A recent article from Inman News discusses these challenges, which include the following:

1) The Fiscal Cliff
According to the Budget Control Act of 2011, a series of tax increases and spending will go into effect unless U.S. lawmakers come up with an alternative plan to reduce the federal deficit by $1.2 trillion. This is known as the “fiscal cliff”.

Should Congress fail to reach an agreement and avoid the fiscal cliff, our country could plunge into another recession which would cause home values, currently at a bottom of 31 percent below their mid-2006 peak, to tumble to a record low of 40 percent below peak.

2) The Mortgage Interest Deduction (MID)
One of the proposed solutions to avoid falling off the fiscal cliff is to revamp the mortgage interest deduction. Many experts say the MID cannot exist in its present form, as it currently costs the government around $90 billion per year. Other organizations (like the NAR) claim that any changes to the MID could depreciate home prices by up to 15 percent. These organizations are promising to “remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

3) Mortgage Debt Forgiveness
Another homeowner tax break may be in negotiations as a result of the Mortgage Relief Act of 2007 expiring at the end of this year. If the debt relief law lapses, homeowners would have less of an incentive to pursue short sales because forgiven mortgage debt could be considered taxable income.

Click here to read the full story.

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According to the survey, 38% of the home sellers asked said they plan to hold off on selling their house for over a year, while only 25% of the active sellers are planning to sell now. 36% of respondents plan on waiting 3 to 12 months before listing their home.

“The would-be sellers we surveyed have made it clear that inventory is not going to meaningfully increase any time in 2012, which will limit sales volume gains-and the lift that real estate delivers to the economy this year,” said Redfin CEO Glenn Kelman. “We believe the main problem is not, as conventional wisdom would have it, that people can’t sell because they’re underwater on their mortgage. The problem with sales volume is that most home-owners just don’t want to sell.”

A majority of the respondents said they view the current real estate market as being favorable to Buyers because of recent trends and statistics showing low home prices. These same homeowners expressed an overall optimism for the future increase of home prices, and therefore believe they can get more money out of their home by waiting a year or more to sell.

As a result of an increase in rental prices, many home owners (46%) are considering renting their homes instead of selling. Redfin claims that this is actually driving down housing inventory as many homeowners are buying new houses and renting their current ones.

Also according to the survey, the biggest concerns for sellers this year was the economy (49%), foreclosures (34%), financing trouble (30%), and the anticipation for prices to rise (28%).

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