News & Insights

Home » News & Insights » Manhattan home prices continue slide as ‘gentrification’ tax is floated in state legislature

Manhattan home prices continue slide as ‘gentrification’ tax is floated in state legislature

Finance and Securities, NYC, Other, Real Estate Developments, Real Property

Analysis of fourth quarter real estate data for 2019 arrived today courtesy of the Financial Times, and although declines in sales prices in Manhattan were not as steep as during the third quarter, they remained markedly lower. While in Q3 average prices fell by 13% year on year (the steepest fall since 2009), Q4 prices fell by “only” 7.5%. However, the overall volume of sales only fell by 1.2 percent. Other notable shifts in the market are a retreat from all-cash purchases, largely a product of very low mortgage rates, as well as remarkably long average time on the market for new properties at 377 days, more than double the average for the rest of the market. [1]

In other real estate news, a bipartisan group of state legislators representing New York City in Albany have begun a concerted push for a “gentrification tax” to be added to state law. The goal of the legislation would be to change the way property taxes are administered, which sometimes allows homes that sell for high prices to be assessed at below-market rates for tax purposes, saving new owners considerable amounts on taxes. The proposed legislation would require new buyers to pay property taxes on the market rate instead of the assessed value. The proposed legislation has been dubbed a gentrification tax because it would penalize new buyers while holding property taxes steady for existing owners. Despite broad support for the law among state legislators representing NYC, it remains to be seen how the proposal will fare among the broader body of state legislators. [2]

[1] Fortado, L. (January 2020) Manhattan property slump worsened as Wall Street boomed from Financial Times https://www.ft.com/content/a8a8160a-2dac-11ea-bc77-65e4aa615551 Accessed January 3 2020

[2] Marsh, J. (December 2019) City lawmakers want to impose gentrification tax from NY Post https://nypost.com/2019/12/25/city-lawmakers-want-to-impose-gentrification-tax/ Accessed January 3 2020

Recent Posts

Is Your Co-Op or Condo ADA Compliant?

A shareholder in your co-op has recently become disabled and your building’s entrance is not fully accessible. Is the co-op responsible for modifying the entrance so it accommodates the disabled resident? Accommodations required by Title III of the American...

Should You Buy a Condo or Co-op Through an LLC?

Buying an apartment through a Limited Liability Company or LLC may be a way to limit personal liability or protect assets, but it may not be a viable option.  Even if it is, it might not be worth the trouble. In the first instance, the purchase of a cooperative...

Can Adult Children of Co-Op Shareholders Live in the Unit?

When it comes to allowing adult children to live in a co-op without the shareholder, a host of questions come into play, including the co-op’s rules about subletting and the terms of the proprietary lease. In a prior post about subletting a co-op, we explained that...