NEW YORK (Reuters) – A housing shortage, strong economy and robust demand have pushed many homes in major U.S. cities over $1 million, offsetting buyers’ concerns about the reduced benefits of owning a pricey property under President Donald Trump’s tax reform, data show.
Home sales at $750,000 and above have surged by double digits annually in the past three years, closings data from realtor.com show for 30 counties on the east and west coasts.
Sales - Years - Scarcity - Homes - End
Sales below $750,000 are down in the past two years due to a scarcity of homes priced around $500,000 and below and the lower end’s larger market size has pulled down overall sales, the data show. While the Trump tax plan affects homes for sale above $750,000, the fact that overall sales fell suggests the new tax law is not the main culprit for the decline.
The new law caps the deductibility of mortgage debt at $750,000 and annual property taxes at $10,000. This was expected to hurt home sales as fewer people would be able to utilize mortgage interest and property deductions when paying taxes.
Sales - Counties - Homes - Realtor - Com
Overall sales in 30 counties with million-dollar homes that realtor.com examined fell 8.5 percent in December from a year ago and 7.0 percent year-over-year in January.
But the number of homes sold above $750,000 actually grew in December and January, though they slowed to single-digit gains of 7.9 percent and 4.8 percent from a year earlier, respectively.
Counties - Three-fourths - Sales - January - Homes
Ten counties accounted for three-fourths of the 4,268 sales in January above $1 million, while half or more homes sold in San Mateo, San Francisco and Santa Clara counties in California and New York county, which is Manhattan, were above that mark.
“Our data suggests that in these high-priced markets there was enough momentum in demand and enough inventory toward the end of last year and the beginning of 2018...
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