Good news on the tax front for Home Sellers?
The capital gains deduction for selling your principal residence is $250,00 for individuals and $500,000 for couples. This has been the same since 1997, when the median home price in America was just north of $142,00!!! There has been no indexing for inflation or statutory adjustments for 28 years. There are currently 29 million households that exceed this threshold. This is insane. But help may be on the way. There are two proposals from Republicans in the House. One to do away with capital gains on the sale of your principal residence entirely. I’m not sanguine about its prospects. The other proposes to raise the amount to reflect current market realities and then index it to inflation going forward. This would be a boon for tens of millions of homeowners and unlock much desperately needed inventory.
That’s a hoped-for future, but let’s look at the current state of the market. As we near the end of the year, annual statistics come into focus. Sales prices are up nationally year to date 2.4%, but our market in NOVA is up 4%! We continue to outperform most of the nation. There are buyers markets elsewhere, but not around here, though we are steadily moving towards balance. Last week, inventory fell 8%, following a decline of 5% the week before to 2,435 homes for sale. In fact, we’ve seen inventory falling steadily since the beginning of October. It’s seasonal and unsurprising, though the decline started earlier than usual this year.
Sales however rose 27% week over week last week, which is encouraging. This all results in a 1.9 months supply of homes on the market. We need to get to 3 to see true balance, but we are heading there.
Finally, a Failure to Launch statistic that we need to see change. There are currently 9 million men ages 28-34 still living at home! Time to bring Terry Bradshaw in and get things rolling for these guys. If this is you, give me a call instead of waiting on Terry, as there are a lot of new first time buyer loan programs out there for you.
It’s a good life.
Chris
