Madison Financial Planning Group works with a lot of retirees and near retirees. Morgillo says the tax changes have not yet prompted clients to change their retirement plans. “I would not be surprised to see some of them move to more tax-friendly states when they get ready to retire. Others may have second homes in Florida and decide to make that their primary residence because of the lower taxes.”

The overall effect on the real estate market may be to push it from the current sellers’ market to a buyers’ market, Morgillo says. “Winter is a slow time in the real estate market anyway, but in the spring we may see the market price in the tax changes.”

“We have not seen anyone actually move because of the tax changes, but we have had clients ask about it,” she adds. “The tax law changes will make more work for advisors, but it will also make advisors more valuable.”

Keith Moeller, a wealth manager, advisor and CPA with Northwestern Mutual who is based in the firm’s Minneapolis office, agrees. “It is common after something like this for clients to pick up the phone and ask what they should do. We remind them that their financial decisions should be made as part of a life plan. We do not want the tax tail wagging the planning dog. But some people are thinking what they want to do to avoid high Minnesota taxes now that they may not be deductible.”

One Northwestern Mutual client who Moeller works with is now deciding whether to take a mortgage on a new property or just pay for it outright since not all of the interest will be deductible, Moeller says.

“Another client has a business in Minnesota [which has a relatively high state tax rate] and another business in Arizona, so he is going to declare his residence in Arizona, in part because of the tax-reform changes,” he adds. “In each case, we look at the client’s goals and then decide how to proceed.”

The Tax Cuts and Jobs Act will also affect real estate investments, according to advisors. One of the changes is a deduction of up to 20% for pass-through entities on qualified business income, which means many people investing in real estate may not have to pay income tax on the first 20% of income from the investment.

“Some clients may want to reclassify their vacation homes as rental property or mixed-use property. That is a significant planning opportunity to enjoy a vacation home and still get a tax advantage,” Brownlee says.

Yuen Yung, CEO of Casoro Capital, a real estate investment company in Austin, Texas, says many people are getting excited about investing in real estate. “Financial advisors have an opportunity to help clients by shifting investments to real estate and REITs. The multiple-unit housing sector, student housing, family apartment complexes and senior living homes should be attractive to investors,” he says. “The 20% pass-through should be good for real estate investing. This is a time to think about shifting investing to real estate and REITs.”

Matt Kopsky, a REIT analyst with Edward Jones in St. Louis, feels the 20% pass-through rule is one of the most important changes of the new tax law. “This is a great incentive to invest in real estate. The details are still being worked out, which may keep some investors sidelined for a while, but this is a net positive from the tax reform law. The real estate market may not have benefited as much as some corporations through the changes, but that does not mean there was a negative effect on real estate investments.”