Buying a home in 2018? Here’s what you need to know.

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Homeownership can be a costly endeavor, especially since certain tax breaks are now less generous. Here are a few things to be aware of if you’re planning to go from renter to owner this year.

If you’re thinking of buying property this year, here are a few points you need to be aware of.

1. Your housing costs shouldn’t exceed 30% of your take-home pay

Regardless of how the recent tax changes end up impacting you, a homeowner’s housing costs should never exceed 30% of take-home pay. Different folks have their own interpretations of what peripheral expenses that 30% threshold should encompass, but at a minimum, it should cover known costs like property taxes and homeowner’s insurance. For better protection, however, I’d recommend that that 30% mark include maintenance, as well.

The typical U.S. homeowner spends anywhere from 1% to 4% of their home’s value on maintenance each year. If you’re buying for the first time, there’s no way to know where you’ll fall in that range, but if you aim for 2.5% — smack down the middle — and are looking at a $400,000 home, that’s roughly $833 per month in maintenance.

If you then take that $833 and add it to your monthly mortgage payment, property tax payment, and homeowner’s insurance payment, your total should not be greater than 30% of your monthly income. If it is, you’re leaving yourself with limited wiggle room for unplanned expenses that may arise in the future.

2. You can still deduct your mortgage interest — to a point

The mortgage-interest deduction has long been criticized for favoring the rich, and so some legislators have been arguing to eliminate it for years. Thankfully, this key deduction is still intact for the current tax year — albeit at a lower threshold.

It used to be that you could deduct interest on your mortgage for loans valued at up to $1 million. But as a result of the new tax changes, that limit has been lowered to $750,000. If you’re an average earner looking to buy a modest home, you should be able to deduct your mortgage interest in full. But if you’re looking at pricier homes, or live in an expensive area of the country where home prices are inflated, you may want to be more cognizant of that cap.

Of course, if you’re not planning to itemize on your tax return, there’s no need to worry about the mortgage interest deduction, or any deduction, for that matter. As it is, the majority of taxpayers don’t itemize, and since the new tax rules effectively double the standard deduction, it’s estimated that fewer filers will do so going forward. But if your intent is to itemize, then be aware of the aforementioned limit.

3. Your property tax deduction may be capped

Just as the new tax laws limit the mortgage interest deduction, so, too, do they limit the extent to which you can deduct property taxes. In fact, going forward, your total SALT (state and local tax) deduction maxes out at $10,000, whereas prior to 2018, it was unlimited. If you’re thinking of buying a home in a low- or no-income tax state, and you don’t expect your property tax bill to be particularly high, then the $10,000 cap won’t impact you. But if you’re buying a home in, say, New Jersey, which boasts the highest property taxes in the nation, you may come to find that a portion of your property tax bill is non-deductible.

Again, if you’re not planning to itemize on your tax return in the first place, then there’s no need to worry about this change. But one thing you should be aware of is that some experts say that home values may soon start to drop as a result of the new laws, since, by taking away a portion of the tax breaks buyers once enjoyed, they make ownership less affordable in some parts of the country.

If you’re buying a home because you plan to live there for quite some time, this may not be too concerning. But if your plan is to buy a home, flip it, and unload it in a year or so, prices could start to fall when more buyers see their tax breaks go down and their tax bills go up.

Buying a home can be a wise financial decision that serves you well, not only at present, but for many years to come. Just be sure to know what you’re getting into before signing that mortgage.

~Maurie Backman, The Motley Fool

Can Seattle’s Real Estate Market Keep Up This Growth?

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If Seattle’s real estate market is going to slow down over the next year, will it be a burst or a dribble?

That’s the question on a lot of analysts minds. According to the latest S&P Corelogic Case-Shiller home price index, Seattle has lead the nation in home price increases for  14 months in a row.

The only relief buyers seem to get is a holiday slowdown, and even that is fairly short-lived: Adjusted for seasonal changes, prices grew 0.6 percent from the month prior, according to Case-Shiller, and the Northwest Multiple Listing Service report found that while both inventory and pending sales dipped to their lowest levels since April, prices still increased by double-digits in most of the 23 counties NWMLS serves.

While many brokers see the market growing at more than double the rate of the national average and think the boom is unsustainable in the next year, the question now is mostly whether Seattle will go out with a bang or just start to rise more gradually.

According to the NWMLS report, many brokers are seeing signs that Seattle is not a bubbling market.
“Prices are expected to see some much needed slowdown in 2018 which will help bring more balance to the market,” OB Jacobi, president of Windermere Real Estate, said. “Rising home prices on their own don’t lead to a bubble; a number of other factors have to come into play.”

But can Seattleites be expecting another 12.67 percent growth over last year? Probably not, is what most brokers hope, but so far there’s not much indication that Seattle is slowing down in the first part of 2018.
As one put it to the NWMLS, 2018 could be “less glamorous with 6-to-8 percent appreciation, or even a slight flattening of the market for 8-to-12 months.” But J. Lennox Scott, chairman and CEO of John L Scott Real Estate, “market conditions are set for another robust market in the year of 2018.”

~Zosha Millman, Seattle PI

The Best New Condo Project in Seattle Is Actually in Bellevue

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Bosa Development just released new architectural details and renderings of the highly anticipated One88 condo project in Downtown Bellevue.

One88 will be the city’s first high-rise condominium community in nearly a decade, and it will also be the first project in the region for world-renowned architect Hossein Amanat. The 21 story luxury tower will feature 143 residences.

Bellevue, much like Seattle, has been starving for condo inventory. Its boutique, has an amazing location, will overlook Downtown Bellevue Park and has quite a bit of view protection for years to come.

According to a recent press release by One88:

“One88 will truly change the skyline of downtown Bellevue. It will not be an ordinary, cube-shaped tower, it will be a statement-making building with a different application of materials and shape that creates the appearance of movement,” said Amanat, principal of Amanat Architect. “The views of Lake Washington, the Cascades and the surrounding city also heavily influenced my design. I wanted to create a number of private and communal spaces that framed those views and bring the outdoors in.”

“One88 brings a new style of design and a new level of luxury to downtown Bellevue,” said Bemi Jauhal, director of sales and marketing for Bosa.“The demand for downtown’s vibrant urban lifestyle is growing and we feel the city is ready for an unique residential offering.”

“One 88 is located at the intersection of Bellevue Way Northeast and Northeast Second Street. One88 will be just a few steps from Downtown Park and a variety of dining and high-end shopping. Residences will have a range of views from Lake Washington, mountains, The Bellevue Skyline and more.

~ Urban Condo Spaces

Report: Tech makes up almost all new office jobs in Seattle

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Seattle observers are well aware of the tech industry’s role in the city’s economic boom, but a new report takes it to a new level, finding that more than nine of every 10 office jobs created over the last two years came from the tech sector.

The report by real estate firm CBRE, finds that Seattle tech firms added 23,575 jobs in 2015 and 2016, accounting for 93 percent of all office jobs in the city created during that time span. In raw numbers, Seattle also created more tech jobs than any other single market in the survey.

Seattle has been buoyed by massive growth from hometown tech giant Amazon, which employed 541,900 people worldwide at the end of the last quarter, including more than 50,000 in Seattle. Additionally, more than 100 out-of-town tech companies have set up shop in the Seattle area. A few, like Facebook and Google, have become some of the top tech employers in the city.

The report finds that high tech jobs focused on software and services employed 145,356 people in Seattle in 2016, or about 38.1 percent of office jobs. Tech companies in Seattle have a strong talent pool to pull from, as 45 percent of residents have a bachelor’s degree or higher.

Another area where Seattle stands alone is in its frothy office market. The report listed significant tech leases for each market, and F5 Network’s move to lease the entirety of a new downtown Seattle office tower was the biggest deal spotlighted in the report. The report did not mention two big leases signed by Amazon for a striking new tower, and a large swath of space above the downtown Macy’s.

Despite all these tech office deals, rents for tenants aren’t rising as fast as other markets. Seattle came in 10th in office rent growth. The average asking rent for office space of $32.45 per square foot is less than half of San Francisco’s at $72.90. Developers are active here: the 7 million square feet of new office space under construction in Seattle trails only New York and Silicon Valley.

All these figures point to Seattle as a more established tech market than some of the other top finishers in the report. In Pittsburgh, for example, tech accounted for a slightly higher percentage of new office jobs at 95 percent. But that only translated to 4,400 new jobs, or about one-sixth of Seattle’s new tech jobs over the two-year period.

It also shows that the San Francisco Bay Area is still the top tech region in the country. The report separates San Francisco and Silicon Valley, diluting their numbers. Combined, the two markets accounted for more than 41,000 tech jobs over the two-year period, with more than 15 million square feet of office space under construction.

 


~Nat Levy, Geekwire

Seattle’s Condo Conundrum: Historically Low Supply

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Seattle is experiencing a historic shortage of condos, as developers choose to build apartments rather than market-ready living spaces.

One reason for the shortage is an unusually stringent state condo law that makes it easier for condo owners to sue developers for construction defects.

“This is really an affordable housing issue,” said Kerry Bucklin, condo attorney with Bucklin/Evens in Seattle. “We need more housing. And in order to have more housing, we need to stop suing developers over ticky-tack complaints.”

There are only four tower developments currently slated to include condos in the downtown core.

Before 1999, King County had an average of around 2,000 condos on the market for buyers to purchase. Today, it’s lower than 350 — a record low.

Dean Jones with Realogics Sotheby’s International Realty says clarifying the law is one of several steps that can be taken.”The only solution I see to this affordability crisis on market-rate housing is reduce the headwinds that developers face in getting permitted products,” he said.

One foreign developer sees the void of condos and is ready to take a risk on Seattle. Dali Development from Taiwan has plans to construct the KODA tower at 5th Avenue and Main Street in Seattle’s International District. It’s slated to have 17 floors and 202 units, and will soon hit the market with condos between 400-1,124 square feet for up to $1 million.

“A lot of developers are looking to diversify their portfolio, and Seattle is the place to be,” said Kevin Hsieh with Dali Development.

“Also, Amazon is huge in Asia right now, so it’s become the most attractive place on the West Coast when it comes to growth and potential. Seattle is the city of the future right now,” said Hsieh.

~Jake Wittenberg, KING

Seattle’s affordability crisis is costing renters $6K per year, report says

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Across the United States, renters are paying more of their income on rent than ever before, and Seattle is no exception. But what’s the actual hit to the average renter’s pocketbook like?

A new study by Zillow analyzed cost burden from renters before the housing bubble and now. Between 1985 and 2000, typical rent in the Seattle metropolitan area was about 23.8 percent of area median income (AMI). Now, it’s about 30.8 percent.

In today’s dollars, that difference accounts for $5,592 per year, Zillow’s analysis found, but that’s directly comparing median income to median rent. For homeowners, housing affordability improved, with income share spent on mortgage actually dropping a couple of points.

This would imply that the affordability gap between renters and homeowners has only grown—meaning the typical cost burden for renters could actually be a little higher than 30 percent, although the Zillow data doesn’t conclusively point to that.

It would track with data from the Harvard Joint Center for Housing Studies, which found that in 2015, nearly half of renter households in Seattle spent more than 30 percent of their income in rent, with almost a quarter of renter households spending more than half their income.

Regardless, with more than half of those filing taxes in Seattle making under $50,000, it’s safe to say that not everyone that’s paying median rent is making median income—which broke $80,000 in 2015.

Even taking the numbers at face value, though, the problem is a little worse in Seattle than nationwide. In the United States as a whole, Zillow found, the percentage of median rent to median income went from 25.8 percent to 29.1 percent, costing the typical renter around $2,000 per year.

5 ways and reasons to refinance your mortgage

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Rates are still near all-time lows, which means mortgage refinancing remains a good deal for many.

Yes, you can save money by doing a simple refinance in which you swap a lower rate for your existing higher rate. But that’s just one way — and one reason — to refinance a home loan.

Trying to decide if it’s time to refi? These are five good reasons and types:

1. Mortgage refinance to change your rate and term.

2. Cash-out refinance.

3. Refinance to shorten the mortgage term.

4. Cash-in refinance.

5. Refinance to get rid of mortgage insurance.

Rate and term mortgage refinance

Rate and term refinances are the most common form of refinancing. When you get a rate and term refinance, you replace your mortgage with a loan sporting a lower interest rate, and for roughly the same term. The term is the payoff period: A 30-year mortgage has a 30-year term.

Cash-out refinance

Cash-out refis were popular during the housing boom and contributed to the bust. When you get a cash-out refi, you borrow more money than the outstanding mortgage balance and you receive the difference in cash.

For example, you might have borrowed $225,000 a few years ago for your home, and you’ve been making payments faithfully and now owe $200,000. Meanwhile, your home’s value has swelled and can be appraised at $300,000. In this case, you can refinance for more than $200,000. In fact, you can borrow up to $240,000 without having to pay for mortgage insurance.

There are responsible ways to use a cash-out refi. You can use the money to pay off high-interest debt. Or you could use it for a home improvement: a swimming pool or solar panels.

Refinance to shorten the term

You got a 30-year mortgage three or five years ago, and you want to refinance. You don’t have to start over with a 30-year repayment period. You can ask to pay it off in a shorter time than that — 27 years, 25 years, 20 years or 15 years.  If your preferred payoff period is more than 20 years, you’ll probably have to get a 30-year mortgage and ask the lender to amortize it over your preferred, shorter period. Most lenders offer 15-year mortgages, which generally have lower interest rates than 30-year loans. A few lenders offer 20-year mortgages with slightly lower rates.

Cash-in refinance

In addition to the cash-out refinance, there’s such a thing as the cash-in refi. This happens when you have some money lying around and you spend it to pay off part of the old mortgage. Then the new, refinanced loan is for less than the old loan.

Cash-in refinances used to be more popular. But in today’s low-interest environment, any spare cash would best be used to invest in something with a higher return than your mortgage interest rate.

Divorces can force a variety of the cash-in refi, in which one former spouse pays off a portion of the outstanding loan balance and the remaining spouse refinances the loan in her or his own name.

Refinance to get rid of mortgage insurance

You made a down payment of less than 20 percent, and you’ve been saddled with mortgage insurance payments, aka PMI, as a result. But in the years since you got the mortgage, you paid down some of the debt and, more important, the value of your house went up a lot. If the outstanding loan amount is less than 80 percent of the home’s appraised value, you might be able to refinance into a loan without private mortgage insurance.

This can be an especially valuable tactic if you have a mortgage insured by the Federal Housing Administration — also known as an FHA loan. With modern-day FHA loans, you can’t cancel the mortgage insurance — even when your loan-to-value ratio falls below 80 percent. The way to get rid of FHA mortgage insurance payments is to refinance (or to sell the house).

~Holden Lewis, Bankrate

Will tax reform end the American dream of owning a home?

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If a U.S. tax reform measure targeting the popular mortgage interest deduction is adopted, values of homes could drop 10 percent on average nationally, Lawrence Yun told 20,000 real estate agents gathered for the National Association of Realtors conference last week.

Home owners would be leery of trading up to bigger, more expensive homes, because the cap would fall to $500,000 from the current $1 million, while renters would lose a tax benefit that could be a key incentive in the decision to buy, said Yun, chief economist of the real estate brokers group.

“This will greatly disincentivize buying homes,” he said. “There will steadily be fewer home buyers over time.”

The NAR is launching an offensive against the tax bill introduced last week by Republicans in the House of Representatives and anything similar that arises in the Senate. Finalizing a measure remains a long way off.

But real estate agents are worried. The potential change comes when many Americans still are reluctant to buy homes after the trauma of the 2008 housing crash, said Kenneth Rosen, chairman of Rosen Consulting Group. Home ownership remains near a 50-year low, with potential homebuyers still suffering from “post-foreclosure stress disorder,” he says.

Currently 63.9 percent households are homeowners, compared with the 69 percent pre-financial crisis.

Since a final tax change is a moving target that could disturb future housing prices, it may be prudent to put home buying on hold while awaiting clarity from Capitol Hill.

“If changes in your tax liability would make buying a house unfeasible, it probably would be worth sitting on the fence,” said Ralph McLaughlin, economist for Trulia, an online real estate service that is a unit of Zillow Group Inc.

BIGGER STANDARD DEDUCTION

To understand the potential impact, do not look directly at the mortgage interest deduction. Under the House plan, most middle class homeowners still will be allowed to take that popular deduction because the tax plan does not wipe it out for except for the portion of a mortgage over $500,000.

Still, the tax plan essentially renders the deduction worthless to the middle class, and that is what Yun expects to injure the housing market.

The reason for the mortgage deduction’s loss of power: a key part of the GOP tax plan almost doubles the standard deduction for taxpayers. Couples could claim a standard deduction of $24,400 rather than the current $12,700; singles could claim $12,200 rather than $6,350.

Instead of buying a house or scouring checking accounts for possible other deductions, a middle class taxpayer simply could claim a standard deduction that would protect a much larger chunk of income from taxes than current law provides.

With the higher standard deduction, the math turns the decision to buy or rent upside down from current conditions, said Trulia’s McLaughlin.

After a sharp rise in rents, buying has recently been a better deal in 100 of the nation’s largest markets. But the tax changes could make renting more economical, and real estate agents could find it more difficult to turn renters into buyers. Often the agents use tax deductions as a selling point when dealing with younger would-be buyers.

Eventually, however, there is potential for change and an improvement in housing market as young adults amass the down payments they have struggled to accumulate, McLaughlin noted.

In the association’s recent survey, about 25 percent of potential first-time homebuyers said amassing a down payment was a problem.

Renters who get an extra $11,700 each year from the higher standard deduction could sock away those tax savings, if they do not have to use it for student loans or decide on other purchases.

And homes could become more affordable if sluggish buying drives prices down. According to the National Association of Realtors, home prices rose 48 percent during the last six years, while incomes climbed just 15 percent. The nation’s median home price is $235,000.

For expensive homes, the standard deduction will be inadequate to make up for the mortgage deduction, and large families will face even more difficulty since the tax plan also takes away the $4,050 dependent exemptions for each person, according to McLaughlin.

“Realtors use the tax deduction to educate first-time home-buyers, and if they lose it, that could be detrimental for home buying,” said Elizabeth Mendenhall, chief executive of Re/Max Boone Realty in Columbia, Missouri and president-elect of the National Association of Realtors.

(The opinions expressed here are those of the author, a columnist for Reuters)

~Gail MarksJarvis, Reuters

Key indicators for Western Washington housing still rising, but brokers detect slowdown and uncertainty

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Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.

Pending sales rose nearly 8 percent from a year ago, closed sales were up 5.2 percent, and prices jumped about 8.2 percent, with 14 counties reporting double-digit gains. Even the number of new listings improved on the year-ago total.

Northwest MLS figures for the 23 counties it serves show members added 8,466 new listings to inventory during October, outgaining the year-ago total of 7,575 by 11.8 percent. Buyers outnumbered new listings, with 10,586 of them having their offers accepted. That number of pending sales was up nearly 8 percent from the same month a year ago.

“The challenge for buyers actually isn’t lack of choice, it is the rapid pace of sales,” suggested Ken Anderson, president/owner of Coldwell Banker Evergreen Olympic Realty.

“The market in Thurston County has never been better for sellers, and they’re getting the message,” Anderson remarked. His analysis revealed a 10-year high for sellers coming to market during October. “These savvy sellers are not waiting until spring to sell. They are taking advantage of today’s great market and making their move now,” he reported.

Buyers may find themselves in a quandary as the year winds down as they contemplate limited supply, possible upticks in interest rates and tax reform. Last week’s announcement of a provision in a GOP tax proposal to cap the mortgage interest deduction is concerning to buyers, brokers and builders.

“Imagine if the proposed plan to cap the mortgage interest deduction at $500,000 is approved in a market that is starved for homes and where the median price [for a single family home in King County] is now $630,000,” said O B Jacobi, president of Windermere Real Estate. “Homeowners may be less likely to sell because they would be giving up their grandfathered tax credit on their current home. That’s fewer homes for sale in a market where we really need them,” he stated, adding, “There could also be a flood of new buyers trying to purchase before the plan is passed, adding to the already hyper-competitive market conditions.”

Northwest MLS data show 66 percent of single family homes sold so far this year (Jan. – Oct.) in King County had selling prices of $500,000 or higher.

Within King County prices are considerably higher. In Seattle, year-over-year prices jumped 17.6 percent, from $625,000 to $735,000. On the Eastside, the median price for a single family home rose 10 percent from a year ago, increasing from $768,000 to $845,000. Nevertheless, high prices did not seem to deter many house-hunters.

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, noted October was the “best ever for sales activity in the Puget Sound region. With a large buyer pool for each new listing, we saw a higher percentage of new listings sell within the first 30 days of coming on the market,” Scott reported, while also noting the seasonal change in housing market dynamics. “As we enter the winter market, the number of new listings being added will be in short supply from now through February,” he explained.

Inventory remains low in many counties in the Northwest MLS system. Overall, there is only 1.5 months of supply of single family homes and condos combined. In King County, it’s less than one month. Industry analysts say four to six months typically indicates a balanced (or “normal”) market.

Most brokers agree inventory will not grow over the next few months. “Sellers who bring their homes on the market over the next three months will have a lot of interest because of the pent-up demand of buyers who are going to have fewer houses to consider,” suggested Wilson.

“Homebuyers in our area are at a real disadvantage right now,” commented Wilson, a member of the Northwest MLS board of directors. “They have to be pre-underwritten with their lenders, put forward a conventional or better offer, put down substantial earnest money, and hope that multiple offers do not escalate the price out of their affordability zone.” He fears “more and more buyers will be sidelined.”

 

~Northwest Multiple Listing Service

 

 

 

Republican tax plan would hit Seattle, Eastside homebuyers dealing with pricey market

mortgage-calculator-tennesseeAspiring homeowners in the Seattle region, dealing with the hottest housing
market in the country, would be hit especially hard by the new GOP tax plan
unveiled Thursday.
The proposal would cap the federal mortgage-interest deduction at $500,000
for new-home purchases, down from the limit of $1 million. Basically, new
homeowners would only be able to deduct the interest on the first $500,000
of their mortgage.

This won’t impact most Americans because they don’t own homes that expensive. But it’s a big deal locally, where the median single-family houseselling today is worth $725,000 in Seattle and $855,000 on the Eastside.

Even with a regular down payment, lots of buyers here take out a mortgage
that’s over half-a-million dollars, and they would lose out on some of their
itemized tax benefits if the Republican tax plan passes.

The change wouldn’t apply to current mortgages — only new sales going
forward. And it wouldn’t impact anyone who takes the standard deduction,
which would nearly double under the tax plan, because the mortgage-interest
break is only used by people who itemize their deductions.

But the potential impact — combined with proposed limits on two other tax breaks, for home flippers and mansion owners — looks large. So far this year, 30 percent of all sold homes and refinances in King County used mortgages above $500,000. Looking at single-family houses, 36 percent of
new mortgages this year were above half-a-million dollars. Those rates are
likely to rise in future years as home prices here go up faster than anywhere
in the country.

More than 11,000 King County homebuyers so far this year took out a
mortgage over $500,000, including 4,500 in Seattle, 1,090 in Bellevue, 760
in Kirkland, 660 in Redmond and 560 in Issaquah, according to Attom. Most
of those are single-family houses, but also about 1,200 condos in Seattle,
mostly downtown.

Homes with mortgages over $500,000 made up half of new sales this year in
Sammamish, 35 percent in Bellevue, Redmond and Issaquah, and 29 percent
in Seattle. On the other end, less than 5 percent of new mortgages this year
topped half a million dollars in Tukwila, SeaTac, Kent and Des Moines.
The savings from the tax break can add up. Across the Seattle metro area, the
typical homeowner who used the deduction claimed $11,540 last year.
There are two other possible impacts from the tax plan that would serve to
make housing more unaffordable, said Windermere chief economist Matthew
Gardner.

First, homeowners could be less likely to sell, preferring instead to benefit
from their grandfathered tax credit on their current home. That would starve
a market of homes for sale at a time when inventory is at record lows.
Second, interested buyers might rush to purchase to be eligible for the tax
credit before the plan could pass, increasing demand during what is typically
a slow time of year. “The longer-term effects could be substantial,” he said.

He noted that homebuilders and other special-interest groups have or are
likely to come out against the plan, and called the proposal a “first stab at a
remarkably complex issue.”

The changes would impact people the most in the early years after they buy,
since mortgage payments initially are mostly interest, which is what the tax
break is used for.

Two other elements of the tax overhaul could cost local homeowners as well.
The proposal would also limit capital-gains-tax breaks on home sales.
Currently, homeowners can generally exclude from gross income up to
$500,000 profit on a home sale if they’ve used the house as a principal
residence for two out of the previous five years. The GOP proposal would
change that so the exemption would be applied only if people lived in the
home as their primary residence for five out of the prior eight years. And
they’d be able to use the exemption only once every five years, targeting
speculators and home flippers.

What’s more, the plan would cap property-tax deductions at $10,000. Most
locals wouldn’t be affected. The average homeowner in King County pays
about $5,600 in property taxes; even on expensive Mercer Island, the typical
tax bill is $8,800. But some owners of large homes have bills that top
$10,000; in Medina, the typical homeowner pays $15,200 a year in property
taxes, and on Hunts Point, where the typical home value tops $3 million,
homeowners pay $22,300 in property taxes.

~Mike Rosenberg, Seattle Times