2018 Tax Reform & Housing Market Update with YPN
Hey everyone!
Today I’m at the Orange County Young Professionals Network breakfast; and Tony Capitelli, Government Affairs director at OCR, gave us the update on taxes and our housing market. If you’d like in on the scoop….read on 🙂
Not Fake News – Orange County Needs Housing Inventory
As previously stated in our post with Steven Thomas, we don’t have enough people selling their home in Orange County right now. Our current estimated time on the market is just 24 days – it’s a strong seller’s market. Furthermore, the ‘affordability’ factor in OC is around 20%, and prices continue to rise with the lack of inventory. Student loan debt keeps renters longer and longer.
Tony doesn’t believe we’re in another bubble, so this is our new normal in Orange County. The median sales price is now $800K. The prices continue to creep so high because of inventory, inventory, inventory. People are staying in their homes longer and longer. It also costs more to build here in OC, so that pushes up new home prices.
Consequences of our inventory drought are less housing, longer commutes, more traffic…people are having to move outside of the city or county.
Even though all these updates aren’t great (especially to renters), please keep perspective. Homeownership is the still the best way to generate wealth for ‘the average Joe’.
What’s Up With 2018 Tax Reform
DISCLAIMER: This is information on what is in the new tax bill. This is not tax or legal advice…contact your CPA for that or ask us for a referral!!
Harmful tax provisions
- Raising the standard deduction
- Single filers – 12K / Joint filers 24K
- eliminates homeownership incentives for most
- Lowering the mortgage interest deduction
- Cap lowered from 1M to 750K
- Can only deduct HELOC remodeling
- Limit on State and local tax deduction
- Eliminates entertainment deduction
- Businesses can no longer deduct expenses for entertainment purposes. Sorry…less spoiling my clients and more giving it to Uncle Sam.
- Historic tax credit
- repeals moving expense deduction
- Except for military
Helpful tax provisions
- 20% passthrough for a business entity under 157K (single)
- Exclusion of gain on sale of principal residence
- We kept the 2 out of 5 year qualification 🙂
- Like kind exchanges
- 1031 exchange is still available
- Low income housing credit
- Child tax credit increased
- Medical expenses deduction remains
- Student loan interest deduction remains
- Keeps deduction for casualty losses
We’ve basically de-incentified homeownership and charity, which IMO sucks. The good news is that millennials still see the value in Homeownership and they are pretty darn charitable anyway 🙂 45% want to buy homes in the next 5 years. It’d be cool if we could vote for more benefits to support homeownership incentives in the future you guys! Follow NAR’s #HomeownershipMatters tag if you’d like to stay in the know there.
If you’d like to download Tony’s full presentation, just LIKE Orange County Young Professionals Network on Facebook – we’ll be posting it soon – or email Angie@AskAngie.com.
Orange County Real Estate Success 
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