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We can expect our 2018 market to be different than what we saw in 2017 because of the new tax law, interest rates, and inventory levels.Want to sell your home? Get a FREE home value reportWant to buy a home? Search all homes for saleThere are three main reasons why our 2018 market will be different than what we saw last year. The first reason is the tax law enacted toward the end of 2017. The first way people will be affected by this is through the mortgage deduction limit, which was reduced from $1 million to $750,000. If your personal mortgage balance is between $750,000 and $1 million, you’ll be affected. If it’s less than $750,000, you’ll be unaffected. The second way is through the state and local tax deductions, which have gone from being unlimited to being capped at $10,000. This is likely to affect a great number of people. If you’re an investor or a landlord, however, nothing changes at all. The third way is through capital gains exclusions. If you’re a home seller and you’ve owned the home you’re selling for two out of the last five years, nothing has changed. As far as the profit you might see from your sale, an individual can receive up to $250,000, and a married couple can receive up to $500,000 without paying taxes on it. “If you plan on buying or selling in 2018, it might be a good idea to do so sooner rather than later. ”The second reason 2018 will be different from 2017 is interest rates. Of course, we never know exactly what’s going to happen with interest rates—I always joke that my crystal ball is in the shop. Rates have slowly been creeping up, though, and there have been signs that they will be raised in 2018. One of those signs is the national unemployment rate, which is at 4.1%—a 17-year low. The recent GDP numbers are also higher. The University of Michigan also has a consumer sentiment that’s at a very high level. Furthermore, the Federal Reserve said they were raising interest rates three times this year. Granted, this expected rise can always be affected by world events, so that may change things. This rise is likely to happen, though, and should rates go up, it will affect both buyers and sellers. If you’re buying, it will cost you more to borrow money. If you’re selling, it changes who your buyers might be. This is why it might be a good idea to buy or sell earlier in the year before rates rise. The third and final reason 2018 will differ from 2017 is inventory levels. Condos in the lower price points in our Chicago market will likely have lower inventory levels and a shorter average days on market. In the suburbs and higher price points, we’ll likely see higher inventory levels and a longer average days on market. If you have any questions about our 2018 market or you have any other real estate needs, don’t hesitate to reach out to me. I’d be glad to help you.