Quote:
Originally posted by sgtclub
I am happy that the GOP lost the House. Less happy that it looks like they will lose the Senate too.
Also wondering what effect the sunset of the tax cuts, coupled with the ARMs that are coming up in the next few years (which, I understand, is a larger number than in the past few years) will have on the real estate market. Thoughts?
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1. Tax cut sunsets will have a general effect on economy, not just on real estate. But I would guess it will be subdued. It will mean that some people will accelerate gains to pay at lower rates. And some people may accelerate death in 2010. If everyone's smart, they won't bother with any changes now, because Bush would veto anything repealing them before 2010, and obviously he can't get them extended now . . . So the action will be in 2009, and who knows how the elections will turn out then. I could see the Senate swinging back to R, and of course the presidency could become D, or HRC.
2. On ARMs and real estate. It's already a problem, but I doubt it will send the foreclosure rate up greatly. Anyone whose ARM is coming up soon probably already has plenty of appreciation. And for the rest, the mortgage cos. will likely refi anyway, albeit at a higher rate. The real consequence will be on consumer spending, because mortgages will start soaking up a lot of free cash.
