If you buy a preconstruction condo, take it to hard contract, hold it for 12 months, then sell or reassign the contract to someone else, will you be taxed at ordinary income or long term capital gains tax?
Replies
37Beach Lover
I also remember the stock market bears in 1999, the market went up another 25% from there. And where is the stock market today, about where it was then, after the second greatest bear market in our life times, and that market is made of intangable assets, you cannot live in your worldcom house. But you can along 30A, and collect rent also.
Beach Lover
Buckhead,
The real bubble in the late 90'S was a technology bubble and the NASDAQ is the true indicator of what happened in that sector. The NASDAQ remains 60% off its highwater mark of around 5000 and was off by over 80% at one point in time. The dow on the other hand is more of a general market indicator, and as you stated it has been flat, for about 5 years.
This scenario looks similar to the real estate situation in the US today. In general, the market is up nicely, but not outrageously. However, their are specific markets that appear to be severely overheated (supply is outstripping demand and prices are up 75% to 125%). These overheated markets, such as the area along 30A, are vulnerable. If we see a major decrease in some of these overheated markets, they could remain down for a long, long time from the current peak. However, it does not mean that the general real estate market in the US will fall so severely.
A couple of other points of interest. Heard from friend that is building some homes on the panhandle that Suntrust of Ga is no longer making real estate loans in the area (heard it second hand so it might not be true). Also, heard from another friend that got a call from Alys Beach asking why she hadn't made a bid in the first offering. Why are they calling potential bidders--is demand so low that they now have to call to get folks interested? I also heard that many of the folks that "won" the lottery in phase IV at Watercolor declined buying the property after "winning". Never heard of Arvida or any other developers having to search for buyers last year or the year before.
However, if you bought before the huge runup, as I did, and if you intend to own long term. You should be fine. If you bought 6 months ago, hoping to flip and make a killing, you could be in for some tough times.
Lots of folks seem to be angry with me for stating my opinion. That's too bad. Again, I hope I'm wrong.
The real bubble in the late 90'S was a technology bubble and the NASDAQ is the true indicator of what happened in that sector. The NASDAQ remains 60% off its highwater mark of around 5000 and was off by over 80% at one point in time. The dow on the other hand is more of a general market indicator, and as you stated it has been flat, for about 5 years.
This scenario looks similar to the real estate situation in the US today. In general, the market is up nicely, but not outrageously. However, their are specific markets that appear to be severely overheated (supply is outstripping demand and prices are up 75% to 125%). These overheated markets, such as the area along 30A, are vulnerable. If we see a major decrease in some of these overheated markets, they could remain down for a long, long time from the current peak. However, it does not mean that the general real estate market in the US will fall so severely.
A couple of other points of interest. Heard from friend that is building some homes on the panhandle that Suntrust of Ga is no longer making real estate loans in the area (heard it second hand so it might not be true). Also, heard from another friend that got a call from Alys Beach asking why she hadn't made a bid in the first offering. Why are they calling potential bidders--is demand so low that they now have to call to get folks interested? I also heard that many of the folks that "won" the lottery in phase IV at Watercolor declined buying the property after "winning". Never heard of Arvida or any other developers having to search for buyers last year or the year before.
However, if you bought before the huge runup, as I did, and if you intend to own long term. You should be fine. If you bought 6 months ago, hoping to flip and make a killing, you could be in for some tough times.
Lots of folks seem to be angry with me for stating my opinion. That's too bad. Again, I hope I'm wrong.
Admin
Don't misinterpret discourse as anger. It's hard sometimes to interpret written commentary (emoticons can help). Message boards (and e-mail) require development of a peculiar type of "filter".
Kepp it up. :wink:
Kepp it up. :wink:
Beach Fanatic
I heard from a friend of a friend that knows a farmer: Apples are not Oranges. :roll:
Beach Lover
Rick,
Actually the tech stock and panhandle real estate markets are very similar in many respects. Both runups are/were caused by huge amounts of speculation accompanied by lots of questionable borrowing practices (margin accounts in the 90's and short term interest only loans). Speculation is what got us here and its what will cause the big dropoff. Way too much temporary money and speculative lending.
There are much smarter minds than mine or yours pointing to a bubble in specific markets around the country. But, you never know. Markets can be fickle. Time will tell.
Actually the tech stock and panhandle real estate markets are very similar in many respects. Both runups are/were caused by huge amounts of speculation accompanied by lots of questionable borrowing practices (margin accounts in the 90's and short term interest only loans). Speculation is what got us here and its what will cause the big dropoff. Way too much temporary money and speculative lending.
There are much smarter minds than mine or yours pointing to a bubble in specific markets around the country. But, you never know. Markets can be fickle. Time will tell.
SoWal Expert
Skier,
You seem to be very educated in economics, and I would like you to share
your thoughts regarding the ways in which this unique local RE market will be affected from all of the things you mention in relation to way in which the total RE market across the US will be affected? To a large extent, we have been discussing the total RE market of the USA. During the great economic downturn following Sept 11, 2001, I remember this market increasing rapidly, thereby leading me and many others to believe that this local market is in some ways protected from national trends.
You seem to be very educated in economics, and I would like you to share
your thoughts regarding the ways in which this unique local RE market will be affected from all of the things you mention in relation to way in which the total RE market across the US will be affected? To a large extent, we have been discussing the total RE market of the USA. During the great economic downturn following Sept 11, 2001, I remember this market increasing rapidly, thereby leading me and many others to believe that this local market is in some ways protected from national trends.
Beach Lover
I know nothing about economics, finance, real estate, or tiddlywinks. So, here is my quote from the Alys Beach thread--
Oh well, I guess you guys have finally convinced me. Phillip must be right about the continued 20% growth per year (down from the 50% plus recently). So, that means I can double my money every 4 years. Cool. I just went out and borrowed all I could against my primary residence and my second home in Florida with an interest only loan based on LIBOR that will adjust every month. I'll come down tomorrow and buy a place in Seaside, Watercolor and Rosemary. I can't lose.
:lolabove: :clap_1: :idontno: :blink: :shock: :( 😱
Oh well, I guess you guys have finally convinced me. Phillip must be right about the continued 20% growth per year (down from the 50% plus recently). So, that means I can double my money every 4 years. Cool. I just went out and borrowed all I could against my primary residence and my second home in Florida with an interest only loan based on LIBOR that will adjust every month. I'll come down tomorrow and buy a place in Seaside, Watercolor and Rosemary. I can't lose.
:lolabove: :clap_1: :idontno: :blink: :shock: :( 😱
Beach Lover
If only we were all so smart as we think we are (including myself), we would all be gazillionaires (my guess is none of us is). Been fun debating the real estate market. We all have our opinions. As with all markets/investments, you have bears and bulls. Someone will be right, someone will be wrong. Next time the tables will be turned.
I'm moving on to lighter topics. Let you know if someone pays "crazy" money for my house.
Hope everyone has a good summer. 😀
I'm moving on to lighter topics. Let you know if someone pays "crazy" money for my house.
Hope everyone has a good summer. 😀
Beach Fanatic
If only we were all so smart as we think we are (including myself), we would all be gazillionaires (my guess is none of us is). Been fun debating the real estate market. We all have our opinions. As with all markets/investments, you have bears and bulls. Someone will be right, someone will be wrong. Next time the tables will be turned.
I'm moving on to lighter topics. Let you know if someone pays "crazy" money for my house.
Hope everyone has a good summer. 😀
Seems to me you have great forum right here to sell your home to a bunch of optimists.
Why don't you post details and price? I might buy it before it loses 1/2 it's value.
Beach Lover
My house isn't a deal at a price of over $1100 per square foot (similar to what a house down the street sold for earlier this year). But, if it doesn't sell, we are very happy with our vacation home and I feel safe with my investment made at $450 per square foot.
BUT, if you want a real bargain, I just got the most recent price sheet from Arvida sales and there were 11 price reductions on the 60 plus properties listed by Arvida community sales. Things are getting downright cheap in Watercolor. There is a real bargain on a house built by Arvida in Phase III on lot 14 Cerulean Landing. The price dropped $400k from the list price last week. It was listed at $2.795 million its down to $2.395 million for 2500 square feet. Sounds like a steal at just under $1000 per square foot with only a half mile walk to the beach. It will probably be worth $4.8 million in 4 years according to several folks contention that prices will continue to rise 20% per year. Go for it! :clap_1:
BUT, if you want a real bargain, I just got the most recent price sheet from Arvida sales and there were 11 price reductions on the 60 plus properties listed by Arvida community sales. Things are getting downright cheap in Watercolor. There is a real bargain on a house built by Arvida in Phase III on lot 14 Cerulean Landing. The price dropped $400k from the list price last week. It was listed at $2.795 million its down to $2.395 million for 2500 square feet. Sounds like a steal at just under $1000 per square foot with only a half mile walk to the beach. It will probably be worth $4.8 million in 4 years according to several folks contention that prices will continue to rise 20% per year. Go for it! :clap_1:
Beach Crab
Another interesting thread from the past with a few predicting the crash and everyone else piling on "insults" to the canaries in a coal mine.
Beach Fanatic
Another interesting thread from the past with a few predicting the crash and everyone else piling on "insults" to the canaries in a coal mine.
Some are canaries and some are buzzards. Millions were made between the time a couple of people around here started twittering and the time values started falling.
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