Proposed federal tax laws cause concern for Realtors
More home listings result in increased October sales

By Katherine Michalets - Freeman Staff

Nov. 14, 2017

WAUKESHA — Mike Ruzicka, president of the Greater Milwaukee Association of Realtors, is happy with how October ended — with a 6.2 increase in home sales — but is concerned about possible future federal tax laws and how they may negatively affect the housing market.

In his report on Monday, Ruzicka said Realtors are concerned about how proposed federal tax laws could affect the industry, including by increasing the standard deduction; he said it could make the mortgage interest deduction less appealing. Also, Ruzicka wrote that eliminating the deduction of state income and property taxes could lead to a net increase in federal taxes for property owners in the state.

“Finally, due to the double whammy of tax increases and decreased MID use, property values are expected to decline 10 percent (after suffering a huge decline just a few years ago); not to mention the impact on the social benefits of homeownership,” he wrote.

The Greater Milwaukee Association of Realtors is encouraging constituents to contact their elected officials and estimated that the provisions in the tax bill will reduce property values by the following amounts (by congressional district):

1st Cong Dist. (Rep. Ryan) = $18,920

4th Cong Dist. (Rep. Moore) = $13,580

5th Cong Dist. (Rep. Sensenbrenner) = $21,630

6th Cong Dist. (Rep. Grothman) = $15,690
 

October home sales

During October in the four-county metro Milwaukee area, which includes Waukesha, Washington, Ozaukee and Milwaukee counties, home sales increased 6.2 percent compared to October 2016. They also bounced back from the 1.1 decline in September.

Ruzicka wrote that the uptick in sales was somewhat surprising because the market has lacked enough homes in the “sweet spot,” of under $300,000.

“However, in October, 76 percent of the homes sold were under $300,000, due to an increase in listings in three of the four metropolitan counties,” he wrote.

Home sales increased 12.2 percent in Milwaukee County in October compared to October 2016 and Waukesha County increased 3.8 percent for the same periods. Ozaukee County declined 7.4 percent and Washington County went down 6.1 percent in October 2017 when compared to October 2016.

Listings increased in Milwaukee County at 10.4 percent, Washington County at 17.1 and Ozaukee County at 6.3 percent in October compared to October of last year. Waukesha County declined 5.9 percent.

“The increase in listings was easily gobbled up due to strong demand that is continuing into the fall months. The underpinnings of the local economy are solid, with employment, interest rates, and lending all performing well. The strong economy is producing interest in home buying, particularly among first-time buyers and millennials, who brokers estimate comprise about 40 percent of the market this year,” Ruzicka wrote.