The recession has caused two dramatic shifts in ownership; more renters and smaller homes for the less fortunate.    While the high-end market has seen an increase in new homes being constructed, the medium size of multi-family units built for rental has declined to 990sqft according to the US Census Bureau.  This data supports the trend in consumer spending among high-end households.  On the other end of the spectrum, the influx of foreclosure victims is causing a growing share of the population to enter the rental market.  It appears as though the size of the American dream home for the wealthy is growing larger and the living quarters for the less fortunate are shrinking.  Only time will tell if this trend will continue.

Seller Closing Argument #15: The tax forgiveness Window Close

An important consideration for all distressed homeowners considering a short sale is how debt forgiveness by the bank is treated by the IRS.  Under the Mortgage Debt Forgiveness Act of 2007, the IRS is not charging income tax on mortgage debt forgiveness.  The mortgage forgiveness is also called Cancellation of Debt Income, or CODI.  This provision is set to expire at the end of 2012.  This means that any short sale that is closed by this date will incur no income tax liability.  Although it appears as though this date is well into the future, if you consider that the short sale process can take months to complete, all sellers considering a short sale versus a foreclosure should avoid potential income tax liability by completing a short sale now.  They have nothing to lose and everything to gain. What can be better than someone that is tens-of-thousands of dollars under water on their homes and severely delinquent in mortgage payments to position themselves to have no mortgage liability and no income tax liability forgiveness of debt.

Buyer Closing Argument #15: Investors Have Set the Bottom Price Close

For those buyers that have been looking for the bottom of the market there may be bad news.  If they track recent price trends they are likely to find that the bottom has come and gone as prices increase.  This is due in large part to investors.  Investors believe that homes are so undervalued that they have become a sound investment; they have entered every market with cash purchases and quick closes. Unfortunately, that means primary buyers, or end users, must now offer higher prices to compete with investors.  Sitting on the fence is no longer an option. The best price and selection is rapidly becoming a thing of the past as more and more investors enter the real estate market.