January 2018: Will New Tax Changes Bring a New Dynamic to the Marin Market?

It’s a bright new year for all of us, weather-wise at least. Marin residents saw a lot more sun than rain here in the past month, with dry days providing lots of quality time outdoors for crisp winter walks or hikes. Kathryn and I did our first ever jaunt to the summit of nearby Mount Diablo (3,849 ft) that provided for some spectacular views well over 100 miles. Tahoe snow was thin over the holiday weeks, but forecasts call for the normal weather pattern to return this month, stocking up both snow pack and local reservoirs.

But enough about the weather. Let’s get right to what homeowners are really talking about: Me. Sorry, I mean the new tax changes capping mortgage interest and property tax deductions. They’re real and they’re here, but what does that mean for homeowners, home buyers or home sellers?

The short answer is, nobody knows. We have no history here to guide us, but it’s safe to say there will be some type of impact. It’s just impossible to say how much until we’re a few months passed it. But if the Feds raise interest rates “a few more times this year” (as we’re reading), the new tax implications for real estate could further contribute to a market slow down. This wouldn’t necessarily be unexpected, or a bad thing, given we’ve seen seven straight years of slow and solid property appreciation in Marin. So we may have been due for a slight pullback anyway, which isn’t to be misconstrued as a decline in values. Think fewer multiple offers and less “wow” on what the well-located, well-priced homes sell for.

For the record, our local industry is still forecasting low single digit appreciation, at least in the key areas like Marin, the Peninsula and some areas of SF. If demand remains high and the supply stays fixed, you don’t have to hold an Economics Degree to understand that the price of the product will increase. It just may not increase as much as it has in the past as the affordability factor(s) have now changed. Not that anybody cares what I think, but I for one remain very optimistic on the safe harbor investment of Marin real estate. They aren’t making anymore of it, for one, and people will continue to stream into our state, looking for a better quality of life. Plus, with extreme highs and lows of weather being the new norm across the country, some folks may get fed up with their forever changed climate and seek the mild temperatures we offer here. (See first paragraph above for more clarity). But as always, we’ll see what happens and I will report back month by month.

Any real-time questions though, let me know what I can do to help. Thanks for reading and here’s to a great 2018 for all of us.

TS

Text or call 415.377.5222 or ted@gomarin.com

Filed under: Uncategorized by Ted Strodder