This talking-head guy was trying to create a ruckus about the new limit on SALT deductions being the cause of the real estate slowdown, but he backed into what will be the real effect.
Higher mortgage rates and the limit on SALT deductions might keep those who are money-conscious from moving up, which means fewer higher-end sales.
But fewer sales don’t automatically mean lower prices.
The affluent pay the price to get the home they want, and those not so fortunate lower their sights and buy a cheaper house (which is very unlikely if you’ve ever looked at million-dollar houses and then try to price-down and consider those in the $800,000 range).
These guys want to put labels on it like The New Normal, but home sellers will adapt the old normal – pay my price or close, because I’m not giving it away:
Fleming: This is the new normal for the housing market from CNBC.
Doomer Diana then reported that October sales were up 1.4%, ignoring that there was one extra business day in 2018 – which blew her chance to stomp on housing some more. She did quickly get to Yunnie comment – “In no way is housing on solid ground at the moment”, and that the realtor confidence index was at a four-year low.
http://www.cnbc.com/video/2018/11/21/existing-home-sales-rise-1-point-4-percent.html
Don’t expect to hear any in-depth analysis from her, NAR, CAR, or anyone within the REIC. All they do is report a number, and tell you it is good or bad.
SALT won’t make any difference until the upper middle classes start their 1040 submissions mid February and then even it will be months before they act. It will impact but it will be slow motion.
I dont agree with you – SALT and the mortgage deduction limit will matter…in the long run. In the short run sure but over a longer period of time SALT will impact the state. For those in the position of setting up a business that is location independent, the SALT deduction removal will push them away from California.
It’s silly to say these changes wont matter at all, that’s like saying the cost of something doesn’t matter to the wealthy.
Phil Mickelson still lives here. I rest my case.
And watch yourself. There is nothing silly going on here.