Wont the new Trump/GOP tax plan reduce demand for housing?

[Jack B.]

In expensive markets like NJ, Seattle, expensive areas of CA, etc? I suspect the demand curve will shift unfavorably, at least for expensive properties. Cheap properties in the Seattle area around 350K and so may be considered a substitute good as they have far lower property taxes. I suspect that the demand for those will increase since most of what is being built are the 600-700K luxury houses with 7K property taxes per year and counting. On the 350K properties the taxes are closer to 4K, which is still within the limites of the new tax plant when you factor in SALT.

Seems like it would reduce the demand for expensive houses in Seattle while increasing the demand for starter homes. And since many trade up buyers would not want to take out a new mortgage over 750K, this would further reduce housing inventory. So demand and supply may both drop together for expensive houses and keep appreciation somewhat the same for them, while demand may increase for starter homes that they aren't building enough of...thus increasing their appreciation.

Thoughts?