Fiscal Cliff-Hanging in the DMV

Posted on December 06, 2012 by Corey Hart
06

Dec

2012

Like most companies (and residents) of the DC Metro area, we're paying close attention to the fun-filled negotiations between the White House and the Republican majority in the house. Sequestration would obviously have a huge impact on the local economy, but our housing market is also extremely vulnerable to any mortgage interest deduction limits, even if relatively high caps are put on itemizers. For background, the always interesting (and concise) blog Econ70.com summarizes the new revenue options being considered (see their post):

"If all 1040-Schedule A deductions, including the mortgage interest deduction are capped at about $35,000, then homeowners with houses priced north of $500,000 would be the ones primarily affected, and their homes would fall in value. Interestingly, they might respond by reducing charitable giving. If, however, the deductible amount is limited to 80% of total deductions, then all itemizers would be hurt, and many more houses would decline in price."

How many of the homes sold (year-to-date) in key DC Metro areas would have been impacted by a $35,000 mortgage interest deduction cap?

Might be a good time for area homeowners to give their local congressman a ring!

 

DC Metro Area, market analysis
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