RIP Philo

Housing Slowdown

There are all sorts of reasons that house sales slow down, not the least of which are reduced tax benefits, higher interest rates, and a general market forces.

The upcoming changes in the tax code certainly did not help the housing market:
- The new SALT cap is extremely low, particularly if you own a home in the Bay Area. 10K! Mitigative solution: Stay put and keep current tax base, hampering both supply and demand (for a nicer home)
- The doubled standard deduction made owning with a mortgage less attractive (But a win overall once your loan is paid off enough).

- Mortgage interest deduction lowered from 1M to 750K (I believe it's 1/2 if you're buying alone). Houses are so expensive here this actually matters. On the supply side: More post-tax money + higher interest rates means those who locked into great rates won't want to sell, or want to buy a more expensive home. On the demand side: All of the above means everything just got even more expensive.
Permalink Tax Man 
August 10th, 2018 8:41pm
I've seen a few houses on zillow and where the seller has dropped their offer.

In this market, that's very unusual.

Unless the house was next to a rail line or other undesirable feature.
Permalink xampl9 
August 11th, 2018 9:45pm

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