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US Tax Reform Proposals Impact on Crested Butte

November 30, 2017 By Chris Kopf

US Tax Reform Proposals Impact on Crested ButteUS Tax Reform Proposals Impact on Crested Butte

I have had a number of clients ask me about US Tax Reform Proposals Impact on Crested Butte Real Estate. This is a very good question – and one I am not sure I am qualified to answer since I am not an economist, a tax professional, an attorney, and certainly I don’t have a crystal ball to predict the future.  Let me give you some of my thoughts…

NAR Does Not Like the US Tax Reform Proposals

My email Inbox is full of emails from the lobbying arm of the National Association of REALTORS® (NAR). I have form letters to send to my representatives in the Senate and in Congress. Of course NAR does not want anything to negatively affect the ability for the middle class to use a real estate agent to purchase a home, or purchase a bigger home… This makes sense and I am sure at some level their lobbying efforts will make an impact. Tax Reform – right or wrong, good or bad, agree or disagree I will look at all of this through the lens of the Crested Butte Real Estate market.

IMG_1110What About The Crested Butte Real Estate Market?

The challenge is understanding what is in the final Tax Reform Law – and what is Not.  There are going to be many changes, and the horse trading will continue in Washington so it is hard to say what the impact of something that has not been passed into law will be. Below are my general thoughts on this tax reform as it relates to the Crested Butte Real Estate Market.

Will home Prices Drop 10% in Crested Butte?

The excerpt from the NAR article below suggests there could be a negative effect on home values as great as 10% as a result of the Tax Reform. The Second Homeowner Buyer in Crested Butte drives the market. In general there demographic of the second homeowner buyer in Crested Butte is affluent and upper middle class and upper class.

The Crested Butte Real Estate Market is Driven by the Second Homeowner Buyer.

If the bad stuff in the US Tax Reform affects the Crested Butte Second Homeowner Buyer negatively – then this will have a “relative” negative effect on the Crested Butte Real Estate Market. Relative is the key word here. If the CrestedSecond Homeowner Buyer sees double digit increase in their stock market investment portfolio, and their part of the national economy is prospering – then I don’t think the fact that they don’t get to deduct the interest expense on their Second Home mortgage is going to deter them from buying a second home in Crested Butte (and 42% of home transactions YTD are cash).

If demand is up, then prices go up (law of supply and demand apply). We have a relatively steady inventory on the supply side – albeit the majority of the inventory price points have been and continue to rise and quality homes at the “lower end” of our market are in short supply.

There may be a negative affect on “locals” purchase of homes as prices rise, and costs to build start at $350 per sq. ft.  Some areas like CB South where there are high percentages of permanent residents may be affected – but will this be offset by the rising demand? And we have seen record lot purchases YTD 2017 so many buyers are considering buying and building and this feeds our local economy.

IMG_1020

Crested Butte may fare better than other markets. So assume there are terrible things in this Tax Reform Bill and it negatively affects a buyer from buying a second home in a ski town in Colorado.  Well then maybe there will be buyers who decide they no longer can afford the 2X price in Telluride compared to Crested Butte, or the 4X price in Vail compared to Crested Butte, or the 6X price in Aspen compared to Crested Butte… maybe the relative value of Crested Butte will be more appealing? Hmmmm….

My gut – the Tax Reform will not negatively affect the Crested Butte Real Estate Market.

Below is an excerpt from an article in REALTOR® Magazine – The official magazine of the National Association of  REALTORS®

___________________________________________________________________________________

Sorting Through the Tax Reform Proposals

DAILY REAL ESTATE NEWS | TUESDAY, NOVEMBER 28, 2017
Shortly before the Thanksgiving holiday, the National Association of REALTORS® hosted a Facebook Live event on the status of the tax reform proposals making their way through Congress.

Here are a few of the key takeaways from that Nov. 22 event:

  • Although there are significant differences between the House and Senate tax reform bills, they are very similar in the way they affect homeowners and the tax incentives of homeownership.
  • If the legislation becomes law, NAR’s outside research estimates that home values will drop 10 percent on average during the first few years.
  • The residency requirement to exempt from tax the gain from selling a primary home will change from two of the past five years to five of the past eight.
  • A decline in home values could cause millions of homeowners—especially recent buyers—to find themselves suddenly underwater with their mortgages, owing more than the home is worth.
  • The increase in the national debt that stems from the tax cuts could cause interest rates to increase, exacerbating the negative aspects of the tax bill for current and prospective homeowners.
  • 1031 like-kind exchanges for real property remain unchanged, which is good news for the commercial real estate sector.
  • Interest on home equity loans will not be deductible for either new credit lines (House bill) or at all (Senate bill).
  • Deductions for mortgage interest and property tax will not be limited for investment properties.
  • The negative tax effects on the housing market could worsen over time because income and home value limits in the bills are not indexed for inflation.

___________________________________________________________________________________

How can I help you with Your Crested Butte Real Estate Needs?

This post US Tax Reform Proposals Impact on Crested Butte and my monthly market reports on Crested Butte Real Estate, and the level of detail is representative of what you can expect from me as your Real Estate Agent.

Chris Kopf Crested Butte Coldwell Banker Bighorn RealtyI have consistently been among the top real estate agents in Crested Butte, and I strive to exceed client expectations.

Existing Crested Butte Homeowner – If you are interested in finding out what your property is worth, or may be considering turning a chapter in your life – contact me today.

Considering Buying a Crested Butte Home for sale – If you have started thinking about how great it would be to have your own Crested Butte Home and are considering me to represent you as a Buyer, I would appreciate the opportunity to earn your business!

For more info on me and the Crested Butte Real Estate Market – Visit www.chriskopf.com.

Chris Kopf Contact info:  Phone: (970) 209-5405, or chriskopf@bighornrealty.com

Click here to see  Crested Butte 3D Walkthrough Home Tours

Click here to do an advanced search the Crested Butte MLS for properties for sale in the Crested Butte area.

For more questions regarding Crested Butte Real Estate Market – Click the Link to download the 2016 Year in Review:  Full 9 Page .pdf CB Real Estate Market Report, and you will get my Monthly Newsletter emailed to you with the market reports!

See the big picture and all the details of the Crested Butte CO Real Estate Market  – Download Full CB Real Estate Market Report as a .pdf file (more data and charts)

Chris Kopf Crested Butte Real Estate AgentThanks,
Chris Kopf

Previews® Property Specialist
Coldwell Banker Bighorn Realty
(970) 209-5405
chriskopf@bighornrealty.com

 

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Chris Kopf, Coldwell Banker Mountain Properties
305 6th Street
Crested Butte, CO 81224
  • Chris.Kopf@CBMP.com
  • (970) 209-5405

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Bobby Nichols

"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "

 
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:45:19-07:00
"The first moment we met Chris, my wife and I knew he was all about what is happening in real estate sales in Crested Butte. He knows his job, the marketplace and the innovative ways to market your home in today's electronic internet space. A real professional that understood us and our needs in handling a very successful sales transaction. "  
https://chriskopf.com/testimonials/bobby-nichols/

Jeff Hollings

Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:46:48-07:00
Chris is outstanding! We recently bought a second home in Crested Butte and Chris did a great job throughout the whole process. He has a thorough understanding of the market and the benefits and drawbacks of various locations. He was very patient with us as our preferences evolved throughout the search. He gave us valuable information on which to negotiate the purchase. He had great follow-up during the inspection/closing process (when we were not in town) and made sure all of the commitments made by the seller were properly completed.
https://chriskopf.com/testimonials/jeff-hollings/

James Brennan

This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
Crested Butte Real Estate by Chris Kopf
2014-10-14T17:59:24-06:00
This was our first experience trying to purchase additional land with hopes of building a home. Chris was tremendously helpful throughout the entire process and his professionalism showed.
https://chriskopf.com/testimonials/james-brennan/

Jane Saltzman

Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:49:37-07:00
Chris was terrific to work with. The house sold faster then I ever expected! He was particularly helpful for this second home owner that couldn't always get there to take care of house issues. Thank you Chris!!!
https://chriskopf.com/testimonials/jane-saltzman/

Georges Lussier

The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:40-06:00
The thought of a short sale was intimidating, but Chris made the experience very easy with lots of guidance from start to finish. I would highly recommend Chris for any Real Estate need buying or selling.
https://chriskopf.com/testimonials/georges-lussier/

Frank Stringer

Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
Crested Butte Real Estate by Chris Kopf
2015-02-11T13:51:04-07:00
Chris Kopf is a wonderful person to work with on any real estate matter you may have in Crested Butte. He is extremely knowledgeable of all elements of the Crested Butte area. He helped us recently to buy a new second home in Skyland and the entire experience was first class under Chris's guidance. I would highly recommend him to anyone who has a real estate need in Crested Butte.
https://chriskopf.com/testimonials/frank-stringer/

Paul & Julie Keesee

Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:59-06:00
Chris was quite helpful in showing us homes in the area we were interested in and contacted us when new listings were available. We not only consider him our realtor but also a friend.
https://chriskopf.com/testimonials/paul-julie-keesee/

Jim & Sandra Wickham

Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:18-06:00
Chris' patience and persistence paid off for us in finding the right house for the right price. We would highly recommend Chris to any potential buyer.
https://chriskopf.com/testimonials/jim-sandra-wickham/

Tom & Mary Aton

It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:06:31-06:00
It was a great experience working with Chris, after showing me what I thought I wanted, he advised me of the pros and cons on the different condos and found one that I am thrilled with.
https://chriskopf.com/testimonials/tom-mary-aton/

Dan Aquaviva

This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
Crested Butte Real Estate by Chris Kopf
2014-10-14T18:05:26-06:00
This agent has a very strong knowledge of the local area. He was very helpful in screening properties for potential purchase.
https://chriskopf.com/testimonials/dan-aquaviva/
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Crested Butte Real Estate by Chris Kopf

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