It is no secret that the National, State, and Local Realtor® associations are strongly opposed to certain provisions in both the House and Senate versions of the current tax reform bills. The REALTOR® concerns range from worry that changes to the present capital gain exclusion will result in a further decrease to for-sale inventory, to concern that proposals regarding mortgage interest and property-tax deductibility are liable to decrease home ownership rates and to drastically depress property values.
It is not my intention here to repeat those arguments or to analyze their validity. There simply isn't enough room for that. Rather, I would like to encourage readers to examine on their own some of the Realtor® organizations' central arguments and, importantly, the facts and figures that undergird them.
Credit where it's due: the National Association of REALTORS® (NAR) has devoted a great deal of effort to collect and present the data on which its conclusions are based. Moreover, they are presented in a manner that is both accessible and relevantly localized.
Interested persons can examine the REALTOR® analyses at the NAR website. They are available on the public pages; you don't have to be a member to access them.
Many commentators have observed that the real-estate related proposals of the tax bills would have widely different impacts on different parts of the country. The analyses show this. For example, there is a separate fact page for each state. It shows, for each state, the number of owner-occupied homes, the percentage that have mortgages, and the amount of deductions taken. It gives the same information regarding deductions for real estate taxes. It then provides a scenario of the effect of eliminating these deductions. Based on the state's median price, an average decline in value is projected. Some examples: In Wisconsin, a decline of $27,800. In California, a projected average decline of $56,550 for the typical homeowner.
Even looking at state-by-state impacts paints with too broad a brush, so the analysis is also carried out at the level of congressional districts. Hence, for California's 49th District -- on the coast -- the projected typical loss of home value is approximately $58,000; whereas, in the less expensive inland area, California's District 23 would be expected to see an average loss of just over $20,000.
Of course, the arguments aren't just over home values. There are also discussions of ancillary economic activity generated by home sales, as well as the more intangible values that home ownership brings to neighborhoods.
Interested in the Realtor® analysis of possible impacts from the current tax proposals? Read about it Here. Think about it. And let your representatives know what you think, whichever side you're on.
Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way. His email address is firstname.lastname@example.org.