Housing Analysis

[Kings]

My tax LIABILITY went down in 2018 with the new tax law reform.  No point in talking about whether you owe more or less.  It's the liability against your income that matters.  The expanded tax bracket, changes in child credit, and AMT all outweighed the SALT deduction cap for me.

Yeah, so I guess I should have said more clearly.
Does this new tax law make you pay more tax?
Is it making you owning a home less desirable?

Plain and simple. A home is no longer a vehicle to reduce taxes for an average person.

that depends on your definition of "average person".  nobody on this board that owns a home in irvine is the "average person" in america.  the "average person" in irvine who likely pays $10k in property taxes alone might be hurt by the SALT cap, but likely benefits in other changes as woodburyowner said. 

 

[eyephone]

My tax LIABILITY went down in 2018 with the new tax law reform.  No point in talking about whether you owe more or less.  It's the liability against your income that matters.  The expanded tax bracket, changes in child credit, and AMT all outweighed the SALT deduction cap for me.

Yeah, so I guess I should have said more clearly.
Does this new tax law make you pay more tax?
Is it making you owning a home less desirable?

Plain and simple. A home is no longer a vehicle to reduce taxes for an average person.

that depends on your definition of "average person".  nobody on this board that owns a home in irvine is the "average person" in america.  the "average person" in irvine who likely pays $10k in property taxes alone might be hurt by the SALT cap, but likely benefits in other changes as woodburyowner said.

This is why the GOP wanted to another tax cut for the middle class. They talked about it before then midterms, but nothing happened. (false promise) They focused on Kavenaugh and not the middle class tax cut.

 

[eyephone]

CBS Article: Tax refunds so far this year are down by $6 billion from 2018

Individual tax refunds this year have been only slightly smaller than last year, but those shortfalls are adding up. At the end of last month, the amount of money the government refunded was $6 billion below this time last year, according to IRS figures.

As of March 29, the Treasury had issued 71.8 million refunds. This time a year ago it had issued 73.4 million. So while the average refund, at $2,873, is only $20 less than it was last year, about 1.6 million fewer people are getting refunds, the IRS said.
https://www.google.com/amp/s/www.cb...funds-so-far-this-year-are-down-by-6-billion/

 

[WTTCHMN]

Congress could free most Americans from the annual drudgery of filling out tax forms. Instead, it?s trying to lock the current system in place.
https://www.nytimes.com/2019/04/10/opinion/irs-free-tax-preparation-turbotax.html

 

[paperboyNC]

My unofficial observation is that housing activity has picked up considerably in the past few weeks.

 

[Mety]

My unofficial observation is that housing activity has picked up considerably in the past few weeks.

I was actually feeling that as well, but we will see if that holds up after this tax season.

For me personally, not much changed in terms applying this new tax law for the property taxes, but since most of you have $1m+ homes, we'll see where it goes.  ;D

The listing prices are still pretty high in my opinion. Some smart ones listed a little below more like 2017's prices, those are going pretty fast.

 

[Kenkoko]

April - June were the best months to sell in 2018. I think we are still below that right now both in sales volume and price.

Sale price and volume of the next 2 months should give us a read on where we are heading.

 

[woodburyowner]

CBS Article: Tax refunds so far this year are down by $6 billion from 2018

Individual tax refunds this year have been only slightly smaller than last year, but those shortfalls are adding up. At the end of last month, the amount of money the government refunded was $6 billion below this time last year, according to IRS figures.

As of March 29, the Treasury had issued 71.8 million refunds. This time a year ago it had issued 73.4 million. So while the average refund, at $2,873, is only $20 less than it was last year, about 1.6 million fewer people are getting refunds, the IRS said.
https://www.google.com/amp/s/www.cb...funds-so-far-this-year-are-down-by-6-billion/

Probably best to include this line from the article as well....

"Lower refunds don't mean Americans paid more taxes?quite the opposite. Most workers paid less in taxes last year and saw higher take-home pay week in and week out. But for many Americans, a slightly higher paycheck doesn't quite have the same visibility as a single $3,000 check in March or April."

 

[freedomcm]

That last quote is true.  Due to decreased fed withholdings, I actually had to pay the IRS, rather than getting a refund this year.

My fed tax rate went up 0.5% of my income for 2018, all due to loss of SALT on the fed taxes.

 

[eyephone]

That last quote is true.  Due to decreased fed withholdings, I actually had to pay the IRS, rather than getting a refund this year.

My fed tax rate went up 0.5% of my income for 2018, all due to loss of SALT on the fed taxes.

You can thank Mimi on Twitter for that. She voted for the tax cut. (So called tax cut)

Let me tell you this. It was purposely planned out that way. Also, after the tax plan was passed. They talked about another tax cut to help out the middle class before the midterm election. But they did nothing about it.

 

[irvinehomeowner]

CBS Article: Tax refunds so far this year are down by $6 billion from 2018

Individual tax refunds this year have been only slightly smaller than last year, but those shortfalls are adding up. At the end of last month, the amount of money the government refunded was $6 billion below this time last year, according to IRS figures.

As of March 29, the Treasury had issued 71.8 million refunds. This time a year ago it had issued 73.4 million. So while the average refund, at $2,873, is only $20 less than it was last year, about 1.6 million fewer people are getting refunds, the IRS said.
https://www.google.com/amp/s/www.cb...funds-so-far-this-year-are-down-by-6-billion/

Probably best to include this line from the article as well....

"Lower refunds don't mean Americans paid more taxes?quite the opposite. Most workers paid less in taxes last year and saw higher take-home pay week in and week out. But for many Americans, a slightly higher paycheck doesn't quite have the same visibility as a single $3,000 check in March or April."

Thanks for this as I didn't click on the link.

Regardless of how much I owe or get a refund this year, based on previous years, I don't think my taxes have gone up or down significantly. So any tax cuts seems to be canceled out by SALT, but we'll see. The problem is our income goes up every year so it's hard to calculate the real increase/decrease without having to do math beyond looking at line 61(?).

 

[WTTCHMN]

The problem is our income goes up every year so it's hard to calculate the real increase/decrease without having to do math beyond looking at line 61(?).

Don't sound like a 99%-er to me.

 

[irvinehomeowner]

The problem is our income goes up every year so it's hard to calculate the real increase/decrease without having to do math beyond looking at line 61(?).

Don't sound like a 99%-er to me.

Even 99%ers get cost of living raises annually.

 

[qwerty]

The problem is our income goes up every year so it's hard to calculate the real increase/decrease without having to do math beyond looking at line 61(?).

Don't sound like a 99%-er to me.

Why don?t you just look at your effective tax rate for federal? For state and combined?

 

[eyephone]

AOL finance article: NY Fed: Trump's tax cut cause of housing-market dip

President Donald Trump's tax cuts passed in 2017 appear to be partly behind the slowing housing market.
The new law increased after-tax home-ownership costs and reduced incentives to own homes, through measures such as a cap on the amount of mortgage debt on which interest is deductible.

While the tax overhaul came at the same time as higher borrowing costs, the New York Fed said the recent slowdown was more severe than previous episodes when mortgage rates rose by a similar amount.

The housing market has continued to cool this year, remaining a soft spot in an otherwise solid economy. And President Donald Trump's tax cuts passed in 2017 appear to be partly to blame, according to a new study from the New York Federal Reserve Bank.

"Changes in federal tax laws enacted in December of 2017 have contributed to the slowing of housing market activity that occurred over the course of 2018," economists Richard Peach and Casey McQuillan said in the report out Monday, though they added the results weren't conclusive.

"Before the tax law, the incentive to purchase and even trade up was in the itemization of taxes," said Jonathan Miller, the chief executive of Miller Samuel, a real-estate appraisal firm. "The 'reform' aspect of the tax cut replaces the direct messaging long enjoyed by housing."
https://www.aol.com/article/finance...-market-slowdown-new-york-fed-finds/23712103/

 

[eyephone]

How many times have I been right on major issues? To be honest I lost count.

 

[sell4u]

4/17/2019 - Active Irvine Inventory - 810
4/17/2019 - In Escrow Irvine - 315

4/18/2018 - Active Irvine Inventory - 416
4/18/2018 - In Escrow Irvine - 333

Source: MLS

 

[lnc]

4/17/2019 - Active Irvine Inventory - 810
4/17/2019 - In Escrow Irvine - 315

4/18/2018 - Active Irvine Inventory - 416
4/18/2018 - In Escrow Irvine - 333

Source: MLS

Less than 4 month of inventory - price goes up
4-6 month of inventory- no price increase
Over 6 month of inventory - price goes down.

Base on these data with sales of a little over 300 units a month, we need to have close to 1800 listings in orders to see a significant downward pressure on housing prices.

I recalled back in 2007-2008 period, the listing was also reached over 800 units but the sales was down around 110 units per month.

And base on the above data alone with less than 3 month of inventory, we still have an upward pressure on the prices. 

 

[irvinehomeowner]

So are prices going back up?

 

[Mety]

So are prices going back up?

Not really.