Author Topic: Anyone try to sell a property lately?  (Read 3450 times)

FIPurpose

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Re: Anyone try to sell a property lately?
« Reply #50 on: January 08, 2019, 06:09:14 AM »
How does that work?  Let's say you bought a house for $100000 and you depreciate 25k.  Does that mean your basis is 75k?

More or less yes. So if you sell for 75k that's neither a gain or loss.

Pigeon

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Re: Anyone try to sell a property lately?
« Reply #51 on: January 08, 2019, 07:04:37 AM »
I'm a tale end of the baby boomer.  Your problem has nothing to do with millenials.  I've bought and sold several houses, several many decades ago.  The fundamentals really haven't changed all that much.  Everyone is looking to get the best house they can for the least money.  It is true that people now generally prefer houses where they don't have to do anything.  That might be a bit more pronounced now with HGTV.  Most people aren't mustacian.  Most people have very little free time.  Most people don't DIY.  Why would these people prefer a house where they have to do a lot of work?

But school system and location, location, location have always been key.  Even when we didn't have kids, we bought in the best districts we could because of resale.  My kids are grown and our next house will be in a good school system. 

Real estate is cyclic.  It's the nature of the beast.  If you don't live in an area with a lot of employment opportunities or other reasons to draw buyers, selling is going to be more challenging.  If there is new construction around, it's automatically going to be more attractive, and you will be at a disadvantage. If you said how many bathrooms your house has, I missed it.  If it's only got one bath or one and a half, that's a big disadvantage.

I think your best bet would be to drop the price, get rid of the tenants if feasible, clean it up as much as possible and get it on the market in the early spring.  The market is dead as a doornail this time of year in the northeast, unless you are talking about 55+ housing developments.


Dicey

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Re: Anyone try to sell a property lately?
« Reply #52 on: January 08, 2019, 07:54:29 AM »
How low do you go?  Where else on the East Coast can you have a house with a brand new kitchen and floors, 3 bedrooms and an office, and a 1 1/2 bay garage, and more, for under $200k?  The area isn't horrible, either.

The reason that housing prices are low is because demand is low. Wages, local/regional/state econimic outlook, geography, weather, educational opportunities, availability of inventory, style of housing, and fairy dust all combine to drive prices. I'd wager that not much has changed with respect to any of these factors since you bought the house. What has changed is your expectation. Sorry, a single person's expectation is not a market driver.

Yes not a desirable area.  Why?  Not sure.  Homes look nice nearby, mostly, but not exciting.  Not really walking distance to a library, businesses are within a few miles.  Better to drive, but could walk it.

I AM thinking of letting it go at a slight loss.  Homebuyers credit I got could offset some of this, although I counted on it as money in the bank.

Fortunately an insurance check paid for these renovations...well, about 80% of it.  Was hoping to get back my investment...
Wait! You got the credit, and insurance money. Perhaps if you calculated what you actually have into the property, you'd discover a better outcome than you're complaining about. You seem butt-hurt that the straw you spun didn't turn to gold. Sounds just like the entitlement you accuse milennials of.

I bought my first house in a second-tier area, because that's what I could afford. I put a lot of sweat equity into it. It was also a rental. I received no extra tax breaks, and no insurance windfall. When I sold it eight years later, I barely broke even.

But I learned a ton and that education proved priceless. I am FIRE now because of excellent real estate gains on subsequent properties in much more expensive markets. I only had the confidence to enter them because of what I learned on that first house.

You can learn from this experience and profit from that knowledge, but what you cannot do on this forum is act entitled, blame others, and generally exhibit troll-ish tendencies on multiple threads. Those kind of shenanigans are not rewarded here in mustache land. Without a substantial change of attitude on your part, you simply won't last here. Now, is that an accurate barometer of how well you're going to succeed in life your quest for FIRE? Can't say for sure, but I wouldn't bet against it.

[Dicey tips hat to @waltworks as she exits the thread.]

YttriumNitrate

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Re: Anyone try to sell a property lately?
« Reply #53 on: January 08, 2019, 08:04:35 AM »
My parents and their friends recently put their houses on the market, and it was quite shocking how bad their listing looked on Zillow and other online search tools used by those Millennials*. In addition to the realtor-taken crappy pictures, both also seriously understated the top-line square footage relative to other houses in the market by not counting finished basement area when other in the market counted it. Since MrBojangles has only gotten a handful of showings in many months, I'd suggest taking a close look at how the house's listing compares to other in the market.


*Get off my lawn you damn kids!

Laserjet3051

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Re: Anyone try to sell a property lately?
« Reply #54 on: January 08, 2019, 09:27:17 AM »
2 things:

YES, school district is a critical factor in home purchasing. This is working against you
1.5-2.0 hrs to the nearest large city? You expect someone to commute that long to their city job?

Does your sale price reflect these two realities?

MrBojangles

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Re: Anyone try to sell a property lately?
« Reply #55 on: January 08, 2019, 10:57:15 AM »
How does that work?  Let's say you bought a house for $100000 and you depreciate 25k.  Does that mean your basis is 75k?

More or less yes. So if you sell for 75k that's neither a gain or loss.

Wow!  I did not know that.  Psychologically, I want to get 200k which means I make back my original coat plus realtors fees.  Doesn't look like that's going to happen!  BUT, is it actually better to let it go for a bit less than 185k since I've rented it out for about 5 years?

FIPurpose

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Re: Anyone try to sell a property lately?
« Reply #56 on: January 08, 2019, 11:08:06 AM »
That depends on your personal tax situation. Are you planning on rolling the money over to another rental? How much are you going to make this year? Etc. Just figure it in to your cost/benefit analysis.

MrBojangles

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Re: Anyone try to sell a property lately?
« Reply #57 on: January 08, 2019, 11:11:20 AM »
How low do you go?  Where else on the East Coast can you have a house with a brand new kitchen and floors, 3 bedrooms and an office, and a 1 1/2 bay garage, and more, for under $200k?  The area isn't horrible, either.

The reason that housing prices are low is because demand is low. Wages, local/regional/state econimic outlook, geography, weather, educational opportunities, availability of inventory, style of housing, and fairy dust all combine to drive prices. I'd wager that not much has changed with respect to any of these factors since you bought the house. What has changed is your expectation. Sorry, a single person's expectation is not a market driver.

Yes not a desirable area.  Why?  Not sure.  Homes look nice nearby, mostly, but not exciting.  Not really walking distance to a library, businesses are within a few miles.  Better to drive, but could walk it.

I AM thinking of letting it go at a slight loss.  Homebuyers credit I got could offset some of this, although I counted on it as money in the bank.

Fortunately an insurance check paid for these renovations...well, about 80% of it.  Was hoping to get back my investment...
Wait! You got the credit, and insurance money. Perhaps if you calculated what you actually have into the property, you'd discover a better outcome than you're complaining about. You seem butt-hurt that the straw you spun didn't turn to gold. Sounds just like the entitlement you accuse milennials of.

I bought my first house in a second-tier area, because that's what I could afford. I put a lot of sweat equity into it. It was also a rental. I received no extra tax breaks, and no insurance windfall. When I sold it eight years later, I barely broke even.

But I learned a ton and that education proved priceless. I am FIRE now because of excellent real estate gains on subsequent properties in much more expensive markets. I only had the confidence to enter them because of what I learned on that first house.

You can learn from this experience and profit from that knowledge, but what you cannot do on this forum is act entitled, blame others, and generally exhibit troll-ish tendencies on multiple threads. Those kind of shenanigans are not rewarded here in mustache land. Without a substantial change of attitude on your part, you simply won't last here. Now, is that an accurate barometer of how well you're going to succeed in life your quest for FIRE? Can't say for sure, but I wouldn't bet against it.

[Dicey tips hat to @waltworks as she exits the thread.]

I learned a lot from this property.  At least I made the mistake on a lower prices property and l know how to proceed with other ones and can say from this mistake, never again!  My home now is what my wife insisted on and it is in a top notch school system in a neighborhood.  I wasn't aware folks really want neighbors, but little did I know...  In fact, my biggest worry with my residence is that someday the schools may not be as highly rated, and the value will go down.

I don't want to seem stereotypical, but the Millenials and high school kids in my neighborhood seem very entitled.  I am not.  I apologize if I offended anyone, but I had the attitude that I grew up with nothing, which I basically did, and I'm getting this degree to make a killing.  Doesn't matter what my degree is, just shut up and pay me a lot.  Didn't work that way!  I am still paying for that massive mistake.  The take home message is study engineering.  Had I done so I could have a very short commute with a much better salary.

Those who knew me in college asked many times what I would do with my degree.  That should have been a sign.

MrBojangles

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Re: Anyone try to sell a property lately?
« Reply #58 on: January 08, 2019, 11:15:58 AM »
My parents and their friends recently put their houses on the market, and it was quite shocking how bad their listing looked on Zillow and other online search tools used by those Millennials*. In addition to the realtor-taken crappy pictures, both also seriously understated the top-line square footage relative to other houses in the market by not counting finished basement area when other in the market counted it. Since MrBojangles has only gotten a handful of showings in many months, I'd suggest taking a close look at how the house's listing compares to other in the market.


*Get off my lawn you damn kids!

One HUGE thing going against me, I think, is assessed value of 50% is what taxes are based on.  My listing had taxes at 100%, so double actual taxes.  This will be corrected when I repost.  I surely hope folks saw the high taxes and moved on.  Do they?  Or do they look at a house first and then decide based on taxes and other factors.  My realtor should have caught this egregious error.

BicycleB

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Re: Anyone try to sell a property lately?
« Reply #59 on: January 08, 2019, 11:26:08 AM »

I wasn't aware folks really want neighbors, but little did I know...  In fact, my biggest worry with my residence is that someday the schools may not be as highly rated, and the value will go down.

I don't want to seem stereotypical, but the Millenials and high school kids in my neighborhood seem very entitled.  I am not.  I apologize if I offended anyone, but I had the attitude that I grew up with nothing, which I basically did, and I'm getting this degree to make a killing.  Doesn't matter what my degree is, just shut up and pay me a lot.  Didn't work that way!  I am still paying for that massive mistake.  The take home message is study engineering.  Had I done so I could have a very short commute with a much better salary.

Those who knew me in college asked many times what I would do with my degree.  That should have been a sign.

@Mr. Bojangles, I hope I'm not being offensive here, but it strikes me that there a meta-lesson here that you could learn to your advantage. It seems that you normally overlook situational elements that relate to common social responses. Your path of logic has many aspects that diverge from the ordinary person's outlook, without you realizing it. Diverging from the common path is great if you turn it to your advantage, but since you often don't recognize the divergence on your own, you make mistakes that most people wouldn't. I think the thing to recognize is that this is a probably a global issue in your life, not a situational rarity, and that you should therefore attempt to account for it when making decisions.

For example, assuming that your wife's approach is more "normal" - more alert to standard social cues - then including her input your process would be very wise. So, congratulations on buying your own new home in an area that she liked. Similarly, consider reading extensively about what other people find to be effective in investment situations, and include an extra procedure to get their opinion about the parts you don't understand. In other words, before you spend money, don't just assume you found a good deal - assume it's a bad deal where other people know the reason it's bad, but you don't, and ask why it's bad. I think that doing this will reduce the number of costly surprises that you experience in the future.

I have experienced similar things, so please don't be offended. Anyway, good luck.
« Last Edit: January 08, 2019, 11:31:34 AM by BicycleB »

I'm a red panda

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Re: Anyone try to sell a property lately?
« Reply #60 on: January 08, 2019, 11:50:42 AM »
How low do you go?  Where else on the East Coast can you have a house with a brand new kitchen and floors, 3 bedrooms and an office, and a 1 1/2 bay garage, and more, for under $200k?  The area isn't horrible, either.

The reason that housing prices are low is because demand is low. Wages, local/regional/state econimic outlook, geography, weather, educational opportunities, availability of inventory, style of housing, and fairy dust all combine to drive prices. I'd wager that not much has changed with respect to any of these factors since you bought the house. What has changed is your expectation. Sorry, a single person's expectation is not a market driver.

Yes not a desirable area.  Why?  Not sure.  Homes look nice nearby, mostly, but not exciting.  Not really walking distance to a library, businesses are within a few miles.  Better to drive, but could walk it.

I AM thinking of letting it go at a slight loss.  Homebuyers credit I got could offset some of this, although I counted on it as money in the bank.

Fortunately an insurance check paid for these renovations...well, about 80% of it.  Was hoping to get back my investment...
Wait! You got the credit, and insurance money. Perhaps if you calculated what you actually have into the property, you'd discover a better outcome than you're complaining about. You seem butt-hurt that the straw you spun didn't turn to gold. Sounds just like the entitlement you accuse milennials of.

I bought my first house in a second-tier area, because that's what I could afford. I put a lot of sweat equity into it. It was also a rental. I received no extra tax breaks, and no insurance windfall. When I sold it eight years later, I barely broke even.

But I learned a ton and that education proved priceless. I am FIRE now because of excellent real estate gains on subsequent properties in much more expensive markets. I only had the confidence to enter them because of what I learned on that first house.

You can learn from this experience and profit from that knowledge, but what you cannot do on this forum is act entitled, blame others, and generally exhibit troll-ish tendencies on multiple threads. Those kind of shenanigans are not rewarded here in mustache land. Without a substantial change of attitude on your part, you simply won't last here. Now, is that an accurate barometer of how well you're going to succeed in life your quest for FIRE? Can't say for sure, but I wouldn't bet against it.

[Dicey tips hat to @waltworks as she exits the thread.]

I learned a lot from this property.  At least I made the mistake on a lower prices property and l know how to proceed with other ones and can say from this mistake, never again!  My home now is what my wife insisted on and it is in a top notch school system in a neighborhood.  I wasn't aware folks really want neighbors, but little did I know...  In fact, my biggest worry with my residence is that someday the schools may not be as highly rated, and the value will go down.

I don't want to seem stereotypical, but the Millenials and high school kids in my neighborhood seem very entitled.  I am not.  I apologize if I offended anyone, but I had the attitude that I grew up with nothing, which I basically did, and I'm getting this degree to make a killing.  Doesn't matter what my degree is, just shut up and pay me a lot.  Didn't work that way!  I am still paying for that massive mistake.  The take home message is study engineering.  Had I done so I could have a very short commute with a much better salary.

Those who knew me in college asked many times what I would do with my degree.  That should have been a sign.

Your posts throughout threads have made you seem extremely entitled. This can't possible be a millennial/high school kid problem (and presumably also college kid- as most millenials are now done with college; aging 22-37).   I think people, or perhaps Americans have entitlement issues.

maizeman

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Re: Anyone try to sell a property lately?
« Reply #61 on: January 08, 2019, 11:55:47 AM »
Good point @i'm a red panda.

It's about time a new name emerged for the next generation of folks born in the late 1990s and 21st century. I remember being college and people still using "generation y" as a placeholder but once millennial started showing up it rapidly gained widespread adoption.

I haven't heard a good name for the post-millennial/generation z folks yet, but hopefully something will pop up soon so that people will be able to continue to complain about kids-these-days. ;-)

jim555

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Re: Anyone try to sell a property lately?
« Reply #62 on: January 08, 2019, 12:01:57 PM »
GenX here, cynically hating things in general.

Bracken_Joy

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Re: Anyone try to sell a property lately?
« Reply #63 on: January 08, 2019, 01:14:53 PM »
Good point @i'm a red panda.

It's about time a new name emerged for the next generation of folks born in the late 1990s and 21st century. I remember being college and people still using "generation y" as a placeholder but once millennial started showing up it rapidly gained widespread adoption.

I haven't heard a good name for the post-millennial/generation z folks yet, but hopefully something will pop up soon so that people will be able to continue to complain about kids-these-days. ;-)

Gen Alpha is what I've heard for post gen Z.

Bracken_Joy

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Re: Anyone try to sell a property lately?
« Reply #64 on: January 08, 2019, 01:15:15 PM »
Good point @i'm a red panda.

It's about time a new name emerged for the next generation of folks born in the late 1990s and 21st century. I remember being college and people still using "generation y" as a placeholder but once millennial started showing up it rapidly gained widespread adoption.

I haven't heard a good name for the post-millennial/generation z folks yet, but hopefully something will pop up soon so that people will be able to continue to complain about kids-these-days. ;-)

Gen Alpha is what I've heard for post gen Z.

CSuzette

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Re: Anyone try to sell a property lately?
« Reply #65 on: February 02, 2019, 05:45:41 AM »
My sister is redoing an old house in New England right now. Design is everything. Your description of granite counters and oak floors worries me. Granite is kind of out right now. And I am not sure that Victorians used oak. Good luck whatever you decide to do.
« Last Edit: February 02, 2019, 05:49:18 AM by CSuzette »

maizeman

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Re: Anyone try to sell a property lately?
« Reply #66 on: February 02, 2019, 08:14:55 AM »
Out of curiosity, what is in now for counters now that granite is out?

Dicey

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Re: Anyone try to sell a property lately?
« Reply #67 on: February 02, 2019, 08:27:38 AM »
Out of curiosity, what is in now for counters now that granite is out?
Quartz mainly. Other options such as marble, concrete or butcher block are out there, but in much smaller percentages. They're all expensive, whether up front or in higher labor costs and effort to maintain.

And they call quartz "natural stone", but it's man made.

Bracken_Joy

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Re: Anyone try to sell a property lately?
« Reply #68 on: February 02, 2019, 08:35:44 AM »
Out of curiosity, what is in now for counters now that granite is out?
Quartz mainly. Other options such as marble, concrete or butcher block are out there, but in much smaller percentages. They're all expensive, whether up front or in higher labor costs and effort to maintain.

And they call quartz "natural stone", but it's man made.

Yep, I was gonna say quartz, butcher block, or concrete.  I can definitely see the appeal of quartz over granite, particularly since granite needs sealing and all that. And you can get a wider range of colors in quartz. It's like 90+% natural material suspended as a composite, right? I think the environmental impact is supposed to be lower since it's not slab based.

maizeman

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Re: Anyone try to sell a property lately?
« Reply #69 on: February 02, 2019, 09:11:01 AM »
Thanks! Looked up some pictures of quartz countertops and I'm guessing I've been seeing those for years in passing and assuming they were granite. SMH at the though low maintenance wouldn't be a top priority for most people when it came to picking kitchen counters.

FIPurpose

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Re: Anyone try to sell a property lately?
« Reply #70 on: February 02, 2019, 12:10:01 PM »
Out of curiosity, what is in now for counters now that granite is out?
Quartz mainly. Other options such as marble, concrete or butcher block are out there, but in much smaller percentages. They're all expensive, whether up front or in higher labor costs and effort to maintain.

And they call quartz "natural stone", but it's man made.

Yep, I was gonna say quartz, butcher block, or concrete.  I can definitely see the appeal of quartz over granite, particularly since granite needs sealing and all that. And you can get a wider range of colors in quartz. It's like 90+% natural material suspended as a composite, right? I think the environmental impact is supposed to be lower since it's not slab based.

Not only that, but I feel like every home that I've seen granite, it seems like they pick the gaudiest mismatched granite. I'm more of a butcher block/ concrete person myself. At least with a solid color you can make it work with different backsplash.

But more so, all the house listings I see keep making a point of "granite countertops". It's not a big appeal to me. I think my parents' generation really wanted to have something better than the cheap particle board/ plastic counter tops that went into every cookie-cutter house in the 80-90's. But with modern quartz and concrete techniques you can get a high quality counter top with custom colors for far less which means people aren't going to pay a premium for granite. If buyers don't care whether it's concrete or granite, it means you're not going to get a price bump for putting it in.

Personally I'm house shopping right now. The trends I'm seeing:

1. Any house over 2,000 sqft and 20 years old or older, have to give a pretty steep price cut. (The area I'm looking at has to sell large houses about $20-30/sqft cheaper.) The next generation just doesn't have a need for a 4-5 bedroom house. Taking on that much house is a burden, not a benefit. And even spendy people can be a bit anxious about buying too much house.

2. People aren't into remodeling. And we're turning into a buyer's market right now too. So the number of flippers out there is way down. A house that needs a kitchen/bathroom remodel will have to discount heavier than the price of the remodel.

3. Natural lighting is a huge plus. It seems that homes built in the 70-90's have little to no natural light. The much older homes and newer homes have much more. Along with this is open floor plans. Opening up a ceiling port or putting a bigger window out front might really help brighten up the house.

4. People don't want huge yards. (Though personally I'd like something, so I'm avoiding the new constructions with 0 backyard. The whole point of a house would be to have a garden/ other personal greenspace desires)

jpdx

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Re: Anyone try to sell a property lately?
« Reply #71 on: February 04, 2019, 12:53:11 AM »
Millennial here, and I'm not afraid to work on my house, in fact I do it constantly.

I would be afraid of buying a house with a 4 out of 10 school rating. I would rather pay an extra 50-100k for a house in a great school district because that's a bargain compared to private school. This is often a top consideration for any young family.

Other location considerations that many millennials are looking for: walkability, and proximity to jobs, culture, and good food to name a few.

Jon Bon

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Re: Anyone try to sell a property lately?
« Reply #72 on: February 04, 2019, 05:36:00 AM »
My opinion? The recent tax reform.

The 24k standard deduction pretty much wipes out the advantage of having a mortgage. Folks are starting to file their taxes, they are NOT seeing their tax return increase as they input the mortgage interest. The standard deduction still gets them more back.

All other things equal this is going to reduce  demand. 

Disclosure: *Not an economist*

Another Reader

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Re: Anyone try to sell a property lately?
« Reply #73 on: February 04, 2019, 06:29:36 AM »
Tax reform makes little difference for most people buying $300k houses.  The deductions are similar, they are just not itemized.

The market segment tax reform impacted was the high end.  The interest deduction is limited to a mortgage amount of $750,000.  The SALT deduction limit is huge for states with high income and/or property taxes.  The SALT deduction starts making an impact at a much lower level in high income and property tax states.  If you have a $400k house, are paying 2.5 percent in property taxes and $10k in state income taxes, your taxable income just rose by $10k.  It goes up from there.

Jon Bon

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Re: Anyone try to sell a property lately?
« Reply #74 on: February 04, 2019, 06:49:19 AM »
Tax reform makes little difference for most people buying $300k houses.  The deductions are similar, they are just not itemized.

The market segment tax reform impacted was the high end.  The interest deduction is limited to a mortgage amount of $750,000.  The SALT deduction limit is huge for states with high income and/or property taxes.  The SALT deduction starts making an impact at a much lower level in high income and property tax states.  If you have a $400k house, are paying 2.5 percent in property taxes and $10k in state income taxes, your taxable income just rose by $10k.  It goes up from there.

How do you figure this?

I pay 10k ++ in interest and property tax, I still take the standard deduction. I would need to pay more then double that to itemize and thus get any benny from paying all that mortgage interest.

Therefore there is zero taxable benefit from paying mortgage interest on most houses less then 500k. Before when you paid 5k of interest you were able to save a few bucks. For as long as I can remember buying a house was always a way to shield from taxation. It now no longer is.

Ok I think I hear what you are saying rereading it. In most situations the net tax paid is the same. Just standard versus itemized. Yes I agree with that. But when Joe tax payer files 2018 taxes, puts in his mortgage interest and his return does not move that is something he pays attention to. Buying that house in 2019 wont save him any more on tax, he does not buy a house in 2019. Real estate no longer has a tax benny, thus making it less attractive in aggregate. Thus reducing demand and prices.


Its one of those things when you read about it your like oh ok, that's fine. But when it comes time to file and you see the direct impact on your own bottom line it gets your attention in a hurry!

*full disclosure: I totally just filed and was like, oh wow this IS different!






Another Reader

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Re: Anyone try to sell a property lately?
« Reply #75 on: February 04, 2019, 07:36:33 AM »
The heat of the market depends on the location.  Are you in Tempe, Chandler, or Gilbert Arizona?  Houses in decent condition and properly priced sell within a couple of days if they are under $330k.  The market heated up the second week in January.   People are pushing $5-$10k above the last comp and getting it IF the house has the decor and features buyers want.  The market depends on employment and interest rate.  Taxes in this market are of no importance.

Silicon Valley where I live?  Sales slowed last Fall when interest rates shot up.  They have improved a bit, especially under $1.2M, but high prices and the consequences of tax reform are having an impact.