The Housing Market (2021)

[murphysranch]

^^ it depends upon the property whether you're hit with long term or short term capital gains (land vs home vs occupied for two years or more...). Neal will be paying long term gains since he's had it soooo long. (if he even sells).

 

[Retired]

No capitol gains on your primary home. Has Neal been on vacation?

 

[Neal]

Reducing or Avoiding Capital Gains Tax on Home Sales

Capital gains taxes on real estate and property can be reduced or not assessed when you sell your home, up to certain tax limits, if you meet the requirements.

www.investopedia.com

Topic no. 701, Sale of your home | Internal Revenue Service

Topic No. 701 Sale of Your Home

www.irs.gov

Capital Gains Tax on Home Sales and Real Estate - NerdWallet

If you sell a house you didn’t live in for at least two years or that isn't your primary residence, capital gains tax on real estate may apply.

www.nerdwallet.com

 

[VTPete]

You are fortunate to have good options. This is an emotional decision in the end, if you're not so attached to your current house, and you enjoy spending a considerable % of time in your coach, then maybe it's a good time to cut it loose and do something fun elsewhere. It's not really efficient to keep a S&B if you're on the road 50%+ of the time anyway. Maybe purchase a new property with more flexibility, where you can rent the main house to cover the cost and has space to build a bitchin' RV garage with apartment for you to stay in. (RV Garage Plans & Motor Home Garages – The Garage Plan Shop).

Unless your pining for a new coach for emotional reasons, (like you've always wanted an Essex or London Aire or something) your current coach is probably your best bet.

 

[VTPete]

Reducing or Avoiding Capital Gains Tax on Home Sales

Capital gains taxes on real estate and property can be reduced or not assessed when you sell your home, up to certain tax limits, if you meet the requirements.

www.investopedia.com

Topic no. 701, Sale of your home | Internal Revenue Service

Topic No. 701 Sale of Your Home

www.irs.gov

Capital Gains Tax on Home Sales and Real Estate - NerdWallet

If you sell a house you didn’t live in for at least two years or that isn't your primary residence, capital gains tax on real estate may apply.

www.nerdwallet.com

There's a few strategies you can employ to manage your tax liability if you don't buy another residence in the first year.
UPREIT, 721 exchange, or 1031 into a REIT, a good tax guy can help.

 

[murphysranch]

I have rented out parts of my home to travelling medical professionals. They typically have three month stays, but are sometimes cut short and/or extended. It was great for me.

 

[FL-JOE]

So Neal, it looks like what I said originally about not paying capital gains on profits of $250,000 or less when selling your home (single) is still the case. I guess if you are going to show a profit of well over that then the argument for selling could go either way.

As far as storage. This has long been a tough question for all full time RVers. We pay around $130 a month for 10x20 climate controlled unit. There was family stuff and just a couple pieces of furniture that we couldn't part with. Now you have to use your head when you rent a 10x20 to assure maximum storage use. I put 5' heavy duty plastic stackable shelving down each side, then across the top I placed a 2x6x10, spacing them about 3' apart, creating a loft area for lighter stuff to go. Believe me when I tell you that every square inch of our rented space is taken!

But so far we have dished out over $5,400 for that storage. Probably by the time we come off the road full time we will have paid well over $12,000 to $15,000 in storage for items that are valued at about $5,000 total. But then again it is a drop in the bucket compared to maintaining a house that we would rarely if ever use.

As far as relocating to another state be very careful. My BIL retired from a company in Florida several years ago and they bought a home outside of Atlanta. He didn't have a clue how it would effect his personal income taxes. They are trying to get their money back out of that Georgia home and get back to Florida now. Housing prices and bubbles can go up and down, but generally a states tax liability never really changes. Be cautious my friend.

 

[Neal]

Great tips and advice which is why I posted my internal dilemma for others to help me sort out. It is good to know on the Capital Gains. However, with the RV which is a second home, are people paying CG's on it if they profit on the sale? (I'm accounting/tax illiterate by choice).

I would likely move to a place that would benefit buying my next coach such as FL. I'm also eying the MT/ID/WY area as I'm in the process of buying a backcountry airplane which is why I went to Yakima and why I'm headed back there now. With that said, FL is probably one of the least desirable to me. to be doing that kind of flying. High humidity, no terrain, poor visibility, bugs! So that weighs into my equation.

Can people claim residency on owned sites? For example if I bought a site at Pelican Lake RV Resort, could I use that for FL residency? I think FL has a 6 month max you can stay at a place like that, not sure it's enforced, but I think it's for residency reasons.

After this discussion and realizing how much I love my house and my coach, I likely will do nothing. The timing for financial gain though may push me to do something and sometimes that vulnerability or risk can be a good thing that pays off in the end. I'm comfortable where I am now but something super amazing could be ahead with change. I could use some change but this is a back and forth dilemma.

Thinking out loud...

 

[Retired]

We look at everything we own as just stuff.

If we are standing at he mailbox watching the house burn to the ground with everything in it, we are going to be thankful that we are alive.

If you came into our house, you would look around and think we have been robbed. we are minimalist and dont desire to own a bunch of stuff.

We had a small house built on a small lot in a really nice HOA. Low maintenance, easy to keep clean, easy landscape maintenance, perfect for us.

 

[AbdRahim]

Well. I was looking for a house in a warmer (not hot) place. I really would like a house with provision for the coach. First off I cannot find one that fits my needs, in an area of interest, that is not contingent as soon as I see the listing. People are offering cash and forgoing contingencies on houses they have not even seen. Offerings are way above asking price, so I am priced out of the market right now, it seems.

If you are not going to buy another house, now is the time to sell. Get rid of most of its contents as well. In 2-5 years the value of these overpriced houses are likely to drop significantly.

As for the coach, I would not sell, unless you are planning to be homeless for a few years. I am told people are already ordering 2022 models. And you will pay top dollar for the next coach, so not rally any net gain there. Plus think of all of the money you will put into the new coach, getting it to where this one is. Just my $0.02.

@JabberJaw: where did you find the port home? I have been looking for an affordable one.

 

[J&JD]

Great tips and advice which is why I posted my internal dilemma for others to help me sort out. It is good to know on the Capital Gains. However, with the RV which is a second home, are people paying CG's on it if they profit on the sale? (I'm accounting/tax illiterate by choice).

I would likely move to a place that would benefit buying my next coach such as FL. I'm also eying the MT/ID/WY area as I'm in the process of buying a backcountry airplane which is why I went to Yakima and why I'm headed back there now. With that said, FL is probably one of the least desirable to me. to be doing that kind of flying. High humidity, no terrain, poor visibility, bugs! So that weighs into my equation.

Can people claim residency on owned sites? For example if I bought a site at Pelican Lake RV Resort, could I use that for FL residency? I think FL has a 6 month max you can stay at a place like that, not sure it's enforced, but I think it's for residency reasons.

After this discussion and realizing how much I love my house and my coach, I likely will do nothing. The timing for financial gain though may push me to do something and sometimes that vulnerability or risk can be a good thing that pays off in the end. I'm comfortable where I am now but something super amazing could be ahead with change. I could use some change but this is a back and forth dilemma.

Thinking out loud...

What kind of aircraft is @Neal the bush pilot looking to purchase?

 

[Neal]

What kind of aircraft is @Neal the bush pilot looking to purchase?

Rubber band! (Carbon Cub)

 

[BGMAC]

Meals up and coming plane...

 

[John&Andrea]

I read this morning on Facebook friends in my area at home are seeing home sales with people offering 100K over asking. It makes me wonder if I should sell mine!!! I love my house but the area not so much but I have no clue where I'd want to live given a choice. This is part of the reason I have a RV, I'm out looking wondering where I would want to live someday other than where I am now. I don't know why the housing market is doing this, my hunch is one of two things: 1) The stock market has peaked and people want to take profits before an expected decline/collapse? 2) Expected interest rate rises, inflation, etc. so now is the time to capture loans? I don't know, I haven't searched for answers, I haven't googled it.

We all know the RV market has been on fire but we've attributed that to the pandemic. I face the same situation with my house in that this fall is an ideal time for me to sell my coach probably at the highest I could ever profit on this coach. I'm going to Newmar in September for the warranty reupholstering of the furniture and I'm having some other things done such as getting the carpet replaced since the furniture will be removed, saving on labor costs. After Newmar's work is done this would be an ideal time to sell the coach, it's also at that point in which most coaches sell, 4.2 years of age. But I love my coach, I've spent 3 years making it my own, the list of mods and additions is large but highlights being Summit Stainless, HWH Active Air, 1800W Solar with front A/C wired for solar, Victron web enabled system, Drainmaster gates with Sanicon all controlled from inside, LED lighting including underglow, under slides, and top side lighting both passenger and driver sides. Office setup, the list goes on. But the coach is PERFECT, perfect size, perfect running, everything is great (knock on wood). Why sell a coach that is perfect to you or do you do so simply for the financial timing of max profit opportunity?

So I'm faced with whether to capitalize on the housing market and also the RV market. Not a bad dilemma, most likely I'll sell neither but what is your opinion, what are you facing and how are you rationalizing the hot sellers market we're in now?

You can live where ever you want to.

 

[AuntieDodo]

Neal, as you know; we Sold the house in Rockville Va, to move to Florida. Two reasons, the tax advantages which Florida offers, and downsizing, but to an RV port home.
We caught the market at a pretty good time, mortgage rates at about the lowest I've ever seen them; so we actually took out a small mortgage to save some cash for travel, etc.
Regards selling, the market was trending upward, and we had several offers at $10K over asking price.

I would suggest looking into selling your Va. home, to take advantage of the exceptional prices, and then look at downsizing, maybe here in Florida (tax advantages) or another similar state.
Cash can be a motivator!

As for the RV market; I actually had a Dealer from Texas call (no idea where he got my info); but offered right at what I paid for my coach new! Now that's great, but no way am I selling my coach for a while. I say that to point out how "Hot" the market is at this time.
Since you have done so much to your coach, and it fits your needs, not sure that I would suggest selling & buying another, unless it is a "want to update" process for you. You invested so much time and effort to make it just like you want it. My advice.....keep it & enjoy it!

Then take all the money you make from selling in Virginia, and find a place that will make you happy; or like a lot of folks, "Full Time" & invest the rest!

Hope whatever decisions you make, will add to your happiness! Good Luck!

PS: Florida living is saving about $900-$1,000 a month vs. Virginia

This is my thoughts. If you don’t mind leaving your roots now is the time to cash in if it was in your near to future plans anyway.

We are in a position to make a boat load on our home right now, average sales are going from 100-150+ asking prices. However, we can’t find a lot anywhere near where we want to be without costing way too much then to build in addition.

The only way for it to work for us is to go full time for a bit until land in our desired areas open up. Some days I’m willing but other days I think we should just stay where we are as it is a great spot and if we left we likely wouldn’t be able to ever come back this way. It doesn’t help that this is my husbands families farm land and he has never lived anywhere else. The farm has been sold.

 

[Neal]

This is my thoughts. If you don’t mind leaving your roots now is the time to cash in if it was in your near to future plans anyway.

We are in a position to make a boat load on our home right now, average sales are going from 100-150+ asking prices. However, we can’t find a lot anywhere near where we want to be without costing way too much then to build in addition.

The only way for it to work for us is to go full time for a bit until land in our desired areas open up. Some days I’m willing but other days I think we should just stay where we are as it is a great spot and if we left we likely wouldn’t be able to ever come back this way. It doesn’t help that this is my husbands families farm land and he has never lived anywhere else. The farm has been sold.

I once heard real-estate cycles were 7 year cycles. It's hot now, what will it be in 1, 2, 5 years from now? Will it keep on the rise and inventory depletes and with the price of lumber isn't probably going to build that fast. I'm not ready to sell my house now although now is a perfect time to do so as I just had painting and other things done while away. But it could be an even better time 3 years from now, we just don't know. For now I'm holding and enjoying the house I love and I still don't know where I'd go next.

 

[AuntieDodo]

I once heard real-estate cycles were 7 year cycles. It's hot now, what will it be in 1, 2, 5 years from now? Will it keep on the rise and inventory depletes and with the price of lumber isn't probably going to build that fast. I'm not ready to sell my house now although now is a perfect time to do so as I just had painting and other things done while away. But it could be an even better time 3 years from now, we just don't know. For now I'm holding and enjoying the house I love and I still don't know where I'd go next.

This is exactly my thoughts too. We are in an area that the City is slowly stretching out to, so expectations are that our values will either stay where they are now or increase. We have a large Country lot 3 neighbors in view but nowhere near to us.

I was after my husband to buy a lot just before the craze and he wasn’t interested. The lot was 59k where there were quite a few available, they had also been up for sale for 10 years.. In a matter of two weeks last summer every one of them sold. There was one listed last week due to a tragedy happening in the family, it sold for 180.00. I actually told him at the time we should have bought 5 lots. He should have listened to me ?

We Canadians do not pay capital gains on our principal residence only investment properties so we wouldn’t have that to consider if we sold current home.

 

[sheridany]

The housing market in California is insane especially in the SF Bay Area. A house in Berkeley went for over $1MM (yes million) over the ask price. There’s nothing extraordinary about Berkeley other than it’s a college town and some decent views. Another house in another town had 122 offers and sold in 3 hours. Sheer insanity.

Redirect Notice

 

[Kevin D Pem]

black rock is buying up housing. They are doing this by bidding much over asking. This is not a housing market thing as much as a pension stabilization thing. If you think you will buy another house, think "you will not own anything, and you will be happy", I would not sell if I had one.

 

[murphysranch]

I'm in Santa Clara, CA helping hubs remodel my sis' dear departed Mother in Law's home. Apple Computer's new campus is four walking blocks away. This 1957 home, half is still original, is going to go for slightly over 2 million, for a 3/2 on an 8100 sq ft lot, after we're done here in a few weeks.

We are only doing internal remodeling - like expanding the master shower from a 3'x3' to a 48x48", installing can lights, 6 panel doors with new trim, all new baseboard, and LVP laminate through out. New toilets, mirrors, vanities, backsplash, and more. It all has to be off the shelf whatever is in stock, cus custom orders are months out.

Crazy times in Silicon Valley for sure!