Is SALT Reform on the Way?

President-elect Donald Trump has directed House Republicans to negotiate an increase in the state and local tax (SALT) deduction cap, currently set at $10,000. The initiative aims to provide tax relief to residents in high-tax states like New York, California, and New Jersey. Trump's guidance followed a meeting with Republican lawmakers from these states, where he emphasized the need to determine a "fair number" for the deduction.

Background: The SALT deduction cap was established in the 2017 tax law, limiting deductions to $10,000. This cap has been contentious, particularly in high-tax states, as it effectively increased the tax burden on many residents.
Challenges Ahead: Modifying the SALT deduction cap faces opposition from GOP members in low-tax states, who are concerned about federal revenue impacts and potential benefits to higher-income earners. Additionally, there is internal debate regarding the appropriate level for the cap and how to offset potential revenue losses.

Ralph’s Take

The 2017 introduction of the SALT deduction cap has had a profound effect on high-tax areas like Westchester County. By limiting deductions for property and state income taxes, homeowners have faced higher federal tax burdens. Increasing the cap would offer financial relief, enabling residents to deduct a larger portion of these taxes and easing the strain of double taxation. The change would also help our real estate market by reducing financial pressures on buyers and enhancing the county’s overall economic appeal.

Westchester Weekly Market Tracker 📈

‘Coming Soon’ Listings: 20 ↑+1
New Listings: 162 ↑+16
Price Reductions: 56 ↑+13
Pending Sales: 83 ↓-19
Closed Sales: 127 ↓-1

💰 Highest Sale: 2 Cooper Road, Scarsdale: $7,250,000 (-3%)

_{Property Type: Single-Family. OneKey Multiple Listing Service, Inc. 1/10/25 - 1/17/25.}

Selling an Inherited House? Start Here

Selling an inherited house can be a significant financial benefit, but the process may also be lengthy and complex. The experience largely depends on how the property was transferred to you and the financial circumstances of the deceased. Here’s a quick guide:

The Probate Process:

Probate is a court-supervised process for validating a will and distributing assets.
Executors are responsible for managing the process, including settling debts and distributing assets.

Joint Ownership Considerations:

Heirs inheriting property must make unanimous decisions regarding its management.
Selling requires collaboration on pricing, marketing, and negotiations.
Retaining property involves choosing between joint tenancy or tenancy in common.

Tax Implications:

Capital gains tax applies to profits from selling property for more than its purchase price.

Ralph’s Take

When it comes to navigating the complexities of inheriting a home, preparation is key. Having the right documentation in order not only streamlines the process but also helps avoid potential legal hurdles down the road. In New York, the absence of an inheritance tax is a relief for heirs, but understanding the estate tax threshold and its implications is critical, especially for larger estates. Inheriting a home is both an opportunity and a responsibility, and with the right guidance, you can honor your loved one’s legacy while making informed financial decisions.

How Much Equity Did You Gain in 2024?

I’m excited to extend this offer to my newsletter readers:

Every January I set a few hours per day aside to prepare Home Equity Reports for my past clients. These reports provide a level of detail and accuracy that surpasses platforms like Zillow or Redfin.

If you would like to learn your home’s current value and your equity position, simply reply to this newsletter, call, or text message me at (914) 202-1101.

Existing Home Sales Expected to Rise in 2025

According to ResiClub's analysis of projections from 16 top industry forecasters, U.S. existing home sales are expected to average around 4.22 million in 2025. Below, you'll find detailed forecasts alongside historical data for added context.

Forecasts

NAR: 4.5M
Fannie Mae: 4.25M
MBA: 4.25M
Zillow: 4.16M
Capital Economics: 4.12M
Goldman Sachs: 4.09M
Realtor.com: 4.07M
Morgan Stanley: 3.8M
Moody’s: 3.74M

Historical Stats

2017: 5.62M
2018: 5.15M
2019: 5.26M
2020: 6.47M
2021: 6.43M
2022: 4.19M
2023: 3.91M
2024: 4.15M

Ralph’s Take

Many experts maintain that the "lock-in effect," where homeowners delay selling due to low mortgage rates, will take time to subside. Rising incomes and life changes, like growing families, can prompt homeowners to move despite losing lower payments or favorable rates. If existing home sales reach 4.22 million in 2025, it would represent an improvement over last year, signaling both a constrained market and early signs of the "lock-in effect" easing.

Yorktown Approves Rezoning

The Yorktown Town Board recently approved the rezoning of a 50-acre parcel on Catherine Street, clearing the way for the construction of one hundred and eighteen, age-restricted, three-bedroom townhomes in a clustered subdivision near the former Field Home. If the project proceeds, Toll Brothers plans to build 2,400 to 3,000-square-foot townhouses, each expected to sell for over $1 million, generating an estimated $1 million annually in property taxes. Planned amenities include a pool, fitness center, and pickleball courts.

What Top Execs Read Before the Market Opens

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Mortgage Watch 📉

Today’s average 30-year fixed mortgage rate stands at 7.08%, after surging up to 7.26% on Monday, mortgage rates fell after remarks made by Fed’s Chris Waller.

> The rate you may be eligible for can vary greatly from the daily average published via Mortgage News Daily. I use this figure as a proxy for how the mortgage market is shifting.