To all the agents in the house,
I received an array of answers over the Memorial Day weekend to my question of what the federal government can do to boost home inventory. There were two big takeaways:
*Agents are passionate in their dislike of the capital gains tax.
Here, OpenHouse readers are broadly aligned with the National Association of Realtors, which opposes the Joe Biden administration's proposal to end the "1031 exchange" provision. The policy lets you defer taxes on a real estate sale if you put the money into a new real estate purchase, though there are quite a few rules and conditions.
When many agents think of the capital gains tax in real estate, they don't think of a corporate asset manager like Blackstone or Colony Capital, but a solitary homeowner on the fence about moving.
"From my perspective, sellers need to be incentivized to sell their homes," said one Southern California real estate agent. "Eliminate the capital gains tax temporarily."
"Instead of a first-time homebuyer's tax credit, which will further fuel buyers," the agent added. "They need to target sellers."
Skepticism about the homebuyer tax credit leads to the next big take away...
*Agents are cool to the Biden administration's housing proposals.
The Biden administration wants hundreds of billions dollars put toward housing in possible infrastructure legislation. But agents are concerned the proposals are not targeted or creative.
"Any time the government goes into building, the cost overruns are ridiculous," lamented one Northwest Indiana real estate agent.
The agent was one of a handful of respondents who wanted the government to focus on smaller homes.
"Give municipalities money to knock down some of these blighted homes like in Gary, Indiana and put up modular homes," the agent suggested.
A couple of respondents have also grown frustrated with foreclosure moratoria.
"There are over three million people behind on their mortgages right now," said one Phoenix-based broker. "Granted, many people have been out of work. But if the free market had been able to function, many of those people would have been putting their houses on the market, easing the inventory problem."
Are there agents out there supportive of the Biden administration's plans that I'm underrepresenting here? Or, is the consensus simply that less is more from the federal government? Please email me anonymously at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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