Top 10 Real Estate Predictions for 2009

Tax Breaks for Home Selling Will be Revised

Congress will consider eliminating the tax exclusion on home selling profits, and the tax break for home selling may disappear.

© Big Stock Photo

I predict that the government will try to change the home sale tax exclusion in 2009, disallowing the free money that up to now sellers have been able to pull out of their homes upon resale. Congress needs cash to refill the treasury depleted by bailouts and continuing military action.

Sellers should consult a CPA to determine the best way to avoid taxes upon resale.

• Little or No Appreciation as Market Bottoms
• Housing Inventory Will Fall
• Bank Will Rent Out REOs
• Buyers Will Compete in Multiple-Offer Situations
• Real Estate Competition Will Shrink
• Sellers Will Shun Loan Modification Programs in Favor of Short Sales
• Banks Will Pursue Foreclosure Options Over Loan Modifications
• Mortgage Interest Rates Will Spike
• Rental Rates Will Increase as Demand Increases
• Tax Breaks for Home Selling Will be Revised