2018 is expected to be a solid year economically for Livingston County, according to the National Association of Realtors’ Chief Economist. However, he believes the Republican tax reform will likely take away the incentive for some to purchase a house.

A housing market and economic forecast presentation was held at Genoa Township Hall Tuesday and was led by the NAR’s Chief Economist, Dr. Lawrence Yun. Yun says momentum looks good for the coming year, predicting noticeable job and gross domestic product growth. Yun doesn’t see a recession on the horizon, noting the low unemployment rate and large number of job openings. He does expect consumer price index inflation which will lead to higher mortgage rates, though nothing too alarming.

Yun believes President Donald Trump’s Tax Reform Plan will pass, saying there are implications it will affect home buyers and owners, though nothing too devastating. Under the reform, the majority of Michigan homeowners will still be able to deduct the property tax as well as mortgage interest deduction; however Yun says the home-buying incentive lessens under the reform as more people would take standard deductions.

Yun says despite consumers’ solid interest in purchasing a home, there are “very tight inventory conditions” for the housing market, leading to high home prices that are continuing to rise. Since 2011, the average income has only risen about 15%, while home prices are up 48%, harming first-time buyers’ ability to purchase. Additional inventory could have a number of benefits Yun says, especially as home ownership is at a 50-year low.

Yun says student loan debt plays a big role in the inability to purchase. A recent survey of millennials found that in tightening their budget to afford loan payments, the first sacrifice they make is purchasing a home and choosing instead to rent. Still, Yun says overall, 2018 should be an improving year for Livingston County.

Yun lightheartedly offers his biggest piece of advice, which is to buy real estate property next to wherever Amazon chooses to locate its second headquarters. (DK/JK)