Tax reform

What impact do you expect tax reform to have on the housing market?

Gormley: I agree with the position of the National Association of Realtors: The proposals in Congress are bad for the vast majority of homeowners and erode incentives for homeownership. I’m hopeful that these problems in the tax-reform proposals will be addressed. The middle class in this country typically builds wealth through home equity. Homeownership also enriches people in other ways, building pride in community and stabilizing neighborhoods. It may sound self-serving, coming from someone in organized real estate, but these things are vital to our society and certainly worth fighting for.

Baker: What concerns me is the possibility of reducing the amount of mortgage interest that can be deducted. I work with buyers purchasing with less than 5 percent down; therefore, they need as much of a deduction as possible. This could eliminate the incentive to purchase and make renting seem like more of an attractive option.

Thomson: The impact on tax reform is still up in the air until there is reconciliation between the House and Senate. There are some big wins for the real estate market — including the preservation of the 1031 exchange. Capping the state and local tax deduction and mortgage interest deduction has the potential to put downward pressure on pricing — especially in Illinois for properties with high real estate taxes. Additionally, capital gains tax being expanded from two to five years may put a damper on homeownership among professionals wanting to keep their career options open (especially if relocation is on the table).