Anyone who pays attention to Wall Street or the housing market can see that things are looking up. Real estate is once again looking so good that it might even be a better investment than stocks.
There has been a lot of debate and speculation around how the new tax law will impact real estate. Should you expect prices to go up? Is this a good time to buy or sell?
Keep on reading to learn more.
When looking at how the new tax bill might negatively impact housing appreciation, the key variable that everyone is in agreement on seems to be those areas of the country with higher priced homes. This is because the new tax law caps the deductibility of property taxes, mortgage interest, as well as the exclusion of paying capital gains on the sale of a primary residence.
Areas like major Midwestern cities, New York, and California will be hit the hardest by the new tax law because of their higher incomes, big mortgages, and of course their big property tax bills.
As the new tax law causes prices to rise, many people will be forced to reconsider buying, as well as how much they are willing to pay. This affects both potential buyers and sellers of higher-priced homes.
One question that title agents and real estate professionals are having to address, is what kind of impact the new tax law will have on homeowners’ willingness to sell. It’s obviously too early to say for sure with any kind of certainty, but the majority of opinions within the industry aren’t convinced that homeowners will be swayed not to sell.
Another question that industry experts have to consider is how will the new tax law will impact housing demand. While the tax law could possibly raise the net costs of buying a home, many in the industry believe the overall change might actually have a positive impact on the housing market due to tax cuts, and the fact that most buyers tend to stretch their budgets when looking to buy a new home.
And yet, with a potential supply of higher-priced homes on the market, the changes in deduction allowances could have a cooling effect on those who might have been looking to buy.
What is the Bottom Line?
Looking around, it seems that most real estate professionals working on the front lines each and every day aren’t convinced that the new tax code will have any kind of significant negative impact on the housing market.
Real estate agents and title agents deal more closely with the issues of supply and demand that anyone, and these professionals realize that consumers take more into consideration than just the tax consequences of buying or selling a home.
Contact us for more details about buying or selling a home. We’ll be glad to help you in any situation.
Wonica Realtors & Appraisers are Staten Island’s #1 independent full-service real estate firm, serving the needs of the community for over 30 years. Whether you’re buying, selling, renting or relocating, our staff of highly trained professionals will provide quality realty services with personal attention to your individual real estate needs.