We all know to beware land lease buildings (hello, Carnegie House!), but apparently the expirations of 421a abatements are causing problems for sellers of 421a units. https://www.nytimes.com/2019/12/06/realestate/the-taxman-cometh-for-some-condos.html "A 10-year sales analysis of 7,238 condo units with waning 421-a tax breaks showed that their sale prices grew by 12% in that time, compared to a... [more]
We all know to beware land lease buildings (hello, Carnegie House!), but apparently the expirations of 421a abatements are causing problems for sellers of 421a units.
https://www.nytimes.com/2019/12/06/realestate/the-taxman-cometh-for-some-condos.html
"A 10-year sales analysis of 7,238 condo units with waning 421-a tax breaks showed that their sale prices grew by 12% in that time, compared to a substantially stronger 29% in the overall condo market"
--> Along with the example of Chicago, this points to my thesis that property taxes matter greatly in determining home prices. The city's housing market must continually go up, since the city's massively inflating budget under Blas requires an ever-larger tax base so that annual increases on any individual home are kept reasonable. If new construction slows and prices fall, the tax base will increase slower than the city's budget, and the vicious cycle will be underway.
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Response by George
about 6 years ago
Posts: 1327
Member since: Jul 2017
P.S. I have no idea why StreetEasy doesn't recognize the use of the old-fashioned "enter" key.
One of the reasons people used to prefer Condos over Coops was because the monthlies were lower. But if you look at what the CC plus RET are going to be at full taxes on a number of units in some of these new buildings, if a similarly sized Coop had a monthly Maintenance fee that high people would refuse to buy them due to the "ridiculously high fees."
In addition the only reason a lot of these monthlies are tolerated is because they don't seem as bad relative to the extremely high prices. But if prices go down there will be a double whammy because all of a sudden people will take notice and the second and buyer takes notice if monthlies being high on a unit it can easily become the kiss of death.
P.S. I have no idea why StreetEasy doesn't recognize the use of the old-fashioned "enter" key.
https://streeteasy.com/blog/nyc-tax-abatements-expiring/
One of the reasons people used to prefer Condos over Coops was because the monthlies were lower. But if you look at what the CC plus RET are going to be at full taxes on a number of units in some of these new buildings, if a similarly sized Coop had a monthly Maintenance fee that high people would refuse to buy them due to the "ridiculously high fees."
In addition the only reason a lot of these monthlies are tolerated is because they don't seem as bad relative to the extremely high prices. But if prices go down there will be a double whammy because all of a sudden people will take notice and the second and buyer takes notice if monthlies being high on a unit it can easily become the kiss of death.