New Jersey’s real estate market is likely to suffer, at least in the short term, from the changes created by the federal tax reform passed by Congress, according to most analyses.

The impact could be extensive. Moody’s Analytics says 15 of the 30 counties that will be hardest hit by declines in home values are in New Jersey, with values in nine counties – Essex, Union, Passaic, Hunterdon, Gloucester, Mercer, Somerset, Bergen and Camden – projected at 9 percent to 10.5 percent less than would have been expected if the tax laws didn’t change.

Real-estate attorney Alan Hammer, a partner in the Brach Eichler law firm in Roseland, said the rental market might actually benefit a bit but that there’s no question house prices will suffer.

“So we’ll get used to it – maybe. But in the short run it’s going to hurt people. It’s going to cost people money,” Hammer said.

By nearly doubling the standard deduction, fewer people will itemize — limiting the tax-related incentives associated with owning a home and leading to fewer buyers. Also, interest on mortgages over $750,000 won’t be deductible, and the state and local property tax deduction will be capped at $10,000.

ATTOM Data Solutions says nearly 4 percent of home sales in New Jersey this year involved mortgages of $750,000 or more. It says property tax bills exceed $10,000 on more than one of every four single-family homes and condos in the state – more than 630,000 households that will be clipped by deductibility limit, without even counting people’s state income taxes.

The changes will affect areas with high-cost housing the most, but they won’t bear the brunt exclusively, said Jarrod Grasso, chief executive officer of New Jersey Realtors.

“This is going to have an impact on all home values here in the state of New Jersey,” Grasso said. “They might not be impacted as high as 10 percent, but I believe that the impact will be felt far and wide, from Cape May County all the way up to Bergen.”

Zillow says the share of homes where deducting property taxes and mortgage interest will be worth taking, compared with a standard deduction, drops significantly – including by 7-in-10 homes in Middlesex and Passaic counties.

Hammer says the loss in home equity will dwarf the tax savings touted by Congress. He said he doesn’t think current homeowners will flee but that it will make newcomers or renters more wary and reduce sale prices.

“This is going to be much more painful than the $1,000 that people are going to save. It’s going to affect us by many thousands, not a thousand or two. It was almost punitive,” Hammer said.

Among the tax breaks New Jersey allows is that taxpayers can deduct up to $10,000 of their property taxes when calculating their state income taxes. That cost the state treasury around $460 million this year.

Gov.-elect Phil Murphy he’s willing to consider eliminating the state’s $10,000 cap on property tax deductions, as Gov. Chris Christie floated Wednesday, even though the Christie administration says it would cut state tax collections by another $150 million to $170 million a year.

“Everything has to be on the table,” Murphy said. “That’s by a long shot not a crazy idea. Some ideas out there are crazy and really disturbing, but that’s one that needs to be on the list to look at.”

“We’re being assaulted by Washington and by this tax bill. So we can’t sit on our hands. We cannot sit idly by,” said Murphy, who also raised the prospect of a lawsuit challenging the constitutionality of the tax changes, which cap a tax deduction in effect for more than a century.

Grasso said it would be “a bold initiative” showing the state won’t just accept the expected impact on home values.

“And it’s going to hopefully lead to alleviating some of the pain that we’re going to feel because of the tax reform plan,” Grasso said.

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Michael Symons is State House bureau chief for New Jersey 101.5 and the editor of New Jersey: Decoded. Follow @NJDecoded on Twitter and Facebook. Contact him at