Will Home Values Fall in 2018?

Will Home Values Fall in 2018?

Published by: Chicago Agent Magazine (with summary comments by Christopher Tenggren of RE/MAX All Pro – St. Charles, IL – HomesInTheFoxValley.com), February 12, 2018

The National Association of REALTORS® projects a 2.1 percent decline in high-end home values this year, a drop much less significant than the “drastic” dip it had originally expected. That relatively small decrease should mean that homebuyer interest will continue largely unabated.

“If taxes are going to drive you out of that market, you shouldn’t be buying in that market anyway,” says Leslie Struthers, senior loan officer with Guaranteed Rate. “For tax bills that are $10,000, $15,000 or $20,000, it’s not going to change the world. If it does, then buy less and buy in a price range that’s actually responsible for your future.”

Struthers works in the high-end market, specifically with homes that cost from $450,000 to $1.5 million.

“You can’t let the tax tail wag the financial investment dog,” she says. “People who have means continue to spend. That they lose a tax deduction is not going to waver on anything. Buyers buy because they want to invest their money intelligently and to earn appreciation on property. Buyers buy because they want a home, a place that’s theirs.”

Struthers says tax reform encourages investors to enter into the market and bring more money into it, because they can still write off their interest and taxes against their income.

“They’re not dealing with the changes that homeowners are now managing,” she says.

Realistically, tax reform does make luxury homes less appealing. Struthers has noticed a lot of people moving out of state and relocating to Colorado and Florida. “A lot of high-end people don’t want to pay anymore. They want to retire and get rid of big homes,” she says. “I don’t think that’s changed.” She says taxes shouldn’t take up more than 8 to 10 percent of the owner’s mortgage payment.

What tax reform amounts to is a change in finance, Struthers says. “For most people, they’re not going to avoid buying a home because Congress passed the tax bill. It’s for their kids. It’s for the school district. It’s for their future. So they passed the tax bill, and you lose some deductions. At the end of the day, people will always pay for what they want.”

Christopher’s Summary…

The National Association of REALTORS® (Government Affairs Staff & Volunteer Leadership) are still assessing and evaluating the outcome and impact of the legislation, as well as the members of the U.S. Congress, in order to see if the REALTORS® have many friends left when lobbying on behalf of our citizen’s property rights and the ability to realize the American Dream of Homeownership.  The full affect and impact of this legislation may not be completely understood for 3-5 (or even 10+) years after these changes are fully realized after the filing of our next several income tax year cycles, long after many of these Legislators are gone from office.

Fortunately for Americans, the N.A.R. Lobby efforts, Congress signed a deal to extend the Tax Relief from Debit Forgiveness and the Deductibility of Mortage Insurance Premiums that was not originally addressed in the “2017 Tax Cuts and Jobs Act” on 02/09/18!

Will Home Values Fall in 2018?

For the Full Article, visit: https://ChicagoAgentMagazine.com/2018/02/12/agents-can-help-clients-real-estate-taxes/

Visit Christopher Tenggren’s Blog again soon at: http://HomesInTheFoxValley.com/blog



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