President Donald Trump signed into law a complex $1.5 trillion tax bill on Dec. 22 that will have major implications for homebuyers, particularly in California, Hawaii, Connecticut, New York and other high-tax states.
Among the many alterations to the tax code, the law institutes caps on mortgage interest deductions and the deduction of state and local taxes.
Many real estate experts across the country are concerned about the changes, and the National Association of Realtors has gone so far as to say home prices—particularly at the higher end—may drop as much as 10%.
Steve High, president and partner at Villa Real Estate, has a more measured outlook.
“Although the overall structure of the final bill diminishes the tax benefits of California homeownership, the final bill includes some big successes. Notably, the exclusion for capital gains on the sale of a home and the 1031 like-kind exchange for real property remain intact.”
High, who was named the 2017 Realtor of the Year by the Newport Beach Board of Realtors in December, has two decades of executive experience in the Orange County luxury market and has co-founded several luxury brokerages, which he’s navigated through flush times and downturns.
Regarding the new tax bill, he adds: “Where California homeowners did not fare well is with the mortgage interest deduction, which now limits deductible mortgage debt to $750,000 for new loans taken out after Dec. 14, 2017. And the final bill allows an itemized deduction of up to $10,000 for the total of state and local property taxes, both of which may have an effect on high cost, higher tax areas.”
High says 2018 looks strong for the luxury housing market, with low inventory levels and strong buyer demand.
“In addition,” he says, “we are expecting to see the Chinese buyers continue to purchase the new higher-end luxury homes throughout Newport Coast and Irvine.”
December wrapped up with 32 sales in the luxury division, including these:
Wonder on the Water
The home at 928 Via Lido Nord in Newport Beach sold on Dec. 28 for $18.3 million after being listed in July for $20 million.
The 4,388-square-foot, Cape Cod-inspired custom estate is on an exterior corner flag-shaped lot on Lido Isle that offers unencumbered panoramic views of Newport Bay. The .28-acre property boasts 200 feet of bay frontage with multiple docks, a waterside patio and a swimming pool and spa.
The renovated home, originally crafted in 1942, is reached through an intricate wrought-iron gate. It has five bedrooms, five baths and an open-plan family room. Classic white-painted molding and paneling add nautical New England ambiance.
Alison McCormick of Douglas Elliman Real Estate represented the seller and buyer in the transaction.
Exclusive Living
The 5 Spinnaker property in Newport Coast sold on Dec. 27 for $7.1 million. It was listed in February for $6.75 million.
Newly competed, the Coral Crest home offers views from many of its rooms through floor-to-ceiling windows that frame ocean vistas. There are five bedrooms and five baths.
The home is situated on a .42-acre coastal hillside lot that includes an outdoor loggia and fire pit.
Real estate brokers Jay Larson and Brian Klein represented the seller, and the buyer was represented by Xue Li of IRN Realty.
Coastal Craftsmanship
The home at 9 Crestwood in Newport Beach sold on Dec. 4 for $7.1 million, surpassing its September list price of $7 million.
Recently remodeled from the foundation up, the 7,300-square-foot home features unobstructed views of Catalina Island, the ocean and Newport Harbor. It sits on a 10,454-square-foot lot.
The main floor holds a chef-inspired kitchen equipped with Carrera marble countertops and center island, Sub-Zero refrigerator, dual Boche dishwashers, and a six-burner Wolf stove.
The second level has four guest suites with private bathrooms, custom closets with built-ins, and views from several rooms. It also includes a resortlike master suite with vaulted ceilings, a Carrera marble shower and a closet with LED-lighted display cases. Among its extensive renovations, the estate was completely upgraded with the latest electronics, surveillance and security system.
Rex McKown and Marcy Weinstein of McKown Weinstein Associates, Surterre Properties Inc. were the seller’s agents, and Michael Balliet of Luxe Real Estate worked on behalf of the buyer.
