Has the new tax code killed the real estate market in Alexandria Va 22302?
Let's take a closer look and see what the results have been so far on a National Level.
The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of the year, some experts felt that it could have a negative impact on the already very tight luxury housing market.
Capital Economics:
“The impact on expensive homes could be detrimental, with a limit on the MID raising taxes for those that itemize.”
Mark Zandi of Moody’s Analytics:
“The impact on house prices is much greater for higher-priced homes, especially in parts of the country where incomes are higher and there are thus a disproportionate number of itemizers, and where homeowners have big mortgages and property tax bills.”
The National Association of Realtors (NAR) predicted price declines in “high cost, higher tax areas” because of the tax changes. They forecasted a depreciation of 6.2% in New Jersey and 4.8% in Washington D.C. and New York.
But what has actually happened to luxury homes so far?
Here are a few metrics to consider before we write-off the luxury market:
- According to NAR’s latest Existing Home Sales Report, here is the percent change in sales from last year:
Homes sales between $500,000 – $750,000 are up 11.9%
Homes sales between $750,000 – $1M are up 16.8%
Homes sales over $1,000,000 are up 26.7%
- In a report from Trulia, it was revealed that searches for “premium” homes as a percentage of all searches increased from 38.4% in the fourth quarter of 2017 to 41.4% in the first quarter of 2018.
ALEXANDRIA VA HOMES FOR SALE NOW
According to an article from Bloomberg:
“Median home values nationally rose 8 percent in March compared with a year earlier, while neighborhoods of San Francisco and San Jose, California, have increased more than 25 percent.
Prices in affluent areas in Delaware and New York, such as the Hamptons, also surged more than 20 percent.”
Bottom Line
Markets real estate and others don't always perform as anticipated. For example the past several years have been the perfect time for most home owners to sell and trade up to a more expensive home but most sat on the sidelines. Will this emerging trend of higher prices for high-end luxury homes change this pattern and see more people putting their medium and entry level homes on the market?
Original Source: Dave Martin's STM Blog...
This information about "The New Tax Code's Impact on the Luxury Home Market" is brought to you courtesy of Dave Martin Realty Group, your Northern Virginia residential real estate experts. If you're considering selling or buying a house in the Northern Virginia metro area, we'd love an opportunity to earn your business, provide you an outstanding experience, and demonstrate to you that:
"Help From The Best Agent Makes All The Difference."
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