The proposed changes to the US tax code could have a tremendous impact on the real estate market. Here is my analysis of winners and losers with regard to real estate:

 
Winners
  • Renters - High standard deduction reduces the benefit of buying for most families, and effectively allows them to enjoy comparable tax savings as renters. 
  • Real estate investors - 25% taxation of passthrough entities could mean big tax savings, and importantly, many renters can afford higher rents under the proposed tax code, which improves cash flow for landlords
  • Residents of low tax states - State tax deductions will be capped, so for those in lower tax states (like Arizona), the benefit of higher standard deduction and lower federal tax rates will outweigh the cap.
  • Arizona - People and businesses will leave California and other high tax states in greater numbers, and many of them will choose Arizona. This will be good for job growth, and real estate. 
Losers
  • Residents of high tax states - Under the proposal, there will be many people who lose tens of thousands, hundreds of thousands, and even millions in deductions. I say, "Move to Arizona and your house is free" - the tax differential will mean wealthy Californians can buy a massive home and still have savings to spare.
  • Buyers of luxury homes - Only the first $500k of mortgage gets a deduction, chopping the benefit in half; however this only applies to new purchases, your current home is grandfathered. This is a double-whammy for buyers because not only do they get less of a deduction, it de-incentivizes people from selling their homes, and thereby reduces inventory.
The above is based proposed legislation, and there will almost certainly be substantial changes.
 
However, the intention of the legislators is quite clear. They've picked the winners and losers, and it's just a matter of how much they can get into the final legislation.
 
If I lived in a high tax state, I wouldn't be waiting to find out what happens next. I'd beat the rush, get my pick of Arizona real estate in slow season, and hope to be grandfathered in under the existing mortgage deduction.