Projects and investor/developer over thirty-five years range from a 20-unit infill subdivision in Sacramento, CA to a major hotel/casino in Reno, NV. In September 2009, I launched Terradigm Real Estate Consultancy, a real estate brokerage working with special clients using a fee-based compensation model.
The rest of the tragedy befalling high end home owners is that with the lack of a market for their homes, short sales and other loss mitigation options to forestall foreclosure are not available.
I would also recommend Niall Ferguson's The Ascent of Money for the same reasons.
Extension of the tax credit takes us into dangerous ground. I posted the follwing on my blog at www.terradigmreaalestate.com on Oct. 9 An Immodest Proposal For reasons already stated, I have grave reservations about the $8,000 tax credit. It may have been an okay idea to jumpstart things, but we’re past that. Danger lurks. Twenty percent of FHA loans insured last year face problems, according to the FHA Commissioner. Ginnie Mae may be facing a federal bailout. But if we’re going to do it anyway, let’s work to make some meaningful changes. First, let’s not have a one-size-fits-all. The credit should be a staggered amount from, say, $5,000 to $15,000, depending on the price of the house. Second, the credit should be available to anyone—not just first-time buyers. Third, it should only apply to short sale or lender-owned properties that will close escrow in sixty days or less. Fourth, buyers should have to contribute a down payment of not less than five percent, escalating to ten percent over the life of the credit. And they must stay in the home for at least three years. The credit ought not be a vehicle for government-sponsored flipping. Fifth, the capital gains tax rate for purchases of REO properties should be lowered to something approaching zero if the property is held for five years. States should also consider this proposal. Sixth, to help pay for all this, a federal transfer tax of something around .0125% should be levied on all home purchases where buyers are taking advantage of the tax credit. This may be less generous than what’s there now, but it’s still a pretty good deal, better than anything most people have ever received. It will help eliminate the two-tiered market (see yesterday’s blog). It will mitigate taxpayer risk from backing the swelling Ginnie Mae debt. It will encourage investment, and it will absorb distressed and excess inventory.
