After the federal tax law changed over a year ago, people worried that home values would be negatively affected in high-tax, high-price states such as New Jersey. According to New Jersey 101.5, those fears have proven baseless thus far.
For a home in the state, the median sales price has risen almost 5% in a year, which is normal for year-over-year change. Still, there are fewer homes sold and fewer homes for sale than a year ago.
“We haven’t seen the results of it yet. I think next year will be an interesting time to tell,” said Ilene Horowitz, president of New Jersey Realtors. “I think we’re going to see more next year how it has affected us.”
According to Moody’s Investors Service, the effect of the new tax laws will peak in 2019 and then fade away. Although values would not fall, they would be lower than they would have been if the tax laws remained unchanged.
The fall in home sales has affected the state budget. State realty transfer fees have increased for the past seven years by around 12% each year. The increase from 2018 to 2019, though, was only 1.6%. The increase from 2019 to 2020 is expected to be 0.3%
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