In the Silicon Valley and surrounding areas, the forecast from realtors about the near future points to more people renting rather than trying to purchase properties. This particular trend is based on local, state and national issues that affect real estate purchases. The National Association of Realtors recently gave the State Capitol in California a report that indicated rental rates should continue to rise based on current economic conditions.
For the San Jose property management firms, it means that more people will be seeking rental properties in the area. While such forecasts are subject to change, recent events certainly indicate that property management firms should gear their services more towards rental than sales if the trends continue on their current path.
The fact is that the US Congress does not appear to be in a position to do anything to affect the current market which means that people who are potential homeowners may find themselves renting instead if the tax credit is not present. While such a possibility may seem rather farfetched in some respects, the truth is that odder things have happened in the real estate market before.
January 2015 will see a new playing field for real estate across the country and in the San Fran area as well. This is because the Mortgage Interest Deduction (MID) is under scrutiny and may be changed or even eliminated when the next US Congress is sworn in. The proposed interest deduction may go from $1 million down to $500,000 which will have a major impact on home and property purchases.
For many, this change in the code will move people away from ownership and more towards renting properties which in the short run would be a cheaper proposition. This is especially true for places like San Francisco where the overall income is higher, but so too are the property values which will take a big hit in terms of purchases if the proposed changes go through.
In addition, the Capital Gains Tax may be altered as well. Currently, individual homeowners can exclude up to $250,000 in gains while couples can exclude up to $500,000 for the sale of their principle residence for two of the previous five years and each five years afterwards. There is currently a proposal to change this from five to eight years which will also affect the amount that can be excluded.
The proposed changes of this type will certainly affect homeowners in a negative way which may push them more towards rental properties instead. In addition, there could be changes to loan limits, local and state tax deductions or special deferrals of gains on investment property that could be altered as well. As with any part of the economy, making a change in one section could alter other areas as well. This is why caution is advised by the National Realtor Group so that the certainty of the current laws will stay in place.
The San Jose property management firm designed to meet your needs offers two locations, one in the SF peninsula and the other in the Greater San Francisco area. Please visit our website and let us show you what we can do for your needs.