Singer Island Market Update – 1st Quarter 2018

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“Keeping your finger on the pulse of the market is critical when looking to buy or sell your home.” The Walker Real Estate Group brings their customer base “Just the Facts” enabling them to make knowledgeable decisions with regard to the real estate world around us…”

2017 followed in the footsteps of 2016 with uncertainty of the political environment.  The economy, with the federal tax cuts, came alive and made tremendous strides.  The effect of a strong economy seems to be having a positive effect on real estate as we end the 1st quarter of 2018.  There were 30 condominium re-sales on Singer Island in 1st quarter of 2018, approximately the same number of units sold as the same period in 2016; the difference being the amount of sales volume, $23M for 2018 compared to $19.2M in 2017 (20% increase).  In 2018, the newer condos accounted for 20% of the re-sales as compared to the 1st quarter 2017 when they were 14% of the re-sales.

Let’s recap the 1st quarter in condominium re-sales on Singer Island and the comparison with 2017:

  • Approximately fifty percent of the sales (15) were below $500K; the same as 2017.
  • The average Days-on-Market (DOM) for these sales decreased to 92 (approximately 3 months) compared to 117 days for this period last year.  The $1 million+ condos tend to take longer to sell.
  • The highest re-sale this quarter was Ritz Carlton 1804A at $2,975,000 ($821/SF). A Walker Real Estate Group listing and sale.
  • There were no short sales in this period.
  • Condo inventory ended the quarter at 178 units; down 8% from this time last year.
  • Price per square foot of the older condos (built 1969-1989) ended the quarter at $313, remaining steady compared to the same period in 2017.  The price per square foot of the newer condos (built 2003-2008) finished at $629, a slight increase compared to the 1st quarter of 2017.

CLICK HERE: Singer Island 1st Quarter 2018 Market Update

CLICK HERE: Singer Island March 2018 Market Update

The Tax Cuts and Jobs Act 2017 – It’s Impact on Homeowners

The Tax Cut and Jobs Act passed by Congress at the end of last year is having a large impact on all aspects of the tcjaeconomy.  There are several provisions of this act that specifically affect real estate and the homeowner.  Here is a synopsis o those provisions.

Tax Rate Reductions

The new law provides generally lower tax rates for all individual tax filers. While this does not mean that every American will pay lower taxes under these changes, many will. The total size of the tax cut from the rate reductions equals more than $1.2 trillion over ten years.

The tax rate schedule retains seven brackets with slightly lower marginal rates of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

The bill retains the current-law maximum rates on net capital gains (generally, 15% maximum rate but 20% for those in the highest tax bracket; 25% rate on “recapture” of depreciation from real property).

Exclusion of Gain on Sale of a Principal Residence

The bill retains current law.  If you have a capital gain from the sale of your principle residence, you may qualify to exclude up to $250,000 of that gain from your income, or up to $500,000 of that gain if you file a joint return with your spouse.

Mortgage Interest Deduction

The bill reduces the limit on deductible mortgage debt to $750,000 for new loans taken out after 12/14/17. Current loans of up to $1 million are grandfathered and are not subject to the new $750,000 cap. Neither limit is indexed for inflation.

Homeowners may refinance mortgage debts existing on 12/14/17 up to $1 million and still deduct the interest, so long as the new loan does not exceed the amount of the mortgage being refinanced.

The final bill repeals the deduction for interest paid on home equity debt through 12/31/25. Interest is still deductible on home equity loans (or second mortgages) if the proceeds are used to substantially improve the residence.

Interest remains deductible on second homes, but subject to the $1 million / $750,000 limits.

Deduction for State and Local Taxes

The bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes and income or sales taxes. This $10,000 limit applies for both single and married filers and is not indexed for inflation.  The bill also specifically precludes the deduction of 2018 state and local income taxes prepaid in 2017.

Standard Deduction

The bill provides a standard deduction of $12,000 for single individuals and $24,000 for joint returns. The new standard deduction is indexed for inflation.

By doubling the standard deduction, Congress has greatly reduced the value of the mortgage interest and property tax deductions as tax incentives for home ownership. Congressional estimates indicate that only 5-8% of filers will now be eligible to claim these deductions by itemizing, meaning there will be no tax differential between renting and owning for more than 90% of taxpayers.

Repeal of Personal Exemptions

Under the prior law, tax filers could deduct $4,150 in 2018 for the filer and his or her spouse, if any, and for each dependent. These exemptions have been repealed in the new law.

Like-Kind Exchanges

The bill retains the current Section 1031 Like Kind Exchange rules for real property. It repeals the use of Section 1031 for personal property, such as art work, auto fleets, heavy equipment, etc.

Cost Recovery (Depreciation)

The bill retains the current recovery periods for nonresidential real property (39 years), residential rental property (27.5 years) and qualified improvements (15 years).

As a result of the changes made throughout the legislative process, the National Association of Realtors is projecting slower growth in home prices of 1-3% in 2018 as low inventories continue to spur price gains. However, some local markets, particularly in high cost, higher tax areas, will likely see price declines as a result of the legislation’s new restrictions on mortgage interest and state and local taxes.  Florida, not having a state income tax, should avoid any price decline.

All good news for the real estate market going forward.

The Walker Real Estate Group keeps an eye on the pulse of the market and informs its customers of the trends so they can make better decisions whether it’s buying, selling or just renting their Singer Island property. We are the Number One source for “What’s Happening” on the Island!

We are heading towards a banner year for the Walker Real Estate Group; as the #1 Sales Team on Singer Island.   Providing our customers a true concierge experience has been a major factor in our success. Trust, integrity and knowledge of the market is our number one priority.

Call US today for a free confidential interview!

For more information on specific condominium sales activity contact Jeannie at 561-889-6734 or email her at [email protected]

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