Scott L. Gibson's Real Story on Real Estate

Annual Harvard study for housing shows a lot of promise but also some roadblocks

http://www.jchs.harvard.edu/publications/markets/son2010/index.htm

New York City Market Update

By: Sharon Katzoff, VP
Associate Broker, Corcoran

Dear Friends and Brokers,

Now that we have come to the end of the first quarter, I thought I would update you on the state of the New York City market once again.  Things are picking up and it is a great time to buy here.
 
Corcoran has released its First Quarter Corcoran Report, First Quarter Corcoran Report  our quarterly survey of residential real estate sales in Manhattan.  This report compares data based on deals that closed in 1Q 2010 (January 1 through March 31) with those closed in the prior quarter and in the same quarter one year ago.

 

This quarter continued the price stabilization in residential real estate that began in the Fourth Quarter of 2009.  A number of significant factors contributed to the phenomenon, including continued low mortgage rates, renewed consumer confidence and the extension and expansion of the home buyer tax credit.  Market-wide, the average sale price and the average price per square foot of an apartment were up two percent versus last quarter; for re-sales only both statistics were up three percent.

 

The pent-up demand that carried over from 2009 is beginning to be released as buyers take advantage of reduced prices and the favorable financial climate to acquire homes.  As a result, 55% of Corcoran agents in Manhattan have reported experiencing bidding wars in the First Quarter, and almost all of them say that their buyers are buying because they need someplace to call home, not for investment purposes.

 

The window for buyers to act on their advantage may be short-lived.  Market activity is significantly higher in 2010’s First Quarter than it was in 2009, and we are seeing an increase in property coming on to the market.  I will be tracking this closely over the spring and summer months, and would welcome the opportunity to answer any questions you may have about the report or the market generally.

Please pass this report along to anyone you feel may be interested. 

Looking forward to speaking with you soon.

 

Sincerely,

Sharon

__________________
	Sharon Katzoff, VP Associate Broker Corcoran d: (212) 941-2573 f: (212) 415-6127 m: (917) 304-3658 490 Broadway, New York NY, 10012

Considering the Capital Gains Tax

Those that are thinking of selling properties that have capital gains better do so quickly as it appears the capital gains reduction that took place during the Bush years will expire at the end of 2010. In addition, the top personal income tax rates are also set to increase, so it could be a double wammy for you if you wait too long.

See below from Wikipedia:

In the United States, individuals and corporations pay income tax on the net total of all their capital gains just as they do on other sorts of income. Capital gains are generally taxed at a preferential rate in comparison to ordinary income. This is intended to provide incentives for investors to make capital investments and to fund entrepreneurial activity. The amount an investor is taxed depends on both his or her tax bracket, and the amount of time the investment was held before being sold. Short-term capital gains are taxed at the investor's ordinary income tax rate, and are defined as investments held for a year or less before being sold. Long-term capital gains, which apply to assets held for more than one year, are taxed at a lower rate than short-term gains. In 2003, this rate was reduced to 15%, and to 5% for individuals in the lowest two income tax brackets. These reduced tax rates were passed with a sunset provision and are effective through 2010; if they are not extended before that time, they will expire and revert to the rates in effect before 2003, which were generally 20%.

The reduced 15% tax rate on qualified dividends and long term capital gains, previously scheduled to expire in 2008, was extended through 2010 as a result of the Tax Reconciliation Act signed into law by President George W. Bush on May 17, 2006. As a result:

• In 2008, 2009, and 2010, the tax rate on qualified dividends and long term capital gains is 0% for those in the 10% and 15% income tax brackets.

• After 2010, dividends will be taxed at the taxpayer's ordinary income tax rate, regardless of his or her tax bracket.

• After 2010, the long-term capital gains tax rate will be 20% (15% for taxpayers in the 15% tax bracket).

• After 2010, the qualified five-year 18% capital gains rate (8% for taxpayers in the 15% tax bracket) will be reinstated.

New York City Market Update

By: Sharon Katzoff, VP

Now that everyone is back and has jumped into the New Year, I wanted to update you on the state of the New York City market, should you, your friends. family members or clients be interested in buying or selling a property in New York

I am happy to inform you that Corcoran has released its Fourth Quarter Corcoran Report, our quarterly survey of residential real estate sales in Manhattan.  This report compares data based on deals that closed in 4Q 2009 (October 1 through December 31) with that closed in the prior quarter and in the same quarter one year ago.

 

No doubt you have been following the economic news closely over the last year.  If so, you have had your eyes on the real estate market as a key indicator for economic recovery.

 

This quarter there is reason to be hopeful that the significant devaluation we have tracked since the demise of Lehman Brothers is coming to an end. Although values are down significantly compared with 2008 (median prices are 15% lower than they were one year ago; average price per square foot is 17% lower), prices in the Fourth Quarter were essentially unchanged from the Third, suggesting that buyers and sellers reached price equilibrium after twelve months of downward pressure. This was particularly apparent in the comparison of quarter-over quarter resales: the median price for a re-sold apartment in the Fourth Quarter was $725,000, down 3% from the prior quarter, while the average price per square foot rose 1% to $936.

 

In the past few months, smart buyers have been taking advantage of reduced prices, low interest rates and tax credits.  The Fourth Quarter was an extremely busy one for closings; when all deals are fully recorded in the public record, we anticipate this quarter will outpace the same quarter one year ago by 48% in number of sales.  In addition, the total available inventory has decreased 36% since the peak in March, restricting choice and increasing competition.

 

The combination of shrinking inventory, stabilizing prices and increased sales are hopeful signs for the value of real property as we enter the New Year.  I will be tracking them all closely as 2010 unfolds, and would welcome the opportunity to answer any questions you may have about the report, the market generally, or  just how to go about buying or selling in New York.

I look forward to hearing from you and hopefully assisting you with your New York City Real Estate needs. 

All the best for a prosperous and happy New Year!

Sharon_______________
	Sharon Katzoff, VP Associate Broker Corcoran d: (212) 941-2573 f: (212) 415-6127 m: (917) 304-3658 490 Broadway, New York NY, 10012

Why are you buying and selling your house backwards?

Buying a home is the only "process' where you are buying a major asset without knowing what you bought before you agree to a price. On the other hand, it is the only major asset that someone sells without knowing exactly what they are selling (condition) and what the costs of that sale may be.

Home sellers should enlist the aid of their real estate agent to do all of the necessary inspections needed to sell a home prior to putting it on the market. Those "inspections" include a home inspection, termite inspection, any special area conditions, and a preliminary title report. It would also be good to have a certified appraisal done on the house to go with your agents market analysis. Of course this may incur additional costs up front for the home seller, however the information gathered may save the seller money as they have a better idea of what it will take to sell the property.