Know your grandfather rule. Also, severe marriage penalty:
First, home buyers need to understand that deductions for mortgage interest are now capped at home acquisition debt of $750,000. This can add to the costs of buying homes in expensive housing markets where home prices top that number.
It’s interesting to note that the $750,000 limit applies to single taxpayers as well as married couples. According to a prior ruling of the Ninth Circuit Appeals Court, when two unmarried people buy a home together, they can combine their limits and deduct the mortgage interest on debt up to $1.5 million.
Time to divorce your partner to buy that 2.5M Sunnyvale house.
You are absolutely right with your second point. It’s the tech sector that drives bay area economy and housing.
Regarding your first point, most home owners in the bay area used to be under AMT, so were not getting state and local tax deductions. MID is grandfathered. So no surprises for existing home owners and in fact they will not sell unless they really have to. So less inventory.
The second turning ( IMHO ) is when we reach “peak tech” - which we’re nearing unless there’s a break through somewhere in memory, screens, or batteries. Why buy an iPhone X when your iPhone 7 or 8 works just fine? Example, I’m not buying a Note 8 or Note 9 as the Note 10 (foldable screens BABY) will be the real upgrade. That’s a 3+ year cycle where I’m out of the device market. My kids are thinking the same way. Why buy an upgraded Xbox when the one you have still works? Once the velocity of trading up stalls, there will be a cascading impact back through the ranks of software writers and the other related fields. But this is for another thread.
Ha! wish my kids felt that way. I suspect we’ll be buying two laptops and two phones in the next two years.