2017 Sale to List Price Ratio
Price Per Square Foot by City
Challenges to Home Sales in 2018
- Supply will remain a thorn for brokers, developers and homeowners
- Long-time homeowners are expected to remain in their homes to avoid paying significant capital gains taxes due upon sale and to maintain low existing
property taxes and low rates on current mortgages.
- More single family units are expected to become rentals
- Mortgage interest rates are expected to move higher. According to mortgage professionals 30 year interest rates will rise to 4.5 percent in 2018
- The tax reform law changes affect real estate beginning with the 2018 tax year.
You will no longer be able to deduct:
- The State income tax and property taxes above $10,000 per year in total;
- Moving expenses (with an exception for certain military);
- Mortgage interest beyond interest on $750,000 of acquisition debt, if you purchase a new home; and
- Mortgage interest paid on equity debt (this is no longer deductible for any taxpayers).
I do not expect any significant changes to our local market as of the result of the new tax law because of the high demand and the wealth of our clients.
The Positives in 2018
- The local economy is strong and job growth will be expanding
- Wages are expected to increase
- More millennials will be leaving the nest and looking to buy homes
- The net cash gain to sellers is the highest since 2006
2018 Real Estate Industry Outlook
I am optimistic about the economy and the housing market as the new year begins. High demand and robust economic conditions are reasons to be hopeful. Unless there’s a major correction in the tech sector, prices will continue to rise. I expect our local market to increase 8-10% in value.
The question on everybody’s mind is: are we going to hit another bubble soon? The market conditions today are fundamentally different from the bubble of a few years ago. Home sales are recovering and we don't have the subprime lending we had before. Mortgage lending has stringent requirements today - almost too stringent. There is job growth and business and consumer sentiments are high and business is booming in what experts are saying could become the longest economic expansion since WWII.Please share my semi-annual report with your friends who might be looking to buy or sell their home. I will be happy to answer any questions or discuss in further detail the state of the real estate market