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This year’s Trophy awarded to Anna Mathieu
The Windermere Cup is Awarded annually for Outstanding Performance in Real Estate and in the Community
“The winner of this year’s Windermere Cup is more than deserving. Anna Mathieu works tirelessly in real estate, protecting and promoting her clients’ best interests. She strives continuously to deepen her knowledge of our profession and is a creative problem solver. Anna is always exploring new marketing techniques and brings a fresh perspective to every transaction. Congratulations Anna” – Dan Gorham, Owner/Broker Windermere Real Estate / SV, LLC
Tax Law: How It Will Impact Idaho’s Home Price Outlook
With the new tax law in effect, NAR has estimated how home prices will trend in 2018. Idaho is in the top five states expected to see an increase in home prices.
While the new tax law is already in effect, here we estimate how home prices will trend in 2018 for each state. The new tax law reduces the limit on deductible mortgage debt and limits the deductibility of the real estate tax up to $10,000. These two provisions are expected to have an impact on the housing market. Moreover, a higher standard deduction may lessen the incentive to purchase a home, as fewer consumers will utilize mortgage interest and property tax deductions.
Aside from the tax reform impact, it is of utmost importance to understand that the current state of the housing market will also influence home prices. Prices are shaped by supply and demand, like any other economic asset. A shortage of supply pushes up prices, while excess supply causes prices to fall. In the past five years, housing inventory has fallen across the country and as a result, home prices continue to rise.
NAR estimated how home prices will change in the upcoming year for each state, considering the impact of the new tax law and the momentum of jobs and housing inventory.
5. Idaho: 5.5%
Nationwide, NAR is projecting slower growth in home prices of one to three percent in 2018. That is a marked slowdown from the five to seven percent annual gains of the past five years. Since all real estate is local, there will be some markets with price gains and other markets with actual price declines. Colorado (5.9%), Utah (5.7%) and Arizona (5.6%) are expected to be the states that will experience the strongest price gains in 2018. However, some local markets, particularly in high cost, higher tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes such as New Jersey (-6.2%), District of Columbia (-4.8%) and New York (-4.8%).
How did we come up with these estimates? First, we determined the main factors affecting the housing market in 2018. Of course, there are a slew of other factors, which have an impact on home prices, but we think that the following four factors need to be considered as driving forces of the housing market in 2018:
- Current housing market conditions and momentum
- New tax law impact
- Interest rate effect
- Employment and construction scenarios
See how home prices will be affected in Idaho by the factors above.