Everyone is trying to search and locate the best and most ideal home for their hard earned money that they have to spend in today’s hot, hot market.
As the interest rates increase, there appears to be a last-minute, mad rush to put offers on their “American Dream.”
Even co-ops, which use to be shunned by many groups are now being snatched up by those who would have never given a second thought to purchase them, unless it was a condo.
But as prices have increased on houses (we are about 5-7 percent off the highs of 2007-2008), co-ops and Condos are being bought instead due to the lower price points, affordability and less daily maintenance (sometimes they are already in excellent or mint condition); no worries about plumbing, heating, electrical, roof repair, windows, property maintenance, etc. (although anything inside the units are the responsibility of the stock holder/owner.
Turn the key and go to work the very next day or go out to play! It’s amazing how school district No. 7 (especially south schools) escalates the home prices in those homes in New Hyde Park by, in some cases $100,000 or more, depending on the style and upgrades!
I have a home in New Hyde Park that had offers the very night I placed it online the other week; partially due to our amazing 3D Tours, interior layouts and quality pictures; and is now hopefully going to contract shortly.
The other factor is the lack of inventory, which I have talked about in past articles. With less than 4 months inventory and interest rates at 62-year lows, this has proven a bonus and windfall to those who are contemplating selling or who are ready to sell now.
However, if you aren’t ready, I can understand that you have built roots in your community and are very happy staying in place and retrofitting to make it easier to get around in the future!
But keep in mind, I do not see rates ever going back to 2.5 percent to 3.5 percent again. So as rates go back to, what I feel will be 6.5-7 percent over the next three to five years, demand will lessen and this will assuredly have an effect on prices, most likely leveling them off and I believe they will come down off their highs where they are at the moment. So selling now will conserve more of your equity than waiting.
More important, you never know what additional changes might occur in the tax code; maybe Trump will pass another new law reducing the $500,000 tax exempt profit for married couples and $250,000 for singles.
I am sure the government would love to get more money out of us, as they have been doing lately. That $10,000 maximum S.A.L.T. (State and local taxes) deduction is and will have a pronounced and prolonged effect on those homes with higher taxes and I have already seen it happen around Long Island and New York City.
Those that are truly wealthy will not really worry about it, unless psychologically, it turns off a portion of those individuals or families uncomfortable in purchasing those types of high priced, high tax properties. Some will buy the lifestyle, more than just a home.
All those creature comforts that go along with their location. For families, excellent and superior schools will still be a crucial and critical consideration and an overriding factor to move into an area.
Private schools may be the preferred choice of those wealthy and ultra-wealthy who can afford and don’t mind shelling out $40,000-plus and paying New York City income taxes, which we in Long Island are not subject to.
Also, even our water bills out in Long Island are considerably less than city water and real estate taxes are lower, depending on the type of purchase one is looking for.
So when you add the private school, real estate and city income taxes; it’s a reason why many are moving their residences and businesses to the “burbs” to actually save money! Queens and New York City real estate taxes have been going up over the years and my personal opiion, is that the quality of life and lifestyle is better out in Long Island than in NYC.
However, there is much to do in New York City, as long as you can afford the lifestyle, enjoy the subways and smells and constant noise of the “big apple” If you are single, the city is where it is at, if you can afford it; however, as you get older, get married, have children, the city can look less inviting to your specific, “needs and wants” as your family grows.
Lifestyle is very personal and one will hopefully choose one that suits them; however, change is never ending and what one thoroughly enjoyed today maybe be different down the line.
Phil Raices is the owner/broker of Turn Key Real Estate 3 Grace Ave Suite 180 in Great Neck. He has earned the designations as a graduate of the Realtor Institute and is a certified international property specialist. He can be reached by email:[email protected] or by cell (516) 647-4289 to answer any of your questions or article suggestions or provide you a free comparative market analysis on your property.