Tax bill effects on homeownership.

[emu steve]

“Nothing Burger”?

Uhh... but Steve you constantly hold up D.C. as a role model and where Detroit should be headed... Now what is it? ‘Don’t do it like D.C. did it at all!’ You are a bit contradictory at times.

https://dc.curbed.com/2017/8/23/1618...orhoods-zillow

I'm not sure I follow your comment.

I said that reducing the amount of 1st mtge interest deductability from 1M to 750K for MICHIGAN is a big nothing burger.

It is an issue in D.C. and some other places.

I haven't stated [[nor do I have a position) on reducing 1st mtge. interest deduct ability from 1M to 750K.

I do think they should have kept the 2nd mtge interest deduction as it was.

[emu steve]

I get what you're trying to say, but you're still missing my point.

It's great that someone wants to remodel their kitchen [[or whatever). But the taxpayers shouldn't be subsidizing that.

I understand your point, but I'd rather see a home owner take out a 2nd for home improvements, etc. than having to refinance a 1st to pull out 25 or say 50K.

I do consider 1st and 2nd mortgages as being very similar, i.e., both are mortgages secured by the same house.

[aj3647]

Capping the deduction for state and local taxes at $10,000 will have a negative effect on many middle-class homeowners in Michigan.

https://www.npr.org/2017/12/26/57362...property-taxes

The median value for houses in Ann Arbor right now is $348,600. That would equate to an estimated annual property tax of ~$8400. Now throw in state income taxes and you're past the 10K threshold already. And that's just for the median home value in Ann Arbor.

[Cincinnati_Kid]

Nothingburger. The article quotes Snyder:

What the hell do you mean by nothingburger? Explain in layman's terms.

[313WX]

Capping the deduction for state and local taxes at $10,000 will have a negative effect on many middle-class homeowners in Michigan.

https://www.npr.org/2017/12/26/57362...property-taxes

The median value for houses in Ann Arbor right now is $348,600. That would equate to an estimated annual property tax of ~$8400. Now throw in state income taxes and you're past the 10K threshold already. And that's just for the median home value in Ann Arbor.

First off, Ann Arbor does not represent home values across most of Michigan. In fact, its home values are near the higher end of the spectrum.

Second, since when in the hell is someone who can afford a home of $350K, given Michigan's ridiculously low COL, "middle class?"

[aj3647]

What the hell do you mean by nothingburger? Explain in layman's terms.

He's just parroting words he hears Trump use. The fact that he puts total faith in Snyder's words should tell you all you need to know. Well gee, if Rick Snyder promises something, you can take that to the bank!

It must be Snyder's honest and trustworthy nature that got him that noteworthy 37% approval rating he currently holds.

[JBMcB]

What the hell do you mean by nothingburger? Explain in layman's terms.

It was a term used by CNN's Van Jones about the latest Trump-Russia collusion story from last June. In the context used there, it referred to a news story with no interesting content.

It was caught in one of those undercover sting videos by a conservative Youtube guy who has been caught deceptively editing his videos before, but in this case the context was pretty clear.

[aj3647]

First off, Ann Arbor does not represent home values across most of Michigan. In fact, its home values are near the higher end of the spectrum.

Never said it did, simply pointing out a fact that has particular relevance to the sixth largest city in the state of Michigan.

Second, since when in the hell is someone who can afford a home of $350K, given Michigan's ridiculously low COL, "middle class?"

I wasn't aware that married couples living a 350K home were "rich", good to know!

Since you clearly have zero knowledge of the Ann Arbor housing market, why don't you take a look on Zillow and see what kind of houses are going for 300-350K in Ann Arbor right now. See a lot of McMansions, do ya? Better yet, why don't you go take a look at the rich scions of industry who are living in 350K houses in Ann Arbor right now: teachers, nurses, etc. Clearly they are the 1%.

Newsflash: those are middle class people living in those median-price houses in Ann Arbor.

[313WX]

Never said it did, simply pointing out a fact that has particular relevance to the sixth largest city in the state of Michigan.

Ann Arbor doesn't reflect the norm in most of Michigan, thus is not relevant to the conversation about how this bill affects the average Michigan homeowner.

It would be like bringing the story of a impoverished family in Detroit when discussing the typical life of a family in Michigan. Again, no relevance.

I wasn't aware that married couples living a 350K home were "rich", good to know!

According to the US census, in Michigan, "Middle Class" household income ranges from $35K to $104K yearly.

http://www.businessinsider.com/middl...s-state-2017-9

The general rule is that a home you purchase should be, *AT MAXIMUM*, 3 times your gross yearly income. [[1/3 of $350K is $117K). Now, if you make less than that and decide to buy a house that's above your means, why should the US taxpayers be responsible for subsidizing your poor lifestyle choice?

[Wesley Mouch]

What the hell do you mean by nothingburger? Explain in layman's terms.

wikipedia: "Something of less importance than its treatment suggests." Think about a hamburger with no meat.

In my post, I quoted a newspaper quoting Snyder. He said the state should make adjustments to its taxes to make sure federal changes don't result in increased state taxes.

[emu steve]

Never said it did, simply pointing out a fact that has particular relevance to the sixth largest city in the state of Michigan.



I wasn't aware that married couples living a 350K home were "rich", good to know!

Since you clearly have zero knowledge of the Ann Arbor housing market, why don't you take a look on Zillow and see what kind of houses are going for 300-350K in Ann Arbor right now. See a lot of McMansions, do ya? Better yet, why don't you go take a look at the rich scions of industry who are living in 350K houses in Ann Arbor right now: teachers, nurses, etc. Clearly they are the 1%.

Newsflash: those are middle class people living in those median-price houses in Ann Arbor.

What I think a lot of folks not intimately familiar with expensive housing markets, like Ann Arbor, etc. is WHAT the money buys.

Someone hears of a 500K house in California, Ann Arbor, D.C., etc. and they think of say 6 bedrooms and 4 baths when in fact it might be a house which would sell for less than 200K in many other markets.

The new 6 bedroom/4 bath town home goes for 750K.

[Cincinnati_Kid]

He's just parroting words he hears Trump use. The fact that he puts total faith in Snyder's words should tell you all you need to know. Well gee, if Rick Snyder promises something, you can take that to the bank!

It must be Snyder's honest and trustworthy nature that got him that noteworthy 37% approval rating he currently holds.

And the fact that they let him totally off the hook for Flint. He knew, he let others take the fall.

[oladub]

The median home value in Michigan is $136,600. The median price of homes presently listed in Michigan is $164,900. Michigan's average property tax on a $250,000 home is $4583. The median Michigan home price pro-rated, based on the $250,000 home's tax, is then about $2493.

There are reasons to criticize Trump's tax bill. For instance, it increases the national debt 1/10 as much as Obama did although in 5/4 the time. The rich will receive a bigger tax break than the middle class and people not paying taxes won't get any tax break. However, we now have this spectacle of establishment Democrats whining about how rich people aren't going to be subsidized as much as they were for buying houses on Boardwalk and Park Place and given even more subsidies to pay their taxes there. In 10 years or sooner, which ever party is running the country has the choice to renew or end any part of this bill. If Democrats or Republicans want to restore property tax subsidies for the rich, or end the new lower tax brackets, doubled standard deduction, doubled child credits and doubled child care deductions received by working and middle class taxpayers, they should start campaigning on that platform now.

[Cincinnati_Kid]

^^ Great post. However, all this does is continue the "Wash, Rinse, Repeat cycle which is the current and past state of politics. The rich will always be winners, the average Joe Blow, not so much.

[aj3647]

Ann Arbor doesn't reflect the norm in most of Michigan, thus is not relevant to the conversation about how this bill affects the average Michigan homeowner.

Since I never claimed that it did, I guess we're on the same page. This bill will have negative LOCALIZED effects to certain areas of Michigan that will be harmful based on the housing prices there. It's not going to be limited to Ann Arbor either.

The general rule is that a home you purchase should be, *AT MAXIMUM*, 3 times your gross yearly income. [[1/3 of $350K is $117K). Now, if you make less than that and decide to buy a house that's above your means, why should the US taxpayers be responsible for subsidizing your poor lifestyle choice?

Why are you using individual income here when HOUSEHOLD income would be more germane to discussion of home prices? Are all those houses in Ann Arbor filled with just a single employed adult paying the entire mortgage by themselves? Or could perhaps a married couple who each make $70,000 a year [[thus having a joint income of $140,000) be able to afford a house that costs $350,000? Look at these rich MF'ers, making 70K a year [[which by your own definition is middle class) and living in their 350K mansion in Ann Arbor!

My point remains, because of the high housing prices in Ann Arbor [[and there are a few other places in Michigan too that are hot housing markets that will have similar issues), a 350K house is relatively modest and it's going to be middle class professionals like nurses living in them. And these people are going to take a hit. But I get it, it doesn't matter since the "average" person won't feel it, so the people that will feel it who are by no means millionaires don't matter.

[313WX]

Since I never claimed that it did, I guess we're on the same page. This bill will have negative LOCALIZED effects to certain areas of Michigan that will be harmful based on the housing prices there. It's not going to be limited to Ann Arbor either.

Again, who cares?

The fact that very few people *MAY* be negative impacted doesn't change the fact that, on average, the changes to the deductions will have no affect on Michigan homeowners.

For the very few people that *ARE* negatively impacted, if you're wealthy enough that you can afford a $350K with Michigan's extremely low COL, you don't *NEED* the deduction in the first place.

[313WX]

Why are you using individual income here when HOUSEHOLD income would be more germane to discussion of home prices?

I take it you didn't actually read the link I posted...

The household income required to be considered middle class is different in every US state.

For instance, a person earning $41,754 in Mississippi falls squarely in the middle class in that state, while someone earning that same amount in New York just misses the middle-income threshold.

Are all those houses in Ann Arbor filled with just a single employed adult paying the entire mortgage by themselves?

Please find the post where I said that.

Or could perhaps a married couple who each make $70,000 a year [[thus having a joint income of $140,000) be able to afford a house that costs $350,000?

It could be. That's besides the point.

Look at these rich MF'ers, making 70K a year [[which by your own definition is middle class) and living in their 350K mansion in Ann Arbor!

If you don't like the fact that the US Census Bureau doesn't consider a household with an income of $140K "middle class," I suggest you take that up with them.

My point remains, because of the high housing prices in Ann Arbor [[and there are a few other places in Michigan too that are hot housing markets that will have similar issues), a 350K house is relatively modest and it's going to be middle class professionals like nurses living in them.

And these people are going to take a hit.

Again, who cares? If you have a household income in Michigan that allows you to afford a $350K home, you're not "middle class."

In fact, I will go as far as to say if you can't afford to live in the utopia that is Ann Arbor without spending above your means, perhaps you need to look into cheaper housing / apartments [[which there's more than plenty of) in a neighboring city.

But I get it, it doesn't matter since the "average" person won't feel it.

In the context of how it will affect the average Michigan homeowner, no it doesn't matter. Sorry.

[emu steve]

Here is an analytic article with some graphics showing anticipated changes in housing prices by counties across the country.

https://www.washingtonpost.com/reale...=.3831e04b61fc

I think we make a mistake by looking at states, not metropolitan areas.

Ann Arbor is expense as is Oakland. Madison, WI. Dallas and Houston areas. Austin, too. Parts of Florida. etc. etc.

It's not all CA, NYC, N.J. D.C., etc.

[Wesley Mouch]

Let's step back from the yellow line.

Sure, some middle-class homeowners get benefit from this deduction. Yet the vast majority, and I mean vast majority of the benefit is for those with really large and expensive homes in expensive cities. This is regressive tax policy that isn't available to most poor taxpayers. If you want to tax the rich, this is a really good 'loophole' to repeal.

I known here as a kind and considerate guy. I always look out for the poor [[like my stance against the discriminatory minimum wage laws that are depriving poor kids of jobs in favor of middle-class adults). I would have grandfathered in the deduction for anyone making less than $200,000 or so.

[313WX]

Here is an analytic article with some graphics showing anticipated changes in housing prices by counties across the country.

https://www.washingtonpost.com/reale...=.3831e04b61fc

I think we make a mistake by looking at states, not metropolitan areas.

Ann Arbor is expense as is Oakland. Madison, WI. Dallas and Houston areas. Austin, too. Parts of Florida. etc. etc.

It's not all CA, NYC, N.J. D.C., etc.

My point still stands. These metro areas are still near the top end of the spectrum when it comes to housing prices and are not representative of most of America.

[oladub]

Marin County is so expensive that it provides "affordable housing" for the hired help; sort of like Mrs. Edsel Ford provided a house for her gatekeeper and mining companies had company houses and stores for their employees. That's one way of making sure rich people have the help they need. It would make more sense to pay teachers and nurses more so they could afford to live with the affluent in places like Ann Arbor. Teachers probably do get paid more in Ann Arbor or Birmingham than in Harper Woods or the U.P.. Teachers or nurses need not live on the same street as CEO's and professors. They have the option of living down the road or in a different state so as not to have to buy million dollar houses and pay over $10,000 of taxes. Why should people in less affluent areas or states have to subsidize the rich to pay for their expensive houses and accompanying taxes? Why should taxpayers who vote for less government have to subsidize taxpayers in other states who vote for more state and local spending?

[313WX]

According to the below link, *Metro* Detroit has the 8th highest cost of living-adjusted median income in the country [[it falls between Atlanta and Dallas).

Only Boston, Houston and Silicon Valley have higher COL-adjusted median incomes.

http://opportunityurbanism.org/wp-co...ving-index.pdf

So I repeat, the lowering of these deductions is a non-problem here.

[ABetterDetroit]

According to the below link, *Metro* Detroit has the 8th highest cost of living-adjusting median income in the country [[it falls between Atlanta and Dallas).

Only Boston, Houston and Silicon Valley have higher COL-adjusted median incomes.

http://opportunityurbanism.org/wp-co...ving-index.pdf

So I repeat, the lowering of these deductions is a non-problem here.

By repeating this is ‘no problem here’ over and over doesn’t make it a true.

You are ignoring the very simple fact that Michigan is a very high property tax state with pretty low property values. Something that is fairly unusual in the United States.

As long as property taxes remain as high as they are in Michigan and particularly the City of Detroit, this legislation will curtail future growth in property values. That scenario is never good for any housing market.

[313WX]

By repeating this is ‘no problem here’ over and over doesn’t make it a true.

You are ignoring the very simple fact that Michigan is a very high property tax state with pretty low property values. Something that is fairly unusual in the United States.

As long as property taxes remain as high as they are in Michigan and particularly the City of Detroit, this legislation will curtail future growth in property values. That scenario is never good for any housing market.

While Michigan may be on the higher end for property taxes on a percentage basis, the assessment is based off the value of the property [[thus, defaulting back to Michigan's extremely low home values). So the actual dollar amount in property taxes owed is fairly low [[just over $2,000 per year based on the median value).

https://wallethub.com/edu/states-wit...y-taxes/11585/

[JBMcB]

You are ignoring the very simple fact that Michigan is a very high property tax state with pretty low property values. Something that is fairly unusual in the United States.

From a macro perspective, it still doesn't make sense to have a deduction. As stated before, when sellers know you have a "coupon" for x% off the price of a house, everyone raises the price of the house by x%. It isn't making houses more affordable. The profit from the increased price of the house gets eaten up by realtor and mortgage fees, the seller is usually lucky to see a point or two.

Whenever these rollbacks are talked about in congress, the realtor and mortgage lobbies kick into high gear. Do you think that's because they are defending affordable housing, or their profit margin?