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Million Dollar Listing Team
Global Luxury Realty 

1688 Meridian Avenue, Suite 700
Miami Beach  Florida 33139

Homes & Condos Sales:     
239-265-8000

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Real Estate News

Latest Realty News from NAR

Boom or Bust for Spring Homebuying?

Home prices reached an all-time high in most markets in 2018. Homeowners benefited greatly as a result, with their overall net wealth rising by a cool $1 trillion. A typical homeowner’s wealth is estimated to have reached $254,000 while that of a typical renter stood at only $5,000.  Looking ahead, home values are poised to advance further in 2019, albeit more modestly.  However, home sales slumped badly in the closing months of last year. Persistent sales declines are nearly always associated with dampening home prices and homes sitting on the market for a lengthier time.

Read the full article at Forbes >

State and Local Tax Deduction (SALT): The Impact by State

The state and local tax (SALT) deduction allows taxpayers to deduct state and local tax payments on their federal tax returns. The new tax law, called the Tax Cuts and Jobs Act, instituted a cap on the SALT deduction. Starting from the 2018 tax year, the maximum SALT deduction that taxpayers are able to claim is up to $10,000. In contrast, before the new tax law, there was no limit. This blog focuses on what the reduced deduction means for taxpayers, especially in high-tax states like California, New York and New Jersey. However, let’s first understand how the state and local tax deduction works.

What is the state and local tax deduction?

Taxpayers who itemize their deductions, and therefore don’t take the standard deduction, can deduct what they’ve paid in certain state and local taxes. The SALT deduction includes property, income and sales taxes. To be more specific, a taxpayer who itemizes can deduct property taxes but the taxpayer needs to choose between deducting income and sales taxes. Taxpayers of states with high income taxes typically opt to deduct their state and local income taxes while taxpayers of states with high sales taxes typically deduct their sales taxes. Generally, taxpayers deduct property and income taxes using the SALT deduction.

Nationwide, 30 percent of the taxpayers used the SALT deduction, while the average SALT deduction was $12,540 in the 2016 tax year.

How will the reduced SALT affect taxpayers by each state?

Starting with the 2018 tax year, taxpayers’ SALT deductions are limited to $10,000. However, especially in high-tax states, itemizing taxpayers typically pay an amount higher than this limit. Let’s take a closer look at where most taxpayers claim the SALT deduction and how much they deduct on average.

NAR calculated the percentage of taxpayers that used the SALT deduction and the average deduction for 50 states and DC. In the 2016 tax year, the states with the highest percentage of taxpayers using the SALT deduction are in the Northeast and West regions. The percentage claiming the deduction ranged from 17 percent in West Virginia to 46 percent in Maryland in 2016. In the meantime, the average deduction ranged from $5,130 in Alaska to $21,780 in New York.

For instance, more than 40 percent of the taxpayers claimed the SALT deduction in California, New York and New Jersey while the average deductions in these three states were all over $18,000.

SALT deduction by income level

While the SALT deduction is used across all income levels, the amount of SALT deductions by lower, middle, and upper income taxpayers provides insight into how those taxpayers benefit. Nationwide, almost 40 percent of taxpayers earning between $50,000 to $75,000 per year and more than 70 percent of taxpayers earning $100,000 to $200,000 per year used the SALT deduction. For income brackets above $200,000, almost all of those upper income taxpayers claimed the deduction.

When looking at the total amount deducted by income bracket, it is clear that the SALT deduction benefits taxpayers across all brackets. Specifically, taxpayers earning more than $100,000 deducted above $10,000 (the new limit) on average. These taxpayers represent 14 percent of all taxpayers nationwide.

For more detail information and to scroll across the various parts of the U.S., see below:

 

Wealth Gains from Homeownership across Metro Areas in 2018

Homeownership has been associated with positive social outcomes[1], and is also the largest source of wealth among homeowning households. In 2016, the median net worth among homeowners was $231,400, with housing wealth making up 85 percent of wealth (average net housing wealth was $197,500).[2]

Housing wealth contributes positively to the homeowner’s and children’s economic condition, because home equity can be tapped for expenditures such as investing in another property (which can generate rental income), home renovation (which further increases the home value), a child’s college education, emergency or major life events, or expenses in retirement.[3]

Housing wealth (or net worth or equity) is built up over time via the home price appreciation and the principal payments that the homeowner makes on the loan.[4]  The chart shows the change in housing wealth (equity) as of 2018 for a home buyer who purchased a typical single-family existing home in the United States 5, 10, 15, or 30 years ago. Over these holding periods, most of the wealth gains are from the appreciation in home values. For example, if one purchased a home five year ago (2013), a home buyer would have typically gained $79,488 in wealth (equity), of which $64,200, or 81 percent is from the home price appreciation ($197,400 in 2013 to $261,600 in 2018).  Homeowners who move typically do so in 10 years, so a homeowner who bought a home 10 years ago (2008) would have $91,081 in home equity gains as of 2018).[5] The longer the holding period, the larger the increase in wealth due to home price appreciation and the cumulative principal payments, which reduce the loan balance.

If you had purchased a home just five years ago in these metro areas, here are the typical gains in home equity that you have due to home price appreciation and the principal payments you’ve made[6]:

Metro areas with home equity gains of $200,000 or over for a home purchased 5 years ago:

  • San Jose-Sunnyvale-Sta. Clara: $620, 410
  • San Francisco-Oakland-Hayward: $393,561
  • Boulder, CO:  $264,395
  • Anaheim-Sta. Ana-Irvine, CA: $218,773
  • Los Angeles-Long Beach-Glendale, CA: $216,613
  • San Diego-Carlsbad, CA: $205,659

 

Metro areas with lowest equity gains (loss) for a home purchased 5 years ago:

  • Atlantic City-Hammonton, NJ: ($8,593)
  • New Jersey City-White Plains, NJ-NY: $3,336
  • Cumberland, MB-WV: $6,215
  • Trenton, NJ: $7943
  • Elmira, NY: $8,705

Use this data visualization to explore the typical increase in housing wealth across metro areas as of 2018 if you purchase a home 5, 10, 15, 30 years ago. These are typical gains and are illustrative of the magnitude of the wealth gains over time. Actual wealth gains will vary by property:


[1] Lawrence Yun and Nadia Evangelou, Social Benefits of Homeownership and Stable Housing, Realtor® University The Journal of the Center for Real Estate Studies; https://realtoru.edu/real-estate-studies/journal/

[2] Federal Reserve Board, 2016 Survey of Consumer Finances

[3] Brad Finkelstein, 7 reasons why consumers are tapping into home equity, The American Banker, June 26, 2018; https://www.americanbanker.com/7-reasons-why-homeowners-are-tapping-into-their-home-equity

[4] The price appreciation can be thought of as ‘capital gains’ while the principal payments can be thought of as a conversion from liquid asset (cash) to an illiquid asset (house).

[5] To be clear, these are changes in wealth or home equity between two time period or over n holding periods. If one wants the level of the home equity at a point in time, one has to add the down payment.

[6] These calculations are illustrative of the magnitude of the housing wealth gains; actual change in home equity will vary by home.

Million Dollar Listing Team can sell your Million Dollar Home in the Following Cities:

Naples- Marco Island- Bonita Springs- Fort Myers Beach- Estero- Venice- Sanibel Island

Captiva Island- Fort Myers- Cape Coral- Punta Gorda- Port Charlotte- Englewood- Placida

Boca Grande- Siesta Key- Manasota Key Englewood- Casey Key Nokomis- Osprey- Alva

Lakewood Ranch- Sarasota- Longboat Key- Bradenton- Anna Maria- Bradenton Beach-

Tampa- Orlando- Labelle- Clearwater Beach- St. Pete Beach-Windermere 

Million Dollar Listing Team is Top Producing real estate team in Florida specializing in selling Million Dollar Homes. We sell Mansions, Beach Homes, Waterfront Homes, and Luxury Homes throughout Florida! Million Dollar Listing Team is a successful real estate team with Global Luxury Realty. We are Top Producing Luxury Agents who sell a lot of Million Dollar and High-End homes in Florida. If you want to buy a Luxury Home you will want to choose Million Dollar Listing Team. We don't only sell Million Dollar Homes but we also help Million Dollar Home Buyers find their dream home in paradise! As the Million Dollar Listing Team we specialize in Luxury Homes, Waterfront Homes, and Beach Homes! If you are searching for your dream home to buy you will want to speak with us. We sell Million Dollar Luxury Homes in Naples, Florida and Sarasota, Florida. As a Million Dollar Listing Team we sell Luxury Homes in Marco Island, Florida and Boca Grande, Florida. We sell beach homes in Sanibel Island, Florida and Captiva Island, Florida. Million Dollar Listing Team sells Luxury Homes and Condos in Fort Myers Beach, Florida. If you need to sell your beach home or condo in Siesta Key, Casey Key, or Longboat Key, Florida you will want to speak with Million Dollar Listing Team. We sell homes $1 Million Dollars and up in Anna Maria, Bradenton Beach, Lakewood Ranch, Manasota Key Englewood, and Sarasota, Florida. If you need to sell your luxury home don't choose an average agent. Trust our 40 plus years of real estate experience in Florida. As the Million Dollar Listing Team we have the experience needed to sell your Million Dollar Home.

Do you need to sell your Florida Beach Home? We sell beach homes in Florida! Million Dollar Listing Team can help you sell your Naples Beach Home. We can help you sell your Marco Island Beach Home. Million Dollar ListingTeam sells Beach Homes in Siesta Key and Boca Grande, Florida. If you own a Luxury Home in Anna Maria, Longboat Key, or Bradenton Beach, we can help you sell your home! We sell beach homes throughout Florida. We sell Million Dollar Homes! Million Dollar Listing Team sells Million Dollar Luxury Homes in Cape Coral and Fort Myers. As top luxury agents we can help you sell your Million Dollar Home in Sarsota or Bradenton. We take selling your Million Dollar Home very serious. Contact Million Dollar Listing Team today to see our real estate marketing plan and how we sell Million Dollar Luxury Homes! 



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