Real Estate News 12/17/18

REAL ESTATE NEWS
 The housing market is showing several signs of slowing, providing a much-needed break for potential buyers who have been waiting to jump into the market. Existing-home sales were 2.4 percent lower in the third quarter than a year ago, and the drop comes at a time when many areas are starting to see an uptick in new listings. Home prices in many markets are no longer rising by double digits—or even single digits—annually. But with a strong economy and low unemployment, the housing dip is more of a rebalancing of the market than a sign of a downturn, housing analysts say. Sellers are realizing there is a slowdown and are starting to cut their prices to better compete. Nearly 29 percent of listings in major markets during the month ending Oct. 14 saw price reductions, according to the real estate brokerage Redfin. “The cycle has moved from seller-advantage to at least mildly buyer-advantage in many parts of the United States,” writes Kenneth Harney, a nationally syndicated real estate columnist. “If you’re a buyer, take your time. But keep in mind: If you shop diligently, this fall could be a smart time to catch a deal—a marked-down price on the house you really want.” Source: The Washington Post

The IRS published rules on the 20 percent business income deduction that was created as part of last year’s tax reform law. The rules are a win for real estate because they make clear that broad limitations included in the law will not apply to real estate professionals. Under the new law, individual owners of sole proprietorships, including independent contractors and owners of S corporations, LLCs, or partnerships, can take the 20 percent deduction on their net qualified (non-investment) business income. The calculation will depend on income thresholds, what type of business you own, and how you meet certain wage and qualified property tests. But the basic structure is very favorable to you as a small business or independent contractor. The new deduction is available for tax years beginning after Dec. 31, 2017. You’ll be able to claim it for the first time on the 2018 federal income tax return you file next year. It’s a complicated provision, and how it works for you will depend on many factors unique to your business structure and your income. Consult with your accountant or tax attorney on how this deduction should be applied in your situation. Source: DSNews

Consumers should expect home sales to flatten and home prices to continue to increase, though at a slower pace, according to a residential housing and economic forecast by Lawrence Yun, chief economist at the National Association of Realtors®. "Ninety percent of markets are experiencing price gains while very few are experiencing consistent price declines," said Yun. "2017 was the best year for home sales in ten years, and 2018 is only down 1.5 percent year to date. Statistically, it is a mild twinge in the data and a very mild adjustment compared to the long-term growth we've been experiencing over the past few years." Yun added, "Most states are reporting stable or strong market conditions, housing starts are under-producing instead of over-producing and we are seeing historically low foreclosure levels, indicating that people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust." With a few months of data remaining in 2018, Yun estimates that existing-home sales will finish at a pace of 5.345 million—a decrease from 2017 (5.51 million). In 2019, sales are forecasted to increase to 5.4 million, a one percent increase. The national median existing-home price is expected to rise to around $266,800 in 2019 (up 3.1 percent from 2018 this year and $274,000 in 2020). Source: National Association of Realtors® 

 

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