Framing On New Home Construction In Housing Development Getty

In the midst of the longest US government shutdown in history, a volatile stock market, global trade wars and Apple slashing its revenue forecasts to start the year, the question rings loud: How will the US housing market hold up in 2019?

A number of global economic sectors took a hit in 2018, while the US real estate sector only cooled in certain markets, though it did not crack. However, if housing gets a cold, banks and the financial sector get pneumonia. The global economy would surely be in trouble if the real estate market became a broad concern.

Given this potential for volatility, 2019 will be the most pivotal year in US housing and commercial real estate since the Great Recession. Here are 5 reasons why:

1. Opportunity Zones (Positive)

Opportunity Zones were created as a part of the 2017 Tax Cuts and Job Act, and they will have important ramifications on the real estate market in 2019.

Every governor in the US selected 25% of the low to moderate-income areas in each state to be the place where monies that would otherwise be paid to the IRS as capital gains taxes could instead be deferred, reduced and eliminated.

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Pundits have heralded this program as the most advantageous US economic development program in decades. In order to gain the maximum benefit, though, a taxpayer would have to defer his or her capital gains for seven years prior to 2026.

In other words, 2019 is the maximized benefit year for the Opportunity Zone program. How investors are able to manage through the Opportunity Zone program and its forthcoming guidance from the IRS will be critical to the US housing and commercial real estate market for 2019.

2. Changes To Mortgage Interest Deduction (Negative)

American families will receive their W-2s over the next few weeks and prepare their taxes before April 15th. Many do not recognize that the mortgage interest deduction that they have been used to was capped as a result about the 2017 Tax Cuts and Jobs Act.

The 2017 legislation limited the amount of…