Tax Reform’s Effect on the Real Estate Market



I’m sure you’ve heard a lot about tax reform lately. Here’s a few ways The Tax Cuts and Jobs Act will affect the real estate market.

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There's a lot of uncertainty about The Tax Cuts and Jobs Act and its effect on real estate. Let’s first take a look at the four key tax changes impacting the housing market at this moment:

1. Deductions for property taxes. Prior to the new tax bill, if you itemized your deductions, you could deduct all of your property tax. Going forward, this amount will be capped at $10,000.

2. Deductions for mortgage interest. The final bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/2017. Other loans of up to $1 million are grandfathered in.

3. Home sales exclusion for capital gains. If you sell your home and turn a profit, then up to $500,000 of that profit is exempt from capital gains tax. Although earlier versions of the bill required you to live in the home for five out of the last eight years, the final bill made no changes to the capital gains exclusion. In order to qualify for this exclusion, you must have lived in your home for two of the past five years to claim this exemption—just like before. 

4. Deductions for moving expenses. The final bill repealed the moving expense deduction, except for those who are members of the Armed Forces. 

The first two changes increase taxes on current homeowners and make homeownership less attractive. This is a part of why the National Association of Realtors claims that home prices could drop by more than 10% due to the new tax plan.

On the other hand, the last change makes it more expensive to sell your home. As a consequence, they could keep some homes off the market.


These reforms may drive home prices down in the midterm.


We'll have to see how the different changes play out in reality, and how they interact with other real estate conditions. However, there does seem to be a consensus among experts that current reforms might drive home prices down somewhat in the midterm.

On the bright side, home sellers do still get to take advantage of the home sales exclusion for capital gains. That is a major victory for real estate.

That's why if you've been thinking of selling your home, now might be a good moment to start the process. If you have any questions, whether you are buying or selling, you can always call me or shoot me an email. I can give you more specific recommendations based on your unique situation. I look forward to hearing from you soon.
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Location: Saco, ME, USA

Homebuyers Are Feeling Optimistic



Why are homebuyers more optimistic than they have been in the past few years? Here’s what we found.

 Buying a home? Click here to perform a full home search

Here’s a paradox for you: Right now, homebuyer confidence is at an all-time high, according to a survey performed by Fannie Mae. Furthermore, an increasing number of people, particularly renters, think now is a good time to buy a home. Yet at the same time, housing inventory remains very tight. It’s down 6.5% nationally from last year. Home prices are also up 6.9% nationally over last year.

In other words, homebuyers are optimistic at a time that the market seems to be favoring sellers. So, what's going on? Why are homebuyers so optimistic all of a sudden? Here are three possible explanations:

1. Lending is loosening up. Over the past several years, mortgage rates have seen historical lows. This has meant that homes are actually more affordable, in spite of the increase in prices. However, lending has been very tight. Fortunately, that’s changing. Lenders are approving mortgages at the highest rate since 2011, with 77% of mortgages for home purchases approved.


Lenders are approving mortgages at the highest rate since 2011.


2. Jobs are looking good. At the moment, fewer homebuyers are worried about losing their jobs, according to the same Fannie Mae survey. It's not just job security that's contributing to greater optimism about buying a home. Overall income is higher, making homes more affordable by comparison. The median household currently has 150% of the income needed to buy a median home, compared to a historical average of just 125%.

3. Long-time renters are ready to buy. Millennials, the generation of people born after 1980, have largely opted out of homeownership until now. They have been renting for a longer time, putting them higher up on the pay scale compared to previous generations of first-time homebuyers. But now, many millennials are finally hitting an age when they are willing to commit to buying instead of renting. This is reflected in the Fannie Mae report, which states that much of the increase in homebuyer optimism comes from current renters.

What all does this mean for you? If you're looking to buy a home, all of the above reasons should give you confidence that now is indeed the right time to buy.

If you’re thinking about buying or selling a home, click the links above to search for homes on the MLS or find out how much your home is currently worth.

And if you have any questions about the Southern Maine real estate market, whether you're thinking of selling or buying, give me a call at 207-553-2602. I'm here to help. I look forward to hearing from you soon.
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Location: Saco, ME, USA

5 Safety Precautions for a Safe, Hassle-Free Home Sale




If you want to protect your home and yourself during the listing process, there are five safety precautions you need to take in your home.

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When preparing to list your home, there are five safety precautions you should take.

First, remove all prescription medications inside your medicine cabinet.

Second, put away any jewelry, family heirlooms, financial records, and other valuables and store them somewhere else.

Third, remove all family photos from your home. Not only will this help the buyer visualize themselves living inside the home, but it will also protect your privacy.

Fourth, install surveillance cameras.

Lastly, don’t let anyone view the home without their agent present.

Make sure your Realtor has some kind of screening process.


As a seller, preparing your home for the market can be a stressful time. You’re thinking about getting the best price and possibly needing to move quickly, and you’ll have potentially a lot of strangers into your home, so make sure your Realtor has some kind of screening process.

Our job is to make this process easy for you, so if you’re thinking about selling your home, don’t hesitate to reach out to me. I will do a comparative market analysis to help you find the best price, give you tips on how to prepare your home for the market and maximize its value, and provide safety tips to ensure all these precautions are in place.

If you have any other questions or are thinking about buying a home, just give me a call or send me an email. I’d be happy to help you.
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Location: Saco, ME, USA
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