The real estate market is known to take off in the spring, however recent reports are showing different statistics this year. Sales of new single-family homes are declining by 7.6 percent while sales of existing single-family homes fell by 4.6 percent. What is causing the decline? Housing experts are pointing the finger at the new tax laws brought on recently by the republican party. A new report from the Federal Reserve Bank shows that new tax laws capping the amount of deductions a person can right off on their home, has slowed down real estate buying. But what does this mean for you and how can you still take advantage of this real estate market?
- This is mostly affecting the luxury market. The fed report shows that the tax laws on the $10,000 cap on deductions for property taxes as well as maximum loan amount allows to be written off of $750,000 has negatively affected sales volume. What we are seeing is property for sales over 1 million dollars sitting in most markets. Prices are stagnant so if you are actually looking in this market and don’t care about the write off then there is value due to sellers getting impatient and waiting.
- It has made the rest of the market very competitive. If you are a buyer for a home under $750,000 you are still realizing a very competitive atmosphere. For a combination of reasons, this is what most buyers can afford and the new generation of buyers is much more savvy and are ok with having a smaller home with less maintenance.
- Low tax cities are thriving. If you examine the markets in Tennessee, Texas and Florida most of their cities real estate is booming. The lack of state taxes as well as buyers desire to live in a city atmosphere without the high cost have pushed these markets over the top.
Are you still thinking of becoming a homeowner despite the tax laws but are not sure of how much you can afford? Check out Ralph’s video here with the next steps to find out how much you qualify for.