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Posted April 23, 2019

Byron King

By Byron King

High/Low U.S. Real Estate

Another opinion on the president disclosing his tax returns:

Sounds like Trump supporters still have their heads buried in the sand when it comes to Trump producing his tax returns.

What did he promise the voters, he would release them after the audit is done? Two years later, nothing.

What is Trump hiding? Not paying taxes? Laundering money for Russians? Not worth a billion dollars? Or all the above?

We have a right to know if he is cheating and is compromised by the Russians.

And this writer highlights the burden of state and local taxes:

There is a lot more to the tax burden than income taxes.

Here in Texas, property taxes are rising faster than the true value people can get for their property if sold. They have risen so much in the last two years in our rural area that it is hard to sell property.

Incomes here do not match the tax burden. This is the primary reason that affordable housing is almost non-existent.

Have property taxes risen in your neighborhood? Wed like to hear from you.

Second, in light of the TCJA, were you affected by the changes to state and local tax (SALT) deductions in 2018? Chime in.

Your Rundown for Tuesday, April 23, 2019:

Taking Inventory

Existing homes sales were weaker than forecasted for the month of March.

While analysts anticipated existing home sales would drop 3.8%, sales of lived-in homes accounting for about 90% of U.S. real estate sales declined 5.4% since last year. Thats the thirteenth straight month of year-on-year sales slides in this category.

But behind the headline numbers, says CNBC, an even more disconcerting dynamic is playing out.

Both the high end and the low end of the market are struggling due to completely different factors.

Sales of homes below $100,000 were down 13% in March compared to the same time last year.

On the other end of the spectrum, sales of homes priced at or above $1 million declined 11% from last March.

In fact, there is nearly a years worth of luxury supply available for sale now, CNBC reports. Compare that with barely three months worth of low-end supply. Experts agree the sweet spot in terms of housing inventory is 6 to 7 months supply.

Whats causing the imbalance?

The issue on the high end is the change in state and local tax deductions, or so-called SALT, implemented via the Trump administrations 2017 tax reform bill. (Side note: Folks hurried to buy pricey homes before the TCJA went into effect; sales of luxury homes surged 33% in 2017.)

As for low-priced homes, inventorys down for two reasons: builders arent building for this sector and, during the last real estate crisis, investors bought low-cost homes for a song and turned them into rentals.

About 5 million homes were added to the rental stock and very few of them were replaced in the for-sale market.

Well see how these trends play out through peak real estate season.

Market Rundown for Tues. April 23, 2019

S&P 500 futures are up 9 points to 2,917.35.

Oils added 62 cents to its price of $66.17.

Gold is down $5.90 to $1,271.70.

Bitcoins breaking out its up $195.55 to $5,590.63.

Have a good day. Well talk tomorrow.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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