Two powerful real estate organizations are fighting the latest version of the tax reform bill in Congress. Both the National Association of Home Builders and the National Association of Realtors say reducing the mortgage amount eligible for the mortgage tax deduction from $1 million to $500,000 could do serious harm to the real estate industry. In the short term however, it could spur eligible home buyers to proceed with planned home purchases before the end of 2017 in order to capture the existing deduction.
Under the current plan, which still has a long way to go to be passed, less than ten percent of home buyers in Atlanta would be affected by the change but they represent the entire affluent market. The change would only affect new purchases (2018 and beyond), and not purchases made in previous years. Other proposed changes may mitigate the elimination of part of the mortgage interest deduction for affluent home buyers although individual situations vary. A tax professional should be consulted for a full evaluation of the bill’s potential effects for each taxpayer.
Already, the last two months of any year represent an excellent time for both buyers and sellers to be active in the Atlanta real estate market. Over the last 10 years, home sales and prices have shaken their fall doldrums to register their highest mark between August and March every year except the Great Recession years of 2007 and 2008. The housing market is most in balance between supply and demand at this time of year than any other time of year because of an uptick in demand from tax-driven sales, year-end compensation awards, and business relocation. Beacham & Company, REALTORS encourages sellers to be patient the next 30 days as end-of-the-year demand materializes, while the firm also urges buyers to be proactive and use market timing and the proposed tax plan as an opportunity to obtain the best deal possible.
Although there are some indications that the housing market already cooled off before the tax reform plan was proposed, Beacham enjoyed another record sales month in October. The firm sold 49 percent more homes last month than any previous October in the last 11 years while dollar volume closed was up 33 percent.
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Beacham & Company, REALTORS is Atlanta’s top-selling luxury real estate office. The firm was founded in 2006 by Glennis Beacham, one of Atlanta’s most celebrated real estate agents. The company sells nearly $1 billion in real estate annually among its 100 agents who are the most productive in the state by dollar volume sold.