Is the timing right for Southwest Florida buyers?
With the tax reform affecting the tax deduction in high end markets in states like New York, New Jersey and Illinois, we may see a surge in home buying activity in Southwest Florida. Those states in particular where homeowners were able to deduct all of their property taxes will only be able to deduct a maximum of $10,000 due to the tax changes Congress voted for at the of 2017. A third of the property owners in New Jersey for example pay over $10,000 in property taxes, so the effect is quite significant.
This cap on property taxes may be a strong force in sending more buyers to southwest Florida. According to Dr. Lawrence Yun, Chief Economist for the National Association of Realtors, "Florida already is a net-positive migration center," referring to more people moving here than moving out of the state. Wealthy and retiring people from other states will be moving to southwest Florida to benefit from the tax reform, he says.
Other considerations to affect our real estate market are the creeping up of mortgage rates. On March 1, mortgage buyer Freddie Mac reported that the average rate on a 30 year fixed mortgage climbed to 4.46 percent from 4.43 percent the week prior.
2018 may be an economists dilemma - declining resale inventory, rising interest rates, low inventory of new construction, median prices up and add the increase in out of state buyers, it ought to be a very interesting mix.
Better stake your claim!