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.