This -

A lot of the 'Trumpster Republicans don't get this' in NJ:

finally, the limitation on state, local, and property taxes to $10,000.


It's all combined. Wait until they do their taxes in 2019. And then they realize . . .

Oh wait - my Christie state taxes are not deductible?
You mean it was BOTH by property and state income limited to 10K.

That's what I've understood all along.

Why don't they?

You actually know the facts. They watch Faux News.

are you saying the 10k is not just our property but also includes our state income tax?!!! say it isn't so

how could anyone support this plan. I don't understand where is my tax break

...they might be able to recoup most of their losses before the big crash??

i imagine they'll be more or less fine, or at least, yes, not hurt by more than their huge tax breaks.

it's the residential side that will be whacked.

but it was a few months ago.

But, when that bubble bursts, so will the stock market. I can't recall a time in history when it hasn't happened?

In this whole town there aren't more than a couple in that price range, and that's true for most of the towns in most of the states.

My house in rural western PA is worth half of my brother’s Los Angeles house and is twice the size. In some urban areas, $750,000 is a starter home.

there are quite a lot of houses in that range in those areas.

other areas aren't nearly as affected, at least not initially.
the question is how far does it spread.

Good, we need to move people out of the citites so we can teach their kids about jesus and how do not get on welfare..

I'm agreeing here. I think they would say that, but it is really stupid, ain't it?

We bought a maintained historical home that need a lot of updates. We bought under 50K asking - and now with just a few years into the marathon - with at least another and half years to go - our home is valued about 300K over what we bought it at.

Hunterdon County NJ (Lance's district) is one of the 'wealthiest' in America.

Thing is - to get the 20% down payment - you have to save for many years.

You would be lucky to find any house in California under 100k.

In the bay area under 500k would be a find.

In Vegas the median is 250k

The median home price in the US as a whole is 200k.

Where you live there are few houses over 100k? Curious where you live, we have been considering moving for quite some time and finding affordable housing has been what has kept us from doing so.

Upper Michigan

Of course I kid......actually, maybe me....I had always eyed Wisconsin for retirement but now, I just don't even recognize that state. I just want to live somewhere that has real SEASONS. I spent a bit of time in Michigan as a teenager and remember it fondly.

While I don't much care for winter, it makes me appreciate spring so much more. Fall is my favorite, especially after a hot summer, and people travel up here just for the colors.

Joints and seasonal affective disorder...

many that currently itemize their deduction. They will find that any tax cut will not be realized by many of them in that category, and in fact will instead pay higher taxes than they do now.

In states like California you have multiple family members working to support the mortgage. A lot of folks also have home equity loans to help finance their children's college, medical expenses, or home improvements. In those large blue states where SIT and property taxes are significant, that combined 10000 dollar deductible limit will have greater impact on those that currently itemize those deductions.

While this may not have much impact on those who bought many years ago, first time buyers in large blue states may find it even more difficult to get into a house and afford college.

Another thing almost completely ignored is what the impact this will have on charitable deductions.

For those who own a business, many will be able to take 20% right off the top of their net income from that business, so those in that category who itemize deductions, would be less likely to be hurt by the removal of the personal exemption, and may actually benefit.

The truth is though, this is going to create massive deficits, and in the end cause most people to pay far more in taxes down the road, pay increased medical insurance premiums, and the higher interest rates that will result will likely cause a major economic slowdown.

It is very doubtful that the tax bill will motivate significant job creation. Jobs are created when demand for products and services occurs, and tax breaks to corporations are not going to do that.

Like the failure Reaganomics was, which later resulted in higher taxes later because of the massive deficits that were created from it, there is no doubt a similar occurrence will occur with this monstrosity. The real concern that many should have though is not that they will increase taxes to pay for this folly, but cut programs such as Social Security and Medicare, which people have being paying into for decades, and will now be STOLEN to pay down the deficit that will be created from this irresponsible tax bill

about these tax changes.

In Los Angeles the real market for starter homes is between contractors (a corporation that still can make these deductions), foreign investors, and you. The other two usually can make all cash offers and you rely on a loan and the tax deductability of SALT and mortgage...

I'm not sure prices will drop so much as I'm darn sure ordinary Americans will be priced out of the market. America is becoming a place of the land owning gentry and the renter class. It's not just the poor anymore. More and more middle class Americans find themselves trapped being renters. This will only make it worse.

more than $100,000.

Even apartments here are worth more than that.

And we are not just a small part of the country. Over 69 million people in California. There may be a few locales with cheaper housing in our state, but most of us have to live in very expensive housing or on the street. That's the choice.

Young people live at home or with roommates. We have thousands of homeless people living outdoors or maybe in campers or their cars.

The tax bill will hurt many, many people.

Where in the world did you get that number?

The population of that state is actually a bit under 40million.

I'm sure in 50 years California will have 69 million people, assuming no global population crash, but not yet.

United States' population is 323.1 million (2016) so California is more than 10% of the population of the United States.

Sorry about the mistake regarding California's population. Thanks for catching me.

Nevertheless, California has about 12 % of the population of the United States but only 2 percent representation in the Senate and, with 55 of 538 votes in the electoral college, only about 10.2% of a say in the presidential election.

And now these rubes from the less populated Midwest, West and South are pulling this tax trick on us.

It's bad enough that we don't have enough housing. Now they want to make it even harder for people to buy homes

That is utterly unjust. But justice has a way of asserting itself.

NY, it is very easy to find homes at that price or higher.

it's valued at around $930,000 on various real estate sites, She paid around 40,000 way back in early 80s.
BUT, if you want to sell and move in Los Angeles, you can only either go sideways to something exactly like you had, for the same price, or get a new mortgage and buy something bigger.
The only way you can really profit from it is to move somewhere with much cheaper houses.

$750,000 houses here get snapped up because there are so few in that "low" range.

And people spend a great percentage of their income hoping housing prices rise and it ends up worth it. Apartment dwellers often have another 700/1k a month in maintence fees. It is crazy. But it’s Home.

Suffice it to say that predicting another crash based on tax breaks for luxury homes being less.....is an exaggeration.

In my area (Florida) a bigger problem is house prices rising to a point where many folks simply cannot afford to buy anything except a shack.

granted, in most rural areas, this would have to involve huge acreage.

but in san francisco, median home price is substantially above $1 million.


i'll grant you "crash" might be a bit on the hyperbolic side. in fact, a housing prices only need to go down by the amount of the tax break before the whole thing is silly even for many who may think they benefit.

it doesn't take a crash to wipe out a few thousand dollars in tax breaks.

We bought a 100 year old house - that had two prong plugs.

We've worked to restore it/bring it up to date for the past 4 years.

This is Central NJ.

even a poor neighborhood) in Los Angeles sold for $500,000 and the buyers are bragging about what a good deal they got.

69 million Californians would disagree with you.

The tax bill is aimed at blue states like New York and California.

Of course, the Republican voters who tend to be more affluent than the rest of us will be hit the worst. So it's going to be funny when they wake up and realize that while they get a tax break on one end, they pay through the nose on the other. I hope they wise up to the Republican scam.

And no, housing prices will not go down much in California for very long. Maybe temporarily. But you just can't build enough housing for all the people who want to live in this great BLUE state.

One of their long-term goals is to turn us into a rental society. They are sitting in boatloads of cash waiting to snap up real estate to profit from turnover and rentals.

These new tax measures may put pressure on young folks to rent rather than buy, thereby destroying the American dream of ownership.

Also, I would bet this bill improves the tax situation for those owning multiple rentals.

and yes, the pass-through provisions will help them do exactly this.

They are almost always there if one digs a little, and are always beneficial to the wealthy. Yet, they always find a way to put white icing on the black cow pie for their base.

Zip code 12520

On top of prices being high, taxes are high too. On my very average $300,000 house I pay more than $12,000 a year in taxes. Most people in my town pay at least that.

By the way, my town went to trump in 2016.

I live in a city that many claim is so expensive that no one can possibly afford to live here, and my home comes in pretty close to that number.

I have never understood why people rely so heavily on a tax deduction when buying a home. You should be able to afford the payment without a tax consideration.

About 25 years ago my husband and I backed out of a home purchase that was going to require a balloon payment in about five years. We'd put down earnest money, come to price agreement, gotten the mortgage. With the balloon payments. Then we had second thoughts and called the realtor to say we wanted out and that we understood we'd forfeit the earnest money. She was a great realtor and immediately resold that house for a bit more money and we got our earnest money back. And a couple months later we bought a different one through her, one we could afford.

I honestly don't comprehend how regular people can possibly afford the home prices in certain parts of the country.

That's how we do it.

I was thinking about how Paul Ryan was chiding people for not having enough children. Young people cannot afford to get married, buy a house and have children. That is the problem.

I talked to the son of one of my friends last night. He gets by with earnings from about 3 part-time jobs. He is very intelligent and hardworking, but he has not found a "steady job" that can pay him enough to live near his aging parents. His father is quite ill and needs his son.

Republicans have no idea.

Californians don't have much of a voice in either the Senate or the electoral college, so we get taken by the smaller states.

The real cost of not being able to deduct an extra $10,000 in local taxes is about the same.

Very few people who can afford that kind of house or live in a high cost area are going to flip out over $500 - $600 a month. For sure, some on the margin might, but not many in total.

One could argue that the country will be better off long-term concentrating on building less expensive housing anyway.

Besides, maybe it will be good for some of the higher income people to feel a little pain like the rest of us.

it's not really a matter of anyone flipping out, as i believe existing mortgages are grandfathered in.

however, people in affected markets will have a tough time when they go to sell their home. they may not even realize it, but they may very well lose all their tax breaks when they sell their how for tens of thousands less than they otherwise would have.

No idea.

We are the fifth largest economy in the world, but we have at least 35,000 homeless people in Los Angeles County per night.

The weather is relatively mild, but housing prices are astronomical. And Wall Street wealth came in after the 2008 crash and had a hay-day buying up cheap properties then renting them for high prices. Gentrification they call it.

The Republican tax bill will earn its own "reward" or punishment. It will be a disaster. Thoughtless, selfish, inhuman beings wrote that bill. They call them Republicans.

high cost of $1,000,000 homes down a notch.

I don't see the fact that interest on new loans over $750K is no longer deductible will make anyone homeless.

I just don't think this tax plan will hurt that many people who can afford a $750K house, high property and income taxes.

The tax plan will hurt us in other ways long-term, but mostly people who depend on the safety-net, ACA, etc. They ain't worried about a $750K mortgage.

older, all living at home because they can't get jobs that pay enough to allow them to rent their own apartments or even rooms. (I forgot to mention that she is a TEACHER on a modest salary.) Their house is probably now worth close to a million, although it was only worth about $140,000 when they bought it years ago and has just over maybe 1500 square feet.

The whole family with the exception of one child who lives on campus at her college, lives in that house. Not by choice but rather because housing is so expensive in Los Angeles that there is no other place to go.

Next door to us, our neighbor rents out rooms.

We have a garage. People come by and ask us if they can rent it. Our house which we bought in 1988 on the GI bill (less than $125,000) has increased in value many times over the past 30 years.

Prices for housing in Los Angeles are so high DUE TO DEMAND. There just isn't enough housing. Again, we have at least 35,000 to 36,000 (I've seen a number in the 60,000s) EVERY NIGHT in Los Angeles County.

I used to work for a homeless project. The housing demand here is high because the economy is good and the weather dry and warm. We have beaches and mountains. It's beautiful.

People want to live here.

I don't know where you live, but trust me, housing prices here are due to the market forces and demand. They are building lots of apartments, but the prices are astronomical. Just check out ZILLOW if you don't believe me.

Here are the prices in South-Central Los Angeles

https://www.zillow.com/south-los-angeles-los-angeles-ca/houses/

And here are the prices in Glendale, Los Angeles County

How about Glendale, California -- in Los Angeles, rather middle class:

https://www.zillow.com/homes/Glendale,-California_rb/

For contrast, here are Malibu prices:

https://www.zillow.com/homes/Malibu,-Ca_rb/

A lot of Republicans are going to be hurting thanks to this Republican tax bill.

My husband and I bought our house long ago and own it outright, so we won't be affected. We are retired. At worst, we stand to lose paper value on our house. But since the tax bill will probably put a damper on new housing development including condos and apartments, the value of our house could rise.

Affordable housing is a necessity of life as is healthcare.

Republicans have rubbed their noses in it with this tax bill.

If one can't afford a $3,000 apartment in Gendale, they can't afford a $750,000 - $1,000,000 house either.

How again will the tax plan affect the teacher with 5 kids all living at home? I get her house might go down some in value, but not a lot. And like you say, it might go up as builders start focusing on slightly more modest homes. Truthfully, if that is her economic situation, it's time to sell the place. Most people have had to sell stuff they loved before for economic reasons, and I suspect most have.

Heck, I'd like to live there. But I have to admit, I can't afford it. So, I'll live somewhere else. In fact, I getting ready to move further out to less expensive digs in preparation for retirement if I ever can. I realize that's tough for some people, but a teacher has lots of options and can move to more financially viable situation.

Finally, I would love to live in Malibu. But I don't think most voters -- Democrats or Republicans -- are going to care about them if they lose a bit in home values. They'll make that up with reduction in individual and corporate rates.

I think you are focusing on one aspect of this tax bill, that really isn't where the crud lies for most people.

Lest there be any doubt, I am against this tax bill, but not because of limits on mortgages.

i mentioned 3 provisions, they all matter.

the $10,000 limit, for instance, on state and local and property taxes will affect people in far cheaper houses, as will the elimination of the deductibility of home equity loans.

over $150,000 a year. Let's just say they have $20,000 in state and local taxes. The impact of that is roughly $3,500 or so in taxes. Let's say they take out a home equity loan of $50,000, the really tax impact is less than $1,000.

They probably save a couple of thousand by a reduction in tax rates of 3%.

Of course, they are probably in a house worth at least $350,000 (maybe twice as much) and it probably went up at least 5% in value or $17,500.

Taking it all together, they ought to be smiling.

With that said, the tax bill should have given low income people more and increased taxes on everyone making over $50K or so with it weighted toward upper income with most of increased tax revenue targeted for national deb[/b]t.

How do you think that reality would have gone over?

At least by the time they sell.

But my whole point is that I think these provisions whack home prices, probably by more than enough to wipe out any tax gain.

It's probably a $900+K threshold if you figure buyer puts down 20%.

Not exactly your typical Democratic base except for high income folks who have a heart as well.

Regular homes shouldn't cost that much.

first, it's one thing to say prices should never have gotten so high in the first place.

it's another thing entirely to say prices should crash from those lofty heights.

third, again, this thread and the tax scam isn't just about specifically houses in the $750,000-$1,000,000 range. that's only one of the three provisions i noted in the o.p.

elimination of the home equity interest deduction and the $10,000 cap on state and local taxes will affect people in many cheaper houses.


finally, a crash in any segment of the real estate market is not likely to be well-contained.

But hopefully before I buy.

but generally the economy does well to have things fairly stable.

in the case of the housing market, the good old rule of thumb of 3% growth per year was a very nice thing. those days are gone.

Not as an investment. Who knows what things will be like 30 years down the road? We could all be living under the freeway. So I'm not making any decision based on whether the value will hold or not. Although it would kind of suck to buy a $400K house that was all of a sudden worth $300K.

and now i expect it to get whacked again.

i agree, the primary purpose of a primary residence is to live in it, but you don't want to ignore the market.
it's by far the biggest investment the vast majority of people will ever make, and it sucks when it goes wrong.

imagine working over 20 years and pouring money into a house, mortgage, upkeep, repairs, etc., and have no equity built up after all that because the market crashed.

personally, i'm a huge loser here once you take repairs into account. our boiler and water heater blew three days after moving in! and that was just the start!

is wise as far as it goes, but absolutely should be included.

As an appraiser that location, location, location is the best single investment advice any potential buyer could follow. After that, choose for future potential and against negatives that cannot be removed. Ignore the flooring. It's a fixable problem and, when you're paying $200K, should be way down the list or just plain irrelevant.

And from experience: Life happens. In a wide range of degrees, it happens to most. Always, if at all possible, at least consider properties with the idea that you could just end up spending the rest of your life there, or far more often the next 2 decades, instead of the planned 5-10 years. What appeals then? It may seem repellent, and most move eventually if they want, but things happen and this may not be a flex point. Try to guess how a home would suit in future, even if you'll get much of it wrong and even if it's not your main criterion.

I don't know the figures now, but when I was appraising average home ownership was 17 years. I know for sure more intended to move up than did before then and some romantics imagined they were purchasing their dream home for life and then sold. But life happens.

The similarity between 17 years and the time required to raise children is not an accident.
Sometimes incomes don't rise as expected, sometimes they even fall.
A partner develops serious health problems, medical bills, and/or debility.
Something else puts you in debt for the next two decades.
A parent declines and needs you to stay close by.
You bond with your friends and your life and don't want to move. (Very common.)
You don't want to move your children and can't afford to move up in your school's area. (Very common.)
Price inflation might mean any move up would require sacrifice of other dreams, and not be an economically and personally sensible step, even if still possible.

And, as said, who knows what things will be like 15 years down the road, much less 30?

We are older, no kids, and neither of us has ever owned before. We moved here a couple of years ago and finally moved in together. I'm sick of apartment living, for various reason (a big one is the enormous rent here that only goes up every year, not to mention just living too close to other people). We thought it was time, now I'm not so sure.

Good luck.

Your home, in most cases, is the single most major investment that people have

Real estate is a huge factor in ensuring that your retirement years can truly be "golden".

The equity in your home determines how you spend. It's a huge "safety net" and a key leg of the three legged stool.

My house goes down in value, I spend a shit-ton less money.

House is not worth what it was? I'm not buying a car.

House value goes down? I'm not hiring that guy to fix my deck.

House values not growing? Sorry but I won't buy that product I was going to buy.

Yes, the last retrumplican caused housing crash cost middle America 35 trillion dollars of their net worth most of which then went to the 1%

But hey, I'm glad you might profit from it. Afterall, it's me in my big glorious house that has been keeping you down.

It might stop builders from tearing down good $500K houses, putting up a $400K building, and selling it for $1.2 million.

Which Mrs FarCenter thinks would be a good thing for the community. Me, I like to see those big rateables added to the tax base.

asked us a few weeks ago if we would help him with the down payment on his first house.

I don't know what to do now about advising him to buy a home. Everything is going from bad to worse.

Banks hold mortgages on homes that will suddenly be worth far less than the mortgages. Defaults will lead to yet another banking crisis.

I'm going to be honest and say that tax deductions won't have that big of an impact on the economy - interest rates will.

Besides with interest rates as low as they are, the deductions haven't amounted to much for people with houses whose values are hanging around the median home value, like us.

Thanks to HARP 2.0 we were able to refinance into a 15 year mortgage 6 or so years ago at less than 3% interest (thanks Obama!! - no, really, it's been amazing). We're getting to the tipping point where we'll be paying mostly principal on the loan. Literally, every month we watch the balance go down. I'm thrilled.

One of the interesting side effects is that we have been paying more in taxes for several years now because there is simply less interest to deduct on our mortgage, and also on the student loans we took out on our older daughter's college education.

Add to that our kids are "aging" - they are 14 and just weeks away from 18.

We're probably going to benefit from this tax bill - but I think it's a disaster for all the other reasons which have been discussed here on DU. Unfortunately we have to wait until the chickens come home to roost in 2019.

The fact is, housing prices in liberal-dominated communities are prohibitive for many retirees, not because people love high taxes but because the effects of liberalism on society, business and government makes them desirable places to live. But only current local salaries, usually two, make buying a first home possible for most.

We'll never leave Georgia as long as our kids are here. But beautiful as it is, as nice as our home is, and in spite of the good friends we do have, I really miss the liberalism of the California area we raised our children in. If they moved to a blue state and we could afford it, we might just get there before they did.

And no, this is in no way an endorsement of what is in fact use of government to attack liberal voters and their communities, liberal government and policies, and above all liberalism itself as our nation's guiding ideology.

the prices are lower simply due to tax law making them equally unaffordable.

the market takes with one hand and gives with the other.

assuming the effects are equal. my guess is that prices will drop more than the value of the tax breaks.


long term, there need to be more cities and they need to pack people in more efficiently. there's not really much you can do about san francisco, with such a limited supply and massive demand, except build more. meaning, houses need to be converted into apartment buildings, etc. or find another metro area.

A 10% drop in the price of a $300,000 "entry level" house in a desirably liberal community would be $30,000, $50,000 would move the property into a different market.

Current owners would pay less in property taxes, an especial benefit if taxes are no longer deductible, especially for those who will not be selling and for whom this is all paper money at present.

It would of course hurt people who are about to sell and need the money. Also, those whose debt, whether mortgage and/or borrowed against equity, now exceeded equity would at best be unhappy at their new paper debt, at worst, needing to sell, would find themselves in real debt.

But most might actually be better off. The entry of women into the workplace didn't double the economic wellbeing of families, it exploded the prices of homes -- to once again what the market could bear. Lowering of mortgage rates had much the same damaging, exploitive inflationary effect on home prices.

This inflation, by the way, goes to the land and in itself has little relation to the cost of building.