow them down, many areas that regularly flood, expensive and difficult to obtain insurance, etc.

Edited July 19 by heybruce"

 

I got so excited about Ft Lauderdale cheap condos I didn't think far enough.

Thank you guys opening my eyes and made me back off that masket! I could have lost my hard earned $ there...

 

I'm currently in Gran Canaria, Spain, checking market. The weather is 100% perfect year around. As good as I had in California winter time.

However, many other things are not as good as in Thailand or in the States.

 

 

 

[EVENKEEL]

5 hours ago, GypsyT said:

The worse thing happened, as some here predicted;

 

"Also, Miami is a place where you need to seriously research what you are getting into.  There are parts of the city where you don't want to live, structures built before modern hurricane construction codes that are just waiting for a big storm to blow them down, many areas that regularly flood, expensive and difficult to obtain insurance, etc.

Edited July 19 by heybruce"

 

I got so excited about Ft Lauderdale cheap condos I didn't think far enough.

Thank you guys opening my eyes and made me back off that masket! I could have lost my hard earned $ there...

 

I'm currently in Gran Canaria, Spain, checking market. The weather is 100% perfect year around. As good as I had in California winter time.

However, many other things are not as good as in Thailand or in the States.

 

 

 

I always heard Orlando was out of the danger zone weather but not this time. I also always eyeballed Florida for a home.

 

I'm in the US for a visit, paying $6.25 gal gas in Ca.

[KhunLA]

4 hours ago, EVENKEEL said:

I'm in the US for a visit, paying $6.25 gal gas in Ca.

So the price has come down   ????

[thaibeachlovers]

On 8/23/2021 at 2:29 PM, Berkshire said:

The increase in price is partially to do with people stampeding to get in before the interest rates start to climb.  And if home prices rise, so will the rental price.  I do wonder if this is another real estate bubble destined to burst in the not-so-distant future. 

While I do not live in the US, the situation is the same where I live, so I hope for the bubble to burst so that all us poor people get to rent a decent place to live in.

[thaibeachlovers]

On 8/21/2021 at 10:07 PM, Stevemercer said:

It is the same all over the developed world - house prices going up 15 - 30% over the last year.

 

I always had a safety net of going back to Australia and buying a modest house, if I had too, but now it's pretty marginal. Rents have gone up be a similar amount.

 

It seems to be the opposite in Thailand. The housing market and rents are stagnating or going down.

 

IMO a large cause of rising prices has to do with immigration. Most western countries have lots of immigrants, all requiring somewhere to live, and sometimes the country isn't building enough houses, as I can attest to.

Far as I know, Thailand doesn't have a large number of people immigrating to live, as they sensibly make it hard to get citizenship.

[thaibeachlovers]

On 8/8/2022 at 3:53 PM, Fat is a type of crazy said:

I do feel for people in general in this inflationary environment. In Australia gas and electricity prices are going through the roof. I got a bit of a shock with a 2 month bill given for 3 weeks I was in Thailand. There's stories of pensioners and others just being cold and covering with a blanket through what has been a cold winter. Not good enough given we have sufficient gas which is being shipped overseas for larger profits. Hope it's not too off topic but these are tough times for those on a low income who have a home let alone the homeless. 

Sometimes the house owners are worse off as rates are rising at ridiculous rates.

 

[Social Media]

 

[GinBoy2]

9 hours ago, KhunLA said:

So the price has come down   ????

Well as much as I love my home state, somethings are just insane, gas prices being one of them.

 

Just talked to my ex, she's paying $6.09/gal in Santa Rosa (SF Bay Area)

 

This morning I filled up for $3.59/gal

 

Insanity!

[KhunLA]

7 minutes ago, GinBoy2 said:

Well as much as I love my home state, somethings are just insane, gas prices being one of them.

 

Just talked to my ex, she's paying $6.09/gal in Santa Rosa (SF Bay Area)

 

This morning I filled up for $3.59/gal

 

Insanity!

And the US has the largest oil reserves ... along with record profits for Big Oil

 

NO KISS ... NO KY

[GinBoy2]

6 hours ago, KhunLA said:

And the US has the largest oil reserves ... along with record profits for Big Oil

 

NO KISS ... NO KY

It's odd.

 

When I lived in the Bay Area I used to drive through Richmond  on my way to work, past some of the largest refineries in the country,

 

Here in South Dakota we're hundreds of miles from the nearest refinery, yet gas is nearly $3 cheaper than in CA

[KhunLA]

25 minutes ago, GinBoy2 said:

It's odd.

 

When I lived in the Bay Area I used to drive through Richmond  on my way to work, past some of the largest refineries in the country,

 

Here in South Dakota we're hundreds of miles from the nearest refinery, yet gas is nearly $3 cheaper than in CA

Taxes taxes & more taxes ????

Same with NJ ... so my brother told me, ~$4.00

[placeholder]

 

On 8/12/2022 at 5:32 AM, GinBoy2 said:

Now I'm assuming you like most of us, late 50's 60's.

 

Remember what interest rates were back in the 80's when most of us bought our first homes?

 

I think I had something like a 13% mortgage, which at the time I was pretty relived at.

 

Today they are hovering around 5%.

 

Lot of overhyped nonsense going around, which if you believe means most of us of a certain age should be homeless and living in a cardboard box under a freeway underpass

You may remember what interest rates were back then, but you clearly have forgotten what homes cost back in the 80's.

https://fred.stlouisfed.org/series/MSPUS

[GypsyT]

" Just talked to my ex, she's paying $6.09/gal in Santa Rosa (SF Bay Area) "

Ha! That's cheap by European standards. Only $ 1,60/liter.

It's hard to get a liter under $ 2,00.....

 

 

[EVENKEEL]

6 hours ago, GinBoy2 said:

It's odd.

 

When I lived in the Bay Area I used to drive through Richmond  on my way to work, past some of the largest refineries in the country,

 

Here in South Dakota we're hundreds of miles from the nearest refinery, yet gas is nearly $3 cheaper than in CA

Thanks to dear biden those refineries heard his speeches of going green and downsized their operations for gasoline. Or so the G&O executive explained. 

 

 

[heybruce]

6 hours ago, EVENKEEL said:

Thanks to dear biden those refineries heard his speeches of going green and downsized their operations for gasoline. Or so the G&O executive explained.

Really?  You're blaming it all on the shift to green energy?  You don't think a booming economy and Russia's invasion of Ukraine has anything to do with it?

 

Gasoline, microprocessors, housing, etc. all respond to supply and demand.  When there is an increase in demand prices go up prompting an increase in supply.    However increasing refining capacity, building new chip factories, starting new housing developments, etc. can take years.  Supply and demand will eventually even out in these areas, but there will undoubtedly be other issues by then.  Welcome to life in the real world.

[heybruce]

On 10/2/2022 at 8:32 AM, EVENKEEL said:

I always heard Orlando was out of the danger zone weather but not this time. I also always eyeballed Florida for a home.

 

I'm in the US for a visit, paying $6.25 gal gas in Ca.

California is one of the most expensive places in the US for gasoline.  Its prices are about what people pay in Europe.

 

Orlando is relatively safe if you live in a well constructed building that is not in a flood zone.  There are flood zones all over the US, and people who foolishly choose to live in them.  However storm surges are the major killers in hurricanes, and Orlando is far from a storm surge area.

[EVENKEEL]

On 10/3/2022 at 2:55 PM, heybruce said:

Really?  You're blaming it all on the shift to green energy?  You don't think a booming economy and Russia's invasion of Ukraine has anything to do with it?

 

Gasoline, microprocessors, housing, etc. all respond to supply and demand.  When there is an increase in demand prices go up prompting an increase in supply.    However increasing refining capacity, building new chip factories, starting new housing developments, etc. can take years.  Supply and demand will eventually even out in these areas, but there will undoubtedly be other issues by then.  Welcome to life in the real world.

Easy Hoss, biden sent out signals of his intentions for fossil fuel and the G&O people responded which is but one of the reasons. We had more refinery capabilities already before biden took over and pushed for green energy. That is the real world. 

[heybruce]

8 hours ago, EVENKEEL said:

Easy Hoss, biden sent out signals of his intentions for fossil fuel and the G&O people responded which is but one of the reasons. We had more refinery capabilities already before biden took over and pushed for green energy. That is the real world. 

"...which is but one of the reasons."

 

Yes, a very small part of the reason.  Increasing demand post-Covid and restrictions on the sell of Russian energy are the primary drivers of the increase in energy prices.