Real Estate Cycle & Tax Reform Bill

The real estate business is a constant fluctuating environment. The real estate cycle has proven that prices can dramatically change or stabilize depending on a variety of factors such as fiscal policy, monetary policy, tax breaks, and deregulation. The business cycle is a vital factor on making informed decisions to determine whether you'll get top dollar for your home, and this can be assured with a realtor that understands the business cycle and more importantly can properly market your home. 

These cycles are periods of economic growth and contraction that tend to be every seven to ten years. Therefore, following a decade since the start of the Great Recession, my recommendation is to sell homes during our current real estate cycle because home prices are high and mortgage interest rates are still artificially low (about 4% as of October 2017). Prior to October the mortgage interest rates were about 3.5% but due to the speculation of Congress passing a tax reform bill, it caused investors to gain confidence in the economy which raises the outlook for future inflation. As of June 2017, the Federal Reserve raised interest rates by another 25 basis points that now totals to approximately 1.25%. Thereby, these higher interest rates cause a higher expense for owning a home. These buyer setbacks correlate with home values because home prices could fall when a buyer's purchasing power is low.

Moreover, this becomes an egregious outcome for a homeowner looking to sell at top dollar. The Federal Reserve claims they may raise interest rates one more time in December 2017 and several more times in 2018. 

Interesting to see what will pan out in this tax reform bill. This is not the best news for real estate,…/tax-reform-plan-cuts-mortgage-intere…
However, this is just one of the many factors involved in the bill so I wouldn't jump the gun to say it's doom and gloom.

Please contact me if you are considering selling your home. I'd be happy to show you how I can sell your home at top dollar.

Andrew Vargas