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The Dirt on Capital Gains

Posted by John Hathorn on May 3, 2021
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President Biden is set to work on the next phase of his economic agenda — a sprawling collection of programs that would invest in infrastructure, education, carbon-reduction and working parents. These infrastructure proposals are likely to require trillions of dollars in new tax revenue aimed at large corporations and high-income individuals. While Economists on both sides of the aisle are pleading their cases for, and against, raising taxes, what I (and I assume you) want to know is how could this impact real estate markets?

Tough to tell at this moment, although some proposed laws could directly impact real estate investment. Maybe not as impactful on peoples’ primary homes.

Massive new capital gains taxes are of deep concern to me. Currently, long-term capital gains are taxed at preferential rates. The maximum rate is 20% compared to the top ordinary income rate of 37%. The Biden Tax Plan would leave this 20% rate in effect, but only on incomes up to $1,000,000. Once an individual has income more than this proposed cap, capital gains would be taxed as ordinary income – Biden’s new proposed 39.6% rate.

Let us say that someone who earned $2 million in 2018 paid 50% in total taxes. How will it impact them paying 53% in 2021 if they earned 2.2 million that year? In the end, most people focus more on what they net… until tax-day that is…

In the U.S. alone, the total value of owner-occupied real estate is roughly $32 trillion, nearly as much as the value of the entire U.S. stock market… but you can’t live in your stock portfolio.


DID YOU KNOW? More than 100 million people in the U.S. are fully vaccinated against Covid-19 (146 million with at least 1 vaccine), or nearly a third of the entire population! New Hampshire is over 60% vaccinated with at least one shot, Maine, Connecticut, Massachusetts, and Vermont are at least 55%! New COVID cases are down 17% in one week. Restaurant capacity is growing. Spring has SPRUNG!

DID YOU KNOW?  The hottest emerging real estate markets for 2021 are:

  1. Coeur d’Alene, Idaho
  2.  Austin-Round Rock, Texas
  3. Springfield, Ohio
  4. Billings, Mt.
  5. Spokane, Wa.
  6. Lafayette-West Lafayette, Ind.
  7. Reno, Nev.
  8. Concord, N.H.
  9. Manchester-Nashua, N.H.
  10. Santa Cruz-Watsonville, Calif. (

DID YOU KNOW?  Beijing has toppled New York City as the city with the most billionaires according to FORBES.

DID YOU KNOW? Moody’s Analytics estimates households worldwide had $5.4 trillion in pandemic-related savings at the end of the first quarter 2021. (Financial Times)

DID YOU KNOW? When we fail to adequately invest in our infrastructure, we all pay the price.

DID YOU KNOW? About 130 million Americans live in polluted air environments. Pollutants cost the US roughly 3% of GDP annually… about $600 billion. Clean air regulations have improved air quality dramatically: between 1970 and 2006,  the following reductions in annual pollution emissions:
* carbon monoxide emissions fell from 197 million tons to 89 million tons
* nitrogen oxide emissions fell from 27 million tons to 19 million tons
* sulfur dioxide emissions fell from 31 million tons to 15 million tons
* particulate emissions fell by 80%
* lead emissions fell by more than 98%
To check out the air quality in your area, click HERE.


In 90402 Real Estate news…

Five new listings, including FOUR Spanish charmers-

551 Lincoln Blvd– Listed for $4,795,000. Beautiful 1928 authentic Spanish which has been nicely updated while maintaining much of the original character and charm. Also includes a large guest house complete with kitchen. Last sold in 2016 for $3.250M.

702 14th Street– Listed for $3,495,000. Another authentic 1926 Spanish! This one is about half the size of 551 Lincoln but features a pool. Updated in 2000. It was last sold in 2004 for $2.5M.

728 12th Street– Listed for $5,995,000. The largest and arguably the most updated of these new Spanish offerings. Originally built in 1924, this home is nearly 5,000 sqft and also includes an impressive guest house above the 4-car garage. Last sold in 2017 for $5,375,000.

78 Ocean Way– Listed for $6,850,000. While the priciest of the Spanish offerings, this 1926 Spanish Colonial Revival is being sold for lot value. Ocean views from an 8,000+ sqft lot with pool.

491 Mesa Road– Re-Listed for 1,515,000. This came on the market at the beginning of the year for $1,680,000. Very unique case study house. This large price adjustment should make someone jump on it.

Four properties under contract, three of which were on the market for less than 2 weeks-

415 Mesa Road– Listed for $7,295,000.

588 Dryad Road– Listed for $2,049,000. Livable lot value, ready for updating or to build new. Current house is 1,400 sqft on a 5,063 foot lot.

2020 Georgina Avenue– Re-Listed for $12,595,000. Originally built in 1913 recently restored and updated- it is not plain. Nearly 18,000 sqft double lot. The house is just over 6000 sqft + guest house & pool. Was originally listed last year for $13,995,000.

473 Upper Mesa Road– Listed for $3,000,000. On the market for the first time in 60 years! Classic SM Canyon house. Lots of charm and character. 2,200+ square feet giving some tree house vibes.

Four new sales-

519 Stassi Lane I sold this house for $5,173,545. We were moments away from accepting a lease offer when the lucky buyer swooped in to purchase it instead!

428 Euclid Street– Sold for $7,125,000. Originally listed for $7,195,000.

522 9th Street– Sold for $5,150,000. Originally listed for $5,600,000.

555 14th Street- Sold for $4,700,000 a an off-market, pre-completion sale.  3,500 sq foot Spanish Revival, remodel with a large addition. We sold this as a build (finish) to suit a project in progress and can do the same for you!

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