MARTINEZ, Calif. - Martinez realtor Mark Ross says the new federal limits on mortgage interest deductions and on tax write-offs could deal a double blow to the Bay Area housing market.
"This has got more effects than I think were contemplated," said Ross, the owner of Ross Company Realtors. "When you constrain the supply by causing uncertainty, potential tax increases, the laws of deductibility for your property taxes and your mortgage interest, that's going to make people think twice."
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The new law only allows interest to be deducted on new mortgages up to $750,000, down from $1 million.
And federal deductions for state and local taxes, including property taxes, will be limited to $10,000.
"The fundamentals of the market are strong," said Will Doerlich, President of the BayEast Association of Realtors, based in Pleasanton. "In the Tri-Valley, you're going to see some effect because the median price in 4 out of the 5 communities is over a million dollars. So if you have a 20-percent loan, you're going to have some effect on that."
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Rossmoor Realty's Chuck Lamb says there may be some relief for seniors in the new year, in the form of a possible statewide "portability" ballot measure.
"To let people who are seniors or handicapped keep their tax base, move up or down as many times as they find prudent in their lives," explained Lamb. "That will help a great deal in making the transferability of home ownership a lot more inviting."
The California Association of Realtors is working to gather enough signatures to qualify that initiative for the November ballot. Information is on their website, www.car.org.