From: hamachi@adobe.com (Gordon Hamachi)
Subject: Real Estate News Summary, Part 97
Organization: Adobe Systems Incorporated
Distribution: usa
Date: Fri, 10 Apr 1992 23:04:32 GMT

Real Estate News Summary, Part 97, February 8 to February 16, 1992

756. A close look at the President's State of the Union message reveals far
     less real estate relief than the rhetoric suggested.  For home owners the
     capital gains tax cut from 28% down to 15.4% is more than offset by
     depreciation recapture rules, which tax depreciated gains as ordinary
     income.  The bite will be even deeper if congress pushes the top tax
     bracket to 35%.  And those first-time home buyers who make penalty-free
     IRA withdrawals would still have to pay regular federal and state income
     taxes on their withdrawals. [San Jose Mercury News]

757. President Bush's proposed a tax credit for first-time home buyers would
     help 166,000 Californians this year, says the California Association of
     Realtors.  With more people buying homes, a ripple effect would allow more
     homebuilding and more purchases of furnishings.  A Los Altos realtor said
     2/3 of her clients would die to have the $5,000 cash. [Times Tribune]

758. Conventional wisdom has been that buying a home is a much better economic
     decision than renting.  But, depending on how long you stay in a house,
     that may not be true in the 1990s.  You don't need a calculator to know
     that those who bought at the peak of the housing market in 1989 have seen
     their property values depreciate 10%, 20% and even 30%.  Nevertheless,
     buying remains a better deal than renting if you plan to stay in one place
     5 to 7 years, says a Phoenix real estate broker.  [Gannett]

759. President Bush's real estate tax incentives will make buying a home easier
     but more expensive, according to a panel of housing industry experts.
     Affordable housing is in short supply in most of the country, so any plan
     to stimulate sales is bound to force prices up and undo any benefit the
     plan might otherwise offer buyers.  [Gannett]

760. Sales of homes in the Bay Area rose 8.5% last year for the first rise
     since 1988, as slumping prices and lower mortgage rates pulled buyers into
     the market.  The median price in the region declined 1.0%.  Statewide,
     existing single-family home sales dropped 6.2% while the median price rose
     3.6%.  Because inflation in the state was 4.2% for the year, real prices
     were down 0.6%.  Nationwide, the median price rose 5% while sales were
     flat. [San Francisco Chronicle]

761. Look for housing to bolster the economy's climb from lethargy.  Riding the
     momentum of faily weak prices and low mortgage rates, housing starts rose
     2% last month to a 1.13 million-unit annual rate. [Wall Street Journal]

762. With a major tax bill taking shape, realty brokers, and home builders say
     growing numbers of clients are postponing purchases and sales until they
     see what Congress produces.  There's plenty to be cautious about.  By
     closing before some arbitrary, yet-to-be-announced date, buyers could
     indeed miss eligibility for a $5,000 tax credit.  The president's original
     bill is virtually guaranteed to go down to defeat.  Indeed, the whole tax
     cut process could blow up. [San Jose Mercury News]

763. About 1/3 of all homes offered for sale never sell, usually due to
     overpricing.  Price has replaced location as the most important thing
     people look for.  Buyers don't care how much you paid for your house or
     how much you spent improving it.  Nor do they care how much money you need
     to buy your next home. [San Francisco Examiner]
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