It’s important to understand the impact SALT has had on luxury homes.
State and local taxes have been impacting luxury home sales the most, but have also effected resale of all price points—particularly in states with higher property taxes. As an agent, you need to understand and articulate this to your seller clients if they wonder why showings have gone down in our market.
When property taxes are higher, people can afford less of a home. Granted, the Federal Reserve recently lowered interest rates, which means buyers can afford more of a home, so that has helped the situation.
Show buyers that even though the taxes are high, the pros outweigh the cons.
As I’ve talked about in the past, my team and I produce a weekly podcast called “Luxury Listing Specialist,” and on Episode 80 we had Jennifer Ames of Engel & Volkers join us to talk about SALT. I saw Jennifer speak at an Inman conference in the fall of 2019, and I was very impressed because she discussed how SALT has had a big impact on Chicagoland home prices due to rising property taxes.
In most markets, anywhere from 50% to 70% of your property taxes go toward local municipalities to pay teachers, policemen, etc., and their salaries aren’t decreasing. If anything, they’re either stabilizing or going up. In Illinois, our pension crisis has further increased property taxes.
It’s like coaching your kids’ soccer team: You don’t tell them to go where the ball is—you tell them to go where it’s going to be. You need to know where taxes are going and how to overcome potential objections for your listings. Make sure they have amazing photos and descriptions. As we know, people buy on emotion, and justify on logic. Hit those emotional hot buttons with lifestyle videos and descriptions. Show buyers that even though the taxes are high, the pros outweigh the cons.
As always, if you have questions about this or any other topic, don’t hesitate to reach out to me. I’m here to help. Keep raising the bar in real estate!
Next week we’re offering the first-ever virtual, interactive, live Global Luxury Designation Training. This training is open to all agents and brokers from ALL companies. If you’re looking to work smarter, not harder, and increase your average sale price during and after COVID-19, you should seriously consider the LUXE Designation. No previous luxury home sales are required to become a Certified Luxury Specialist!