Bitcoin, Net Neutrality, and Tax Reform Effects on Real Estate
Today I’m answering an “Ask the Agent” question that I’ve gotten from a couple different clients recently, and it has to do with trends that we should be looking for in real estate as we head into 2018.
On the local front, interest rates have gone up a little bit but are still very low and not too far off the all-time lows, so buyers still have great purchasing power. The Arlington housing inventory remains fairly limited, with only a couple months of inventory. It’s not as tight as it was a year or so ago and it’s still definitely more of a seller’s market, but buyers have great purchasing power with a low-interest rate to help offset that.
Nationally, there are a couple of trends to watch out for:
Bitcoin on Real Estate
We’ll just have to wait and see how they evolve in 2018, but one is the whole Bitcoin craze. For those who don’t know, Bitcoin is a cryptocurrency created online. Only a few years ago, 1 Bitcoin was worth just a few hundred dollars. Now, its value has risen to $16,000 or $17,000.
We’ve actually started to see some sellers advertise that they’ll take Bitcoin for the sale of their home now. We’ve seen this at a couple different places but haven’t actually seen such a transaction take place yet, so that will be something to look out for. I don’t think it will necessarily have a big impact on real estate yet, but you never know.
Net Neutrality on Real Estate
Another thing going on nationally is the repeal of Net Neutrality. Now, big internet companies such as Comcast and Verizon don’t have to provide every website with an even playing field. They can slow certain sites down or charge fees for faster speeds, which could affect the sites that you’re able to use for home searches.
Again, it’s a little too early to tell how that may affect things. But something to look out for is whether or not it’ll shift consumer behavior on how they’re looking for their homes online, which could affect how your agent lists your home or how you go about your search.
2018 Tax Reform on Real Estate
The last big national item that you need to be aware of is the tax bill. Having recently passed, there are a couple things in there that could affect real estate. For a lot of people the overall rate is going down, which could be good news because it could make your tax bill lower. But, on the other hand, you might lose some of your deductions.
For instance, the mortgage interest deduction to loans is dropping from around a million to $750,000. There’s also talk of lowering the deductions you’re allowed to take for state and local income and property taxes, which might affect your take-home pay. You’ll have to evaluate that versus the lower rate. We’ll be keeping an eye on that to see how it proceeds.
Strong outlook for Arlington real estate
Otherwise, heading into 2018 the market looks strong in our area. Inventory is higher than it’s been in the last year or so but is still fairly low, so it might be good to take advantage now if you are looking for a home. With slightly less competition and more choices than normal for January, you might get a better deal than if you wait for March or April, which is typically when we see the highest prices.
That’s all for now! It’s been another great year and I have really enjoyed all the questions you’ve asked. As always, if you have more please send us your questions, would love to chat about them in our next Ask the Real Estate Agent segment.
Thanks a lot. Have a great day and a great new year.