housing markets good for another 2 years :-)

The fall of 2007 is it, so try to sell your home anytime between now and but
preferably closer to that time for maximum profit. At that time 20 years
after the '87 market crash should be another crash or dip in the markets and
housing market. (don't buy the dip at that time however)

In the mean time enjoy:-)

http://www.federalreserve.gov/fomc/fundsrate.htm

http://biz.yahoo.com/bizwk/050726/nf200507264208_db013.html

"BusinessWeek Online
A Housing Boom Built on Folly
Tuesday July 26, 8:13 am ET
By Christopher Farrell


It seems that everyone from Wall Street to Main Street to Capitol Hill is
watching the biggest housing-market boom in history with awe and dread. Awe
because trillions of dollars in new wealth has been created ($5 trillion
since 1996) and the home-ownership rate has reached a record 69% of U.S.
households. Dread because the boom is attracting so much speculative
investing that a growing number of market watchers fear that a bust is
inevitable and will end in economic catastrophe.


What accounts for the housing boom? Economists have cited a number of
fundamental factors, including low interest rates, favorable demographics,
and restrictions on development. But the unappreciated force that may have
infected a strong housing market with home-buying mania is bad tax policy.
Specifically, I mean the Taxpayer Relief Act of 1997, signed by President
Clinton.

Under a set of easily met limitations -- mainly that a home has been a
primary residence for two out of the past five years -- a family can exempt
the first $500,000 in profit on the sale of the home from capital-gains
taxes. The comparable figure for a single filer is $250,000.

MONEY PIT. In sharp contrast, capital gains on stocks and bonds carry a 15%
levy (the capital gains tax rate had been 20% until the tax law change of
2003.). The powerful lure of tax-free profit is one reason that home prices
have risen at a nearly 7% annual rate, vs. about 4% for the stock market
since 1997. Sell a home with a $500,000 profit and owe Uncle Sam nothing.
But realize a $500,000 gain on Nextbreakthroughtechnology.com and the
federal government takes 15%. That's the kind of math most people can figure
out.

The issue goes way beyond tax fairness. A growing number of economists are
deeply concerned that residential real estate is absorbing far too many
economic resources. Money is pouring into concrete foundations rather than
high-tech innovation. "Residential investment accounted for 35% of private
investment in the past year, a level not seen since the early 1970s," notes
Martin Barnes, the perceptive financial-market observer at Bank Credit
Analyst.

"We're overinvesting in housing as a nation," says Mark Zandi, chief
economist at economic-consulting firm Economy.com. And we have the 1997
tax-law change to thank, because that created much of the economic incentive
to buy, flip, and buy again every two years.

UNBALANCED CODE. As much as possible, the tax code shouldn't bias investment
decisions. As it is, the tax code is too heavily weighted in favor of
housing. The Urban Institute calculates that the government provides about
$147 billion in subsidies to homeowners, including the mortgage-interest
deduction and capital gains exemption.

"The most politically successful segment in society are homeowners,
builders, and realtors," says William Ahearn of the Washington, D.C.-based
Tax Foundation. "The tax code is more slanted toward that group's favor than
any other group."

Sure, calls by columnists for Congress to treat the home like any other
investment typically flounder. The home-mortgage deduction is sacrosanct on
Capital Hill, regardless of how many tax economists testify against it every
year.

But the capital-gains law is different. It's only eight years old. Action
ought to be taken before this bit of policy becomes as enmeshed as the tax
break for mortgage interest. Besides, no policymaker is really happy with
the froth in the real estate market.

STOCK SHIFT. Congress could level the investment playing field by treating
capital gains on real estate, stocks, bonds, and other assets the same. I
say levy the same 15% rate on all capital gains -- regardless of how they're
realized.

Doing so would also reduce the incentive for speculative investment in real
estate and remove some disincentive to investing in the stock market. My
guess is that investors would shift more of their money into Corporate
America, especially innovative companies that create the wealth of the
future.

What's more, in an era of federal red ink as far as the eye can see, the
revenue from home sales would help restore some fiscal sanity in Washington.
People can be pretty smart with their money when given the chance. I say
give them that chance.

THE NEXT BILL GATES. I realize that economists with a more supply-side
perspective might prefer that capital gains be treated the same way that
ones realized from housing are. But giving couples a break on the first
$500,000 in profit -- and singles a break on the first $250,000 -- is hardly
a laudable strategy in an era of spiraling budget deficits.

Owning a home may be synonymous with the American dream. But so is finding
the next Microsoft (NasdaqNM:MSFT - News).

----------------------------------------------------------------------------
--

http://www.bloomberg.com/apps/news?pid=10000088&sid=aYtusYv.2e7I&refer=cultu
re

"Gossipy Guide to `Mass Hysteria' Over Manhattan Real Estate

(The opinions expressed do not necessarily reflect those of
Bloomberg.)

By Jeffrey Tannenbaum

July 26 (Bloomberg) -- The Ansonia, a landmark beaux-arts residence on
Manhattan's Upper West Side, was once home to a swingers' sex club called
Plato's Retreat. Building workers poked a hole in a basement wall and
charged deliverymen $2 a peek.

That juicy anecdote comes from Steven Gaines's breezy ``The Sky's the
Limit: Passion and Property in Manhattan'' (Little Brown, 273 pages,
$26.95), a voyeur's guide for those with a fetish about high-priced real
estate in America's biggest city.

Gaines likens the ``mass hysteria'' over Manhattan apartments, condos
and co-ops in the 1990s to the tulip mania in Holland in the 17th century.
Tulips, though, never sold for $4,100 a square foot, which is the price
investor Jack Silver of Siar Capital paid last year for a $25.5 million
duplex in the Time Warner Center.

Don't look to Gaines for serious economic analysis. His forte is
color, catchy phrases and gossip, such as details about fashion designer
Donna Karan's obsessive renovation of the San Remo apartment she subletted.
(Karan converted it into a ``Zen landscape'' with ``fountains on the wall
illuminated by dim pools of light,'' he writes.)

Gaines, a contributing editor at New York magazine who previously
wrote about the super-rich world of Long Island's Hamptons in ``Philistines
at the Hedgrerow,'' calls star apartment broker Dolly Lenz ``a combination
Babe Ruth and Jack the Ripper'' for her sales prowess and competitive zeal.
He chronicles the intense rivalry between Lenz and a young competitor named
Michael Shvo, who would juggle 150 exclusive listings at a time.

`Good Buildings'

Parts of the book are akin to a guided walking tour of Manhattan
neighborhoods, especially those on the East Side where, historically, many
of the richest and snootiest have clustered.

In 1985, writer Tom Wolfe listed the 42 ``Good Buildings'' suitable
for Social Register types: none were on the West Side. Gaines reprints the
list and delivers the dish on some of the entries, especially the co-op
buildings that are jointly owned by residents and run like exclusive social
clubs.

Gaines recounts the story of millionaire J. Shelby Bryan, then head of
ICG Communications Inc., who once sought to live at the prestigious One
Sutton Place South. Longtime resident Betty Sherrill warned him that while
residents could throw parties, there was a ban on political fund raising.
When Bryan asked how she'd know the difference between a regular party and a
fund raiser, she deemed him ``fresh'' and had him banned from the building.

Toscanini, Peters

We also learn about William Earl Dodge Stokes, the litigious builder
of the Ansonia, a luxury hotel turned condominium whose guests and residents
have included Ruth, Arturo Toscanini and Roberta Peters. According to
Gaines, Stokes was a notorious roué who sued almost everybody he ever dealt
with -- ``and that was the gentle side of his personality.''

At times, Gaines is a bit careless or scrimps on perspective. The
author calls New York ``the only city in the world where so much real estate
is held in private hands,'' without explaining who owns the buildings in
more populous cities such as Mumbai or Sao Paulo. He also refers to a
``Forbes 40'' list of the richest Americans, evidently a typo for Forbes
400.

The book is too scattershot to read at one sitting, but it's easily
digestible in bits. As Oscar Wilde once said, ``Though one could dine in New
York, one could not dwell there.''

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