By Tracy Hauser
Cobalt Realty Group
As 2018 gets rolling along, some people are wondering how the new tax codes are going to affect them, especially when it comes to real estate. One of the new tax codes reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after Dec. 14, 2017, but current loans up to $1 million are grandfathered.
The inventory in the Canyon as of early January is low, with only 12 homes currently listed, ranging in price from $650,000 up to $2,998,850. There are 5 homes in escrow as of early January, ranging in price from a short sale at $685,000 up to a semi-custom home with guesthouse and 15-car garage at $1,695,000. Over the last six months, 21 homes have closed escrow ranging in price from $675,000 up to $1,425,000, with the average days on the market being 147.
Below are comments from an economist weighing in on the upcoming year, in relationship to the new tax codes. Low inventory is still a huge factor in our local market and will continue to be for some time. Calculated Risk’s Bill McBride weighed in on the subject. Here are some highlights:
The impact of reducing the MID from a maximum of $1 million in mortgage debt to $750,000 in mortgage debt will have very little impact on the housing market.
State and local taxes (SALT) will have an impact on housing in some areas. Some people might choose to live in one state over another (if they have a choice) based on taxation. This could impact demand in certain states – especially for the middle and upper-middle class homeowners.
The corporate tax cuts (and other tax cuts) will mostly benefit the wealthy, and this will be a positive for high-end real estate.
There will be some negative impact based on SALT, but overall, the impact of these policy changes on housing will be minimal.