The Boomers May Be KEY in the Housing Recovery.Posted on September 23, 2011
A spokesman for the National Association of Realtors (NAR) Walt Maloney  say that the Boomers are actually better equipped to buy than in any previous time period. This generation tend to be financially stable and have the necessary 20% down payment on a home and enough buying power to get 176% more house that the national median. The real question is…Will they do it?
Maloney says that there are some pretty good reasons why they might. Baby Boomers tend to have more equity in their existing homes since they have been there longer. They also are at an age when a lifestyle change is traditional and desirable. The boomers that I have talked to care more about ease of living than anything else, and they are willing to pay for it. They care more about easy access to restaurants and retail. They also desire a living environment that is easy to maintain such as a Condo.
According to Jed Kolko , chief economist for Trulia, he predicts that boomers will be willing to take losses on their current properties (which they can afford because of those equity “cushions”) and “trade down” in home size in exchange for more convenience. This would enable younger buyers to get into those larger homes at a good price and potentially re-energize the housing market.
There is however a huge potential problem that could make the above scenario nearly impossible and cause those boomers to hunker down and stay right where they are. As part of Obama Care Bill if you sell your house after 2012 you will pay a 3.8% sales tax on it. That’s $3,800 on a $100,000 home. Right now the National Association of REALTORS is all over this and working to get it repealed before it takes effect. Under the new health care bill all real estate transactions will be subject to a 3.8% Sales Tax. If you sell a $400,000 home, there will be a $15,200 tax. This bill has the potential of not only unfairly taxing homeowners to fund Obama Care but could slow the already struggling Housing Market to a complete halt.
There are few things that you can do to avoid being taxed. First, you can make the move NOW to avoid the potential changes. Second, if you think you want to wait a few years before making a move, you should be calling and writing your congressmen now. You can also make an informed decision at the polls in the 2012 elections.
Author: Shelley Frody
CITY2SHORE Real Estate
September 23, 2011