The Economy & Hottest areas for Single Family Homes
US economy, New Fed Chairman, and Speculation on the new Tax Reform (Fed funds interest rates still at 1.25% but there's word that another 25 basis points will be raised in December or January)
I'm certain you heard that the new chairman for the Federal Reserve will soon be Jerome Powell. It's expected that Mr. Powell will model Janet Yellen by keeping interest rates low, (only if inflation still remains relatively low because the Fed raises rates to fight inflation from growing). This news had Wall Street soaring, however, the tax reform information recently released (about a week ago) caused some worry as it takes some tax incentives away from homeowners such as:
- Caps the Mortgage Interest Deduction at $500K for new mortgages.
- Caps the property taxes to be no more than $10k.
- Limits the exemption on Capital Gains Tax from the sale of a primary residence.
- New rules would require homeowners to live in their home for 5 of 8 years before a sale to qualify for the exemption, versus just 2 of previous 5 years today.
Regardless of what is to occur, this still needs to be passed through Congress so some of these tax limits may or may not be passed. Also keep in mind that the corporate tax rate would now be 20% instead of 35% so this has caused some positive speculation as some believe more corporations will bring their business back to the United States. Causing more jobs etc.
Los Angeles residents listen up! Some of the best areas in Los Angeles for home value improvement are places like Hancock Park, West Hollywood, Malibu and Playa del Ray. Click here to get the break down per area. However, keep in mind that although some of the prominent areas such as Bel Air, Beverly Hills, Trousdale Estates and the Bird Streets didn't increase so much, it's still a safe bet long term because the affluent buyers (locally and internationally) want to live there.