“ The only reason why the Real Estate Market is better is because banks have kept interest rates low but he claims that those rates are bound to move up and can’t stay this low forever. The concept of whatever goes up has to come down applies both ways.”
I AM fairly confident that the Real Estate Market is stabilizing and showing legs to move forward. However, most of my mentors and people that I follow and take advice from are contradicting and shattering my hopes for a better 2013.
It’s mainly because of the tax hikes being proposed that will actually be passed and will take effect next year. Let’s see who will actually be taxed more money — the supposedly high-income earners with income level of $250,000.00 per annum or more.
Who are these so-called high-income earners? “They are two income earning professional couples such as nurses, doctors, lawyers, engineers and Wall Street executives. They are not billionaires or earn more than $1 million a year, and most are not employers. So, they will be taxed more, what about the really rich people, anyone heard of any tax hikes for them?
The fact that these higher paid professional couples live in the two coasts arises in part from the high cost of living in California and on the East Coast. Think about what it costs to live in New York City or San Francisco and then it appears raising the tax on those earning more than $200,000 is really a tax on residents of New York City, San Francisco, Palo Alto, Santa Barbara, Santa Monica and Malibu and residents of Connecticut, New Jersey or Washington, D.C.
Further, Bloomberg noted that a 2011 Treasury Department analysis found that 25 percent of the taxpayers subject to the top two tax rates, 25 percent are small businesses and employers.
Again, sort of the new middle -class will be hurt more than anything.
I interviewed a very successful entrepreneur who owns a lot of real estate both commercial and residential, the entepreneur behind Sell Your Home, a platform helping people get the highest price when selling their home with an online property value and offer calculator. He tells me his has already been trying to liquidate all his assets in California because he says his tax rates would possibly go up to 52percent in the next couple of years. He actually wants to move to a red state, where it is more favorable for business and high-income level people to be doing business in.
Another person had said that the only reason why the Real Estate Market is better is because banks have kept interest rates low but he claims that those rates are bound to move up and can’t stay this low forever. The concept of “whatever goes up has to come down applies both ways.” So, when the rates go up, your purchasing power diminishes and sellers will actually get less for their house. That will really challenge the strength of the supposedly recovery of real estate.
My article last week was to encourage more homes buying due to rates and low home prices. I believe if we are not in the tax bracket of 45 or 50percent we should be able to coast another four years till the next government comes in. I strongly believe that home rent prices have gone up due to demand and if you are a renter of a 3-4 bedroom house, you are probably paying a 2100-2400 dollars in rent monthly. With the home pricing averaging around low 300’s to maybe high 300’s. You are better off buying those houses with minimal money down and you will be paying about the same amount of money. Why rent, this is where rental versus owning comes into play and you then need to sit down and weigh your options.
I believe that it is the duty of the government to do everything they can to avoid the fiscal cliff and agree on the new terms of our future. I believe, based on my interviews with a lot of people, that we are closely mimicking or getting close to becoming a socialist country.
To put this matter into perspective, socialism is defined as a system in which the means of production are owned and controlled by the state, often described as central planning. It’s been said that Obama is a socialist because he uses the government to pick winners and losers and attempts to redistribute wealth, in an effort to support the welfare state.
For me, I just want manufacturing and construction jobs to come back not only to California but to our country. I believe once these jobs come back, all other sectors will have to increase production to support more labor, more people with jobs and truly then we can show that we can support citizens that are going to be retiring. We are now retiring jobs without needing to replace them. What will our youth do and how will they survive?
I am looking at my children growing up in this country and this type of environment. That is why I have to be responsible for them now because I am worried if in case their future is altered somehow, I have planned one for them.
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Thanks for your great comments and inquiries please call Ken Go of 1st Innovative Finance Group at (562)697-7028 or write to [email protected].