Investors sold off shares of Denver-based Re/Max Holdings Inc. Friday on concerns that changes in the federal tax code could cool home sales in the years ahead.
J.P. Morgan analyst Anthony Paolone downgraded shares of the Denver-based real estate brokerage from neutral to underweight and took his target price down from $59 a share to $51 a share.
Under changes before Congress, borrowers will receive less favorable deductions for local property taxes and mortgage interest than now available. Owners must also hold their homes longer to avoid paying taxes on capital gains, which could reduce the supply of listings.
Shares of Re/Max Holdings fell $4.25 or 8.4 percent on Friday to $46.25, their lowest level since November of last year. They are down 17 percent for the year.
Re/Max shares were already under pressure following revelations last month that the third quarter earnings would be delayed pending an internal investigation into an undisclosed $2.38 million loan that founder and co-CEO David Liniger provided to co-CEO Adam Contos.