Tax Benefits of Home Ownership Coming Back?
Updated: Nov 20
The reconciliation bill working its way through Congress may end up having an impact on New York City's residential marketplace. Driving some of the valuation declines in recent years was the implementation of a State and Local tax deduction cap of $10,000 in 2017. This placed a larger financial burden on homeowners in high tax states like New York, New Jersey, and California. With the potential of an $80,000 deduction for ten years in the House bill, there's the possibility for significant movement in the cooperative and condominium markets across New York City.
The House plan would cut taxes for more than 70% of households making more than $200,000, according to the Tax Foundation. Measured as a share of after-tax income, the largest benefits would go to households making between $500,000 and $1 million (WSJ).
A few other notes around Olde New York:
New York City's residential market is on fire with the setbacks in pricing due to COVID largely eroded. But there is still discounting baked in from the peak of the market in 2016 which signals buying opportunities given the value of a dollar inflated by 15.73% since then.
Looking for value? With supply chain issues impeding work the gap between renovated and un-renovated homes grows:
Workers are still taking their time to get back to the office but that hasn't stopped tech giants from taking more space. Microsoft just signed on for 150,000 square feet at 122 Fifth Avenue in the Flatiron District.
Over 4,600 Manhattan condo and co-op sales closed from July through September. This is the most third-quarter sales in over three decades.
Mortgage Rates are rising but still near historical lows: The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 3.30% from 3.23%.
Eric Adams to become New York City's 110th mayor. Real estate professionals are optimistic about his approach to the industry and are drawn to his moderate politics and firmer stance on crime.
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