By Peter J Reilly, Contributor
Real estate pro status is becoming the impossible dream of taxpayers throughout the nation. The Tax Court decision in the case of Jesse and Patricia Bugarin is a real frustrating example, because I can’t help but think that if I were in their corner and they listened to me they would have won. …read more
Source: FULL ARTICLE at Forbes Latest
By Robert Schmansky, Contributor
Real estate is an important part of a portfolio; it can provide diversification against stock market volatility, and inflation adjusted income and growth. …read more
Source: FULL ARTICLE at Forbes Latest
Real change in America is possible, but only if we stop tinkering at the margins. Jal Mehta In April 1983—exactly thirty years ago—the famous report “A Nation at Risk,” warned that American education was a “rising tide of mediocrity.” Since then, despite a tidal wave of reforms—more money, more standards, more testing, more technology, more affirmative action, more charter schools, more teacher-certification, more test-based accountability and more big federal programs (No Child Left Behind and Race to the Top), American K-12 education remains stubbornly mediocre.
Real estate is back! Just look at the homebuilders like Ryland (NYSE:RYL) and KB Home (NYSE:KBH). They have certainly posted standout returns for investors over the past year.
Source: FULL ARTICLE at Forbes Latest
By Robert Passikoff, Contributor Real fishermen have a saying: “a bad day of fishing is better than a good day at the office,” but perhaps not at McDonald’s. Not this month, anyway. It turns out that Fish McBites – offered in three different sizes and a new Happy Meal – didn’t lure enough customers into the chain to help U.S. sales last month. …read more
Source: FULL ARTICLE at Forbes Latest
By Karl Smith, Contributor Real life is being insanely intrusive but I couldn’t go much longer without saying anything. Housing Inventory There is lots of talk about whether we have hit the bottom in inventories. Bill McBride seems to have gone from fairly certain we had to leaning towards no. My seasonal adjustment (hand tuned) suggested that the rate of inventory decline had not changed significantly in the last two years or so and that there was no particular reason to think it was changing right now. Eventually, it has to change because inventory is a countable quantity and hence bound above zero. The question is how and why will it change. The typical answer is increases in supply or decreases in demand. Note, however, that supply must mean vacant homes being listed for sale or new homes being built. Underwater home owners “waiting for a better market” cannot increase the actual supply of homes when they go to sell, because presumably they will be moving into some other home. They can reduce demand if they move in with relatives because then they will contribute to a decrease in the total number of households. So, with few vacant homes and few new homes under construction we would expect this inventory decline to be chocked off by a decline in demand. This usually occurs because rising prices decrease buyer interest. Prices and Housing Demand Housing demand is strange, however, because the total demand for houses is not solely or even primarily price rationed, in the way most goods and services are. Total house demand is largely credit rationed. That is, what stops a family from buying a house, at all, is often that they could not qualify for a loan, not that they were unwilling to pay market prices. Thus for housing demand to be slowed, the total flow of mortgage credit has to be constraining. Sorry, for that odd turn of phrase but stating this is a little tricky because the flow of mortgage doesn’t have to decline or even slow. It simply has to increase (or decrease) at a rate which is less than the counterfactual increase in total home sales minus total home equity infusion. Any in case the point is that banks have to stop giving people loans. Loan Supply Loan supply is determined by many things, but two major factors are the collateral value of homes and the income prospects of borrowers. As housing prices rise the collateral value of homes increases. As new home construction increases, the demand for unskilled labor increases. Both of these factors will tend to increase loan supply. In addition, mortgage equity withdrawal tends to increase as housing prices increase. This increases consumption and with it total demand in the economy. This increases the incomes of potential borrowers. So, increasing housing prices can have a positive impact on loan supply. Indeed, right now that is likely to be the case. Housing Prices Total housing demand is not price rationed in the way most goods are. …read more
Source: FULL ARTICLE at Forbes Latest
