The Best and Worst Cities for Retiring with a Real Estate IRA

The Best and Worst Cities for Retiring with a Real Estate IRA

USA Today recently released its list of the best and worst cities for retirement, and the results are in: according to the newspaper, Pittsburgh, PA is the best place to retire, followed by the Boston metro area and the Los Angeles metro area. Although many investors are familiar with these lists, we at American IRA wanted to go a step further: what might be the best place to retire with a Real Estate IRA—and would that list differ from what you see in the news?

How to Gauge the Best Places to Retire with a Real Estate IRA

The first question is simple: how does one determine what makes a great place to retire in the first place—particularly when it comes to Real Estate IRAs? There are the obvious demographics, such as home prices. But that alone doesn’t tell the whole tale. One area with inflated home prices might be far inferior to another area with prices that are still low relative to the value of the real estate.

The key is to consider the full range of variables here, including:

  • Crime levels. An area with a high rate of crime tends to inhibit the potential for real estate growth, even if the other statistics are strong.
  • Weather. A great local climate is always a way to attract new investment and renters, which in turn creates a built-in demand for the local real estate.
  • Tax burden. For anyone living on a planned or fixed income, the tax burden is an essential variable to consider. A high tax burden can have enormous fallout, especially with large estates where one percentage point can represent a large portion of money. Property taxes are just as important to consider, because they can affect the perception of property in a locale.
  • Health care. Access to quality health care is important not just because health facilities create high-quality jobs and attract highly-educated workers, but because old age puts you at higher risk for health complications. Those retiring with or without a Real Estate IRA would have to consider access to good health care an essential variable.

Given this information, there’s a good chance you’ll find that areas like Pittsburgh and Boston—highlighted in the USA Today article—stack up strong. But that’s not the only consideration for those with a Real Estate IRA, either.

What Makes a Real Estate IRA so Attractive for Retirement?

The reason a Real Estate IRA can be so potentially attractive for future retirees is the same reason real estate investments are so attractive themselves—they create opportunities for tremendous growth, particularly if you find yourself in a hot area with plenty of demand for quality rental real estate.

The protections afforded by holding real estate within an IRA can also dramatically expand the potential returns for anyone putting aside money for retirement. While it’s not possible to live in a house you hold within a Real Estate IRA, there are other advantages to these tax-protected accounts that make them tremendously beneficial, particularly if you live in an area with lots of real estate buzz, like Pittsburgh.

The tax protections possible when investing in an IRA are tremendous, but they also require knowledge of what the IRS requires and what your own responsibilities will be. For those who are considering where they might want to retire, it’s important to ask questions about specific locations, taking all of the variables listed above into account. For more information on how Real Estate IRA plans work, be sure to contact us here at American IRA at 866-7500-IRA.

The Hottest Markets for Real Estate IRAs

The most important factor in real estate, they say, is “location, location, location!” And so it goes with real estate IRAs, as well. All real estate ultimately comes down to spotting good locations and trying to work with demographic and economic trends rather than against them. A recent study from the National Association of Realtors has identified ten hot real estate markets where demographic and economic trends are working for real estate IRA investors instead of against them.

Ten Hottest Markets for Real Estate IRAs

Three of the top ten are no surprise: San Jose, San Francisco and Vallejo, California are all high-dollar Bay Area markets long known for high real estate prices. And these markets are very difficult for new buyers to get into, thanks to those same high prices.

Number four on the NAR’s list is Fort Wayne, Indiana. This up-and-coming Midwestern city is the second largest city in the state, and a three-time winner of the All-America City Award. Zillow data has Fort Wayne home values rising at an 8.9 percent clip over the next year. The current median home value is $102,800, or about $88 per square foot. In the metro area, you’ll find median home prices of around $156,000, and about the same price per square foot. Zillow is plotting the median rent prices at $700 both in the metro area and outside of town – so you may be able to get a 30 percent ROI boost just by shifting your sights to the suburbs.

And only 30 minutes away is an affordable sleeper community, Decatur, Indiana, which has an average median home price of $81,900, but a low, low unemployment rate of just 3 percent – earning it a place on the National Real Estate Association’s list of Ten Affordable Housing Markets (Where You’d Actually Want to Live.)

San Diego is number five on the list, but it has a much higher ante, with a median home price of $595,800. The market has appreciate 8.6 percent over the last twelve months, and Zillow is anticipating a healthy but not outrageous gain of another 4.2 percent over the next year.

Median rent prices are around $2,500 both in and out of town, with suburbs showing higher prices than the San Diego Metro area. The market is bouyed by great weather year round, its proximity to Mexico, which makes it a major trading hub, a world-class harbor, and, of course, a substantial military presence, with a major Navy base in San Diego as well as Camp Pendleton in nearby Oceanside, California.

Stockton, California rolls in at number six, with median house price appreciation of 11.1 percent. The median list price is $174 per square foot, translating to a median listing price of $268,500. Stockton does have a slightly higher percentage of homes with negative equity, according to Zillow, with 11.6 percent of homes underwater, compared to 10.4 percent for the U.S. as a whole.

Santa Rosa and the California State capital of Sacr

Study Portends Bright Future for Private Equity in Self-Directed IRAs

Private Equity is still proving to be a compelling asset class for self-directed IRA investors – continuing to outstrip the general stock market. According to a recent report from Coller Capital, most investors – 62 percent – earned net investment returns of 11 to 15 percent from inception to this year.

That’s solid performance for this underappreciated asset class, though not quite as good as last year, when fully two-thirds of investors experienced returns in the same range.

Private equity is a popular alternative asset class among self-directed retirement investors – particularly those who don’t want to become landlords through a real estate IRA, or those who have particular expertise in one or more industries which gives them a competitive edge when it comes to investing their self-directed IRAs in private equity.

About 18 percent of investors reported annual private equity returns of 16 percent, measuring from inception to 2017. Again, that’s slightly lower than the 20 percent who reported private equity returns in the 16 percent-plus range last year.

About 19 percent of private equity investors have seen annualized returns from inception to 2017 across their entire private equity portfolios, but there were very few – just 1 percent – who saw returns of five percent or less. In contrast, in the Asia-Pacific region, about 35 percent of private equity firms experienced returns in the 6-10 percent range, and 17 percent of private equity market participants report that they experienced incomes of 5 percent or less.

Other findings

Among the study’s other major findings: Most private equity limited partners are concerned about high asset prices (90 percent). 60 percent see protectionism as a big threat to private equity returns.

Most private equity investment respondents see improving prospects, with the most favorable sentiment in the Asia-Pacific region: 52 percent of respondents see improved prospects in private equity in the region in 5-6 years, while only 7 percent expect things to get worse.

In the United States and Canada private equity market, about one in five private equity investors responding – 22 percent, expect things to get worse for PE investors over the next two or three years, while 24 percent expect things to improve. However, there’s a great deal more optimism when it comes to the longer-term outlook: Extend the time horizon out to 5-6 years, only 9 percent expect things to be worse, while 40 percent expect things to be better over that time period.

Interestingly, half of private equity limited partners believe there is much greater tax uncertainty in North America – roughly evenly divided between those who think the tax situation in the U.S. will get better and those who think it will get worse. Uncertainty is much less in Europe and in the Asia-Pacific region.

As for industry sectors, financial technology seems to be the leading the way in the private equity space, with 65 percent of private equity investors seeing investment opportunities increase in this industry. Only about four percent of private equity investors expect things to contract in the financial tech sector. However, indications are that private equity investors are becoming much more selective when it comes to Asia-pacific opportunities.

In credit investments, private equity investors are seeing solid opportunity in special situations, distressed debt, direct lending and mezzanine debt – each of which are popular asset classes among self-directed IRA lenders.

Women Falling Behind in IRA, Self Directed IRA and Other Retirement Savings

A recent Transamerica study found a large and pervasive gender gap when it comes to preparing for retirement. On average, Transamerica found, women have only about a third of the retirement savings that men do. This is true even though women tend to live much longer in retirement than men do – and because women tend to marry younger, they are significantly more likely to outlive their spouses. It’s therefore even more critical for women to invest in self-directed IRAs, 401(k)s, IRAs, SEPs and take advantage of every opportunity they can to boost investment and savings.

Some highlights from the Transamerica survey:

  • Men have more than triple the household retirement savings than women. Men report having saved an estimated median of $115,000 compared to just $34,000 among women. Men (33 percent) are also twice as likely as women (16 percent) to say that they have saved $250,000 or more in total household retirement accounts.
  • Working men (62 percent) are more likely than working women (51 percent) to say saving for retirement is a financial priority right now. Working women (53 percent) are more likely than men (36 percent) to say “just getting by – covering basic living expenses” is a current financial priority.
  • Men are nearly twice as likely as women – 19 to 10 percent – to report being ‘very confident’ in their ability to comfortably retire.
  • A large majority of workers are saving for retirement through an employer-sponsored plan and/or outside of work, men are more likely (80 percent) than women (72 percent) to be saving. In terms of the median age they started saving, men started saving at a younger age (age 26) compared to women (age 28).
  • Self-funded savings including retirement accounts (e.g., 401(k)s, 403(b)s, IRAs) and other savings and investments are the most frequently cited source of retirement income expected by workers, including 77 percent of women and 78 percent of men.
  • Many workers are “guessing” their retirement savings needs. Women (56 percent) are more likely than men (40 percent) to say that they “guessed.” Fewer than one in ten women and men say they have used a retirement calculator to estimate their needs.

It’s clear from the data that women are lagging behind men when it comes to long-term financial security. What can women do to close the gap?

Here are some ideas – with which we heartily concur:

  1. Start now. When you can start making compound interest work for you instead of against you, then every day you delay represents a lost opportunity – not just for accruing interest and potential returns, but an opportunity to build positive financial habits, such as paying yourself first and living on less than you make.

2. Open an IRA or self-directed IRA. Both allow you to set aside up to $5,500 per year for your retirement, on a tax-advantaged basis. If you are age 50 or older, you can contribute another $1,000 per year. Self-directed IRAs allow you to pursue non-traditional retirement assets and alternative asset classes while still preserving the tax advantages of an IRA. If you are a real estate enthusiast, you may wish to consider a self-directed IRA.

3. Boost returns. Over time, women tend to earn lower returns on their investments than men. This is because women tend to gravitate toward lower-return investments than men, seeking safety rather than growth. This is a perfectly fine approach as you near your retirement years. But when you have a decade or more before you need to retire, you might consider taking on a bit more risk as you seek a greater return. That is, if you have the time to recover from temporary market downturns, a bumpy 10 percent return is better than a smooth 6 percent.

4. Slash fees. Many investors are vastly overpaying financial services companies, paying excessive fees like asset under management fees (AUM fees), high fund expense ratios, back-end charges, and hidden fees. Consider switching to index funds, or moving self-directed or alternative assets to a menu-based, flat fee system that can save thousands on larger accounts.

Asheville Still Holds Promise for Real Estate IRAs

We’re obviously quite deep into a bull market for real estate IRAs in much of the country. But a number of economic indicators suggest that the market for real estate IRA investors in beautiful Asheville, North Carolina has a lot of room left to run.

The population is growing fast – much faster than most other cities of similar size across the U.S. as people and employers alike are drawn by the natural beauty of the area, by the recreational and lifestyle features, by the low crime rates and thriving economy, which has been steadily growing and diversifying for the last two decades. According to the Economic Development Coalition of Asheville-Buncombe County and the Asheville Chamber of Commerce, Asheville’s area population has grown by 26,645 people in the last six years. Nearly all of them found a job: The economy added more than 23,000 jobs during the same period. So back out retirees, stay-at-home parents, those living on disability and children and students not yet in the workforce and Asheville’s residents are enjoying near full employment.

The population expansion is widely expected to continue: All told, the population of Asheville is projected to grow by about 21 percent between now and 2046.

The mountainous terrain surrounding Asheville and the nearby communities limits the amount of land that’s easily converted to housing and business use. Furthermore, the community is very environmentally conscious. This may help limit the amount of housing supply growth in the region. All this creates a favorable environment for real estate investors of all stripes, including those who use real estate IRAs. Demand is expected to be very strong in the coming years.

These trends should benefit not just Asheville itself, but bode favorably for all five surrounding counties: Madison, Transylvania, Henderson, Buncombe, and Haywood. Many of the communities in these counties still offer plentiful opportunities to buy properties for real estate IRAs at a reasonable price.

Naturally, real estate investors are constantly seeking sources of financing. This creates more opportunities for self-directed IRA owners. Don’t want to be a landlord or go through the hassles of buying and selling actual properties? You can lend money directly to real estate investors from your IRA or another retirement account, using a self-directed IRA. With rising prices and solid economic fundamentals supporting real estate prices here in the Asheville area, you can lend money secured by quality collateral and potentially enjoy attractive returns in the meantime.

Asheville’s rising population and continuing economic development indicate that the real estate market should be benefiting both landlords and lenders for a long time to come.

Self Directed 401(k)s Versus Self-Directed SEP IRAs

Which is Better for Small Business Owners?

For many owner-operators of small businesses, the Self-Directed Solo 401K may be the way to go, rather than a self-directed SEP IRA plan. Here’s why:

With a Self-Directed Solo 401K plan, you aren’t limited to only one kind of contribution. 401(k) plans allow you to make substantial annual contributions both as an employee and as your own employer, via profit sharing contributions. The business you own and control can make contributions of up to 25 percent of compensation (20 percent for sole proprietorships or single-member LLCs), resulting in a maximum annual combined contribution of up to $53,000 per year.

If you’re age 50 or older, you can potentially defer even more: You can contribute up to $24,000 per year, including an additional $6,000 per year in “catch-up” contributions – and still have the small business you control contribute up to 25 percent of compensation on top of that, for a maximum combined Self-Directed Solo 401K contribution of $59,000.

With a self-directed SEP IRA, on the other hand, you are limited to just the employer contribution of $53,000 and no possibility of additional catch-up contributions under current law.

Furthermore, the total contribution to a self-directed SEP IRA cannot exceed 25 percent of total compensation. That limitation applies to the entire plan. With a self-directed solo IRA, the 25 percent of earnings cap only applies to the employer match portion of the contributions for the year.

Furthermore, a solo 401(k) offers self-directed retirement plan investors the option of establishing a Roth account. This means that contributions will no longer be pre-tax, but the growth in the account will compound tax free for as long as you leave the money in the account. The Roth 401(k) will generally generate tax-free income in retirement for as long as you like, until your Roth funds are exhausted. There is no required minimum distribution requirement that will force you to begin drawing down your account and paying income taxes after you turn age 70½.


The 401(k) allows for much more flexibility if you want to access your money early.

If you start a Self-Directed Solo 401K plan, you have the option to allow plan loans, which can provide you with a tax-free source of liquidity of up to 50 percent of the 401(k)’s total value for any purpose you like. The catch: You must repay yourself, with interest, within five years of taking out the loan, or your outstanding balance will be subject to income taxes and possible penalties for early withdrawal unless you are at least Age 59½ or otherwise qualify for an exception.

This option is not available for SEP IRAs or any other kind of IRA. While you can lend money to certain third parties within your IRA, you cannot lend money to yourself, your spouse, ascendants or descendants and their spouses.

Tax Efficiency

If you are a self-directed real estate real estate investor or you want to use leverage within your retirement account to invest, you would generally be subject to possible unrelated debt-financed income tax within a self-directed SEP IRA. In most cases, your Self-Directed Solo 401K will not trigger that tax – which can approach 40 percent – provided you use a non-recourse loan.

While there is no one-size fits all situation, if you are a self-employed small business owner and you want to maximize both the amount of money you can contribute each year – especially after turning 50 – and your choices, it may make sense to carefully consider a solo 401(k) plan.

American IRA works with small business owners and self-employed individuals who use precisely these strategies to help them get the most out of their available retirement assets. We’d like to help you do the same.

Call American IRA today at 866-7500-IRA(472), or contact us via the Web at


Real Estate IRA Trends for 2018

It looks like most of the easy money in real estate IRAs has been made. The National Association of Realtors is looking for slower rates of home appreciation in 2018, as the supply of homes for sale finally catches up with demand later in the year.

Inventory will remain tight, however, at least through the first quarter, but aggressive construction will make itself felt in the marketplace in the fall.  

There are still pockets of intense demand and shortage, and price trends are very positive for certain markets experiencing high job growth. The NAR expects a lot of new supply to come up for sale in the fall of 2018, so we may see some price weakness as we head into the 4th quarter of the year, says NAR chief economist Danielle Hall.

Sell to Millennials.

Millennials – those born between about 1980 and 1998, are now major players in the real estate market. Obviously, lots of these younger Americans will be renting. But they’re already major players in the homebuying market as well. More of them are qualifying for mortgages that are beginning to place them well beyond the “starter home” category.

Two-thirds of starter home buyers are Millennials. Though many of these young Americans currently rent, a substantial percentage are becoming major players in the homebuying market as well. Real estate IRA investors looking to gain the attention of Millennials and the younger family demographic should structure their investments accordingly.

Mortgage Rates Will Increase

Real estate IRA investors should lock in their rates early – and encourage anyone they are selling to to do the same. A combination of strong economic growth and tighter monetary policy and fear of inflation will create upward pressure on mortgage rates. Conventional 30-year rates could tick up to 5 percent by the end of 2018, projects the NAR.

Southern Markets Will Lead

We are happy to report potential real estate IRA prospects are strongest here in the South. The National Association of Realtors projects that southern markets will experience 6 percent growth, on average, compared to just 2.5 percent for the overall U.S. market. The South continues to generate substantial economic growth as employers flock to our warmer, milder climate. Both job growth and household growth are combining to make the southern and southeastern United States particularly attractive for real estate IRA investors.

Choosing Non-Traded and Private REITs For Your Self-Directed IRA

Real estate is a popular investment within self-directed IRAs. Investors love the tangible nature of land and property, the current income, potential for growth in rental income, and the potential for capital appreciation. There are also a number of tax advantages that apply to real estate that don’t accrue to other asset classes.

But not everyone wants to be a landlord. For those people, owning shares in a real estate investment trust (REIT) may be an option.

Often, people attracted to self-directed IRAs are also attracted to non-traded REITs… that is, real estate investment trusts that are not traded on the stock market and are not rated by investment analysts or widely followed.

About Non-traded REITs

Like exchange-traded REITs, non-traded REITs invest in real estate. They are also subject to the same IRS requirements that an exchange-traded REIT must meet, including distributing at least 90 percent of taxable income to shareholders. Like exchange-traded REITS, non-traded REITs are registered with the Securities and Exchange Commission and are required to make regular SEC disclosures, including filing a prospectus and quarterly (10-Q) and annual reports (10-K), all of which are publicly available through the SEC’s EDGAR database.

Private REITs

Not all REITs are subject to the SEC requirements above. There’s another category called ‘private REITs,’ which are exempt from the requirements listed above. These REITs may carry a higher yield, but they are also higher risk to investors. Generally, these are only available to accredited investors. They call for extra-thorough due diligence. But you can still own them with  a self-directed IRA.

The Liquidity Premium

Yes, shares in these companies can be difficult to sell, and you may have to pay a broker’s commission to unload shares for you. That’s true for direct real estate ownership in a self-directed IRA, as well.  But in the meantime, investors can enjoy a much greater income yield on the dollar. Why? Because liquidity and convenience come at a price. Investors tend to bid up prices on highly liquid publicly-traded REITs – which in turn forces down dividend yields.

If you’re really sharp about real estate, and you know how to do your own due diligence, and you want to maximize your income yield on the dollar, you might consider a privately-held, non-traded REIT for your self-directed IRA.

Before you invest, though, be sire to follow these tips for selecting the best REIT for your portfolio:

  1. Have a healthy appreciation for risk. It wasn’t that long ago that many REITs lost half their value as real estate values collapsed. Some cities like Miami, Las Vegas and Phoenix were particularly hard-hit. Geographic diversification matters – though some investors like making targeted bets on individual markets. If you choose a focused strategy rather than a diversified one, just be sure you have a reason for what you do, and it fits in your overall investment strategy.
  2. Have a long holding period. Because transaction costs with non-traded REITs are high (up to 15 percent), the best way to own a non-traded REIT is to plan on keeping it for many years. Think of it as a marriage, not a fling.
  3. Look closely at the dividend. Is it really from rental income? Or is part of it a return of capital? Return of capital is more tax-efficient, but it’s also kind of like eating your seedcorn. Besides – if you’re holding the REIT in a self-directed IRA, tax-efficiency is not a concern for you.
  4. Does the dividend exceed operating cash flow? If so, the REIT is eating itself alive trying to attract yield-chasing investors. They could be selling good properties or they could be paying dividends with borrowed money. Don’t get so hungry for yield that you don’t care where it comes from.
  5. How’s the balance sheet? High leverage can make a REIT shine for a while – in a good economy. But the more leveraged the balance sheet, the bigger the hit when markets turn on you.
  6. Is the REIT compliant with SEC filing requirements? If it’s behind or if its filings are incomplete, this is a very bad sign.
  7. What are the early redemption policies? Some REITs and private placements place restrictions on your ability to access your money for a number of years. Make sure your time horizon is longer than the lockout period!

Time to Winterize Your Real Estate IRA Properties

It’s that time of year again! The arctic winds are blowing, and freezing weather is already affecting our country’s northern regions. That means it’s time to take final steps to winterize your real estate IRA properties.

The first step: Educate your tenants.

Your tenants are your most important line of defense in preventing or mitigating damage to your real estate IRA property. They are in a position to directly observe trouble brewing, and to take steps to ensure the damage is minimal. But not every tenant knows how to winterize a home.

Most of them want to save money on utility costs, though, and so will generally be happy to read through a newsletter or pamphlet coaching them on how to winterize their homes. The Landlord Protection Agency has published this handy list of reminders that you can use to remind your tenants of their responsibilities. 

Here are a number of measures all self-directed IRA owners in cooler climates should be taking to protect your valuable real estate IRA investment.

1.) Have the furnace and chimney professionally serviced.

2.) Seal windows and doors. Install winter draping, if necessary.

3.) Flush the water heater. Flushing the system every two years at least can help remove mineral buildups that can harm the unit and the pipes.

4.) Inspect your roof. Ensure that there are no missing/damaged tiles or shingles. Remove leaves and other debris from the roof and gutters. This helps prevent excess ice and snow from accumulating and causing damage.

5.) Drain and store garden hoses.

6.) Blow out lawn sprinkler systems. Otherwise the water in your sprinkler pipes could freeze and cause a burst pipe.

7.) Change HVAC filters

8.) Remove window air conditioning units.

9.) Install insulated windows and doors.

10.) Prune trees and shrubs near the house. Snow and ice accumulating on trees can cause branches to collapse, damaging structures, autos and possibly people.

11.) Caulk or cover cracks in exterior walls. Cold air can enter through cracks in drywall, brick or any other material and eventually cause vulnerable pipes to freeze and burst.

12.) Wrap or insulate all pipes you can get at. Again, this step could be crucial in preventing pipes from freezing and bursting. This is important: A burst pipe can cause a lot of water damage in a hurry. Nationwide, the average cost to repair home water damage runs from $1,062 to $4086, according to research from Home Advisor.

Remember, one burst pipe or snow-damaged roof can destroy the profitability of a real estate IRA property for an entire year. Left unchecked, water damage from a burst pipe can cause drywall rot, lead to mold and even render a real estate IRA property uninhabitable.

The Tax Cuts and Jobs Act’s Effects on Real Estate, IRAs

The Tax Cuts and Jobs Act, the sweeping tax reform law signed into law last week by President Trump, includes some important provisions for our real estate investor clients, who hold investment properties inside and outside of their real estate IRAs.

Most notably for real estate investors, the new law rolls back the amount of mortgage interest that individuals can deduct for higher-priced personal residences. Prior to the passage of the TCJA, individuals could deduct the interest they paid on qualifying mortgages on balances up to $1.1 million. Under the new law, the mortgage interest deduction on personal residences is capped at $750,000. That’s still much higher than most homes are worth, but some larger homes and homes in more expensive markets will certainly be affected.

The change does not affect mortgages held within real estate IRAs or investment properties. Interest on investment properties is still fully deductible. But it could put a damper on the market for higher-priced homes in general.

An analysis by Zillow found that currently, 44 percent of American homes had mortgage interest payments that were high enough to make it worthwhile for taxpayers to itemize in order to deduct home mortgage interest. After the law takes effect, about 14 percent of them will be in that boat.

Real estate IRA owners, however, will be compensated by much lower taxes on income from traditional IRAs, including real estate IRAs. The same goes for self-directed 401(k)s, SEPs, SIMPLE IRAs and other tax-deferred retirement accounts.

First, your standard deduction is nearly doubling – up to $12,000 for individuals and twice that for married couples. So your first $12,000 or $24,000 of income is tax free.

Furthermore, the tax rates on taxable income are lower. So you pay a lower percentage of tax on income over and above your standard deductions.

The real estate industry hasn’t been entirely happy with the tax cut bill: Moody’s recently forecasted that the law’s provisions would result in 4 percent lower home values by the summer of 2019 than they would have had the bill not passed.  

The culprits? The combination of the cap on mortgage interest deduction, as well as a cap on state and local interest tax deductions that will affect people in high tax states.

That doesn’t mean Moody’s thinks prices will fall by 4 percent. Just that they are likely to rise more slowly than they would have without the bill.

According to Moody’s analysis, most of the negative effects on home values will be felt in pricier markets like San Francisco, Los Angeles and New York.