Adam Blaylock was pretty sure he overpriced his Santa Clara, California, home by offering it in February for $1.48 million, since tax deduction changes would keep buyers away. But within a week, the 1,280-square-foot ranch-style house was in contract for $155,000 above asking.
The $1.5 trillion tax overhaul President Donald Trump signed in December capped mortgage-interest deductions on loans up to $750,000, down from the prior limit of $1 million. It also set a $10,000 maximum for state and local tax deductions, which were previously unlimited. Those provisions prompted one of the most powerful lobbying groups — the National Association of Realtors — to warn that home prices in some high-end markets would tank.
So far though, those areas have proven to be resilient. There are 308 U.S. ZIP codes that have homes with median values in excess of $1 million — more than 92 percent of them saw their median home prices increase in March from a year earlier, according to data from online real estate database Zillow.
“We are seeing the opposite of what was expected,” said Aaron Terrazas, senior economist at Zillow. “We have certainly not seen the doomsday predictions play out.”