We typically see a lull in sales activity during the summer, but an important topic has the industry rumbling. A proposed tax overhaul could drastically affect home owners, with the discussion including the removal of popular deductions like mortgage interest, state and local taxes, as well as property taxes. This will be a key factor to watch throughout the rest of 2017 and we will keep you updated on the progress of this new Trump tax bill.
Some other factors to consider:
- TOWNHOUSE CONTRACTS FALL BUT PRICES RISE Townhouse prices showed signs of recovery in Q2. While the number of contracts fell by 30%, the median price rose by over 9%. As far as where you can find the priciest townhouses in Manhattan, Greenwich Village commanded the highest average price in 2016, at $14.3 million, 70% higher than in 2011. Chelsea and Midtown East tied for lowest average price at $3.8 million, a 51% and 35% increase respectively over a five-year period.
- RENTAL VACANCY EXPECTED TO SPIKE According to a new market analysis By Ten-X, the vacancy rates for rental apartments could soar from a current 3.8% to more than 11% by the end of 2018. The reasoning is a surge in new construction. It’s also predicted that rents will fall as more and more new apartments hit the market. In August we saw median rents increase .03 percent relative to the previous month and 1.2 percent year-over-year.
- NEW DEVELOPMENT STAYS FLAT The average price for new development units stayed relatively flat, moving from $4.7 million in July to $4.6 million in August, continuing the downward trend since May. A total of 156 contracts were signed, 72 of which were Downtown.
- LUXURY MARKET CONTINUES COOL DOWN The first week of August saw only 14 contracts signed at $4M or more. The previous week saw 18 contracts signed, with an average of a 20% discount from asking price. This marked the 6th week in a row that the number of luxury contracts has fallen below 20. While sales in this segment picked up earlier in the year, the pace slowed significantly at the start of the summer. Over the past five weeks, there were 86 contracts signed above $4M. This is similar to the same five-week period last year, but 32% below the 127 that were signed in the same period of 2015.