HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
could result in a decrease of both home sales and prices.
3. Los Angeles-Long Beach-Anaheim , Calif. (9.6 percent) 4. Urban Honolulu , Hawaii (7.5 percent) 5. San Diego-Carlsbad , Calif. (6.4 percent) VILLACORTA : The new tax reform bill will clearly have an effect on home buyers, sellers, and renters. The net effect for the housing market, however, is harder to discern. The reduction in the mortgage interest deduction limit alongside the cap on state and local taxes, specifically property taxes, will have mixed effects across the country. Overall, the aim of the bill reduces the tax saving incentives for homeowners, but it is unclear whether that will be enough to stymie what has been very active housing demand over the last few years.
What is clear, however, is that this bill will add more uncertainty to a housing market that has been searching for firm rational footing since the turn of the millennium. Whether this new tax reform bill reduces the tax burden for a given consumer is yet to be known, but the market is already flush with uncertainty, and this uncertainty will tip markets in various directions. For example, higher-end markets have already been seeing softening price growth, and this new headwind could be the catalyst that starts to send some local markets tipping downward. In major metros that are largely represented by these high-end prices (such as the San Francisco Bay Area), there is even more potential for a larger market effect.
The states (including the District of Columbia) that are likely to be impacted the most (based on market share of mortgages above $750,000): 1. Washington, D.C . (8.9 percent) 2. California (6.1 percent) 3. Hawaii (6.0 percent of mortgages) 4. Massachusetts (2.9 percent) 5. New York (2.3 percent) The metros that are likely to be most impacted (based on market share of mortgages above $750,000): 1. San Jose-Sunnyvale-Santa Clara , Calif. (21.8 percent) 2. San Francisco-Oakland-Hayward , Calif. (21.6 percent)
“The combined impact of the $750,000 cap on mortgage interest deductions and the increase of the standard deduction will eliminate
the tax benefits of homeownership for many.” — VIVAS
“This bill will add more uncertainty to a housing market that has been searching for firm rational footing since the turn of the millennium.” — VILLACORTA
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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