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· Grand Imperial Poobah
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https://www.foxbusiness.com/real-estate/nyc-housing-prices-near-free-fall-recession-era-tax-hikes

NYC housing prices in near 'free fall,' conditions mirror recession era following tax hikes

The Manhattan real estate market stumbled in the third quarter of 2019, new reports show, as prices plunged and fewer buyers were willing to purchase higher-priced properties in the wake of two recent tax increases.

The median sales price for properties fell 17 percent from the same quarter last year, to $999,950, according to new data from CORE. The average sales price dropped 12 percent, to $1.64 million.

Condo sales fell 8 percent, logging 946 transactions. Co-op sales, on the other hand, were up a modest 2 percent year over year.

“The third quarter of 2019 was undoubtedly the most challenging quarter in recent memory, especially for condo sales,” Garrett Derderian, managing director of market analysis at CORE, said in a statement. “Market prices have gone from what was once described as the kindest, gentlest correction to a near free fall. The last time conditions were described in such a way was in the height of the recession.”

Only 9.7 percent of sales were above $3 million, down 14.8 percent from last year. The last time sales above $3 million were that low was in 2012.

Consequently, nearly 30 percent of inventory on the market was priced above $3 million.

It’s worth noting that many buyers rushed to purchase properties before an increase in the city’s mansion tax and transfer tax took effect in July.

“Third quarter data reflects a more accurate snapshot of the current market – continued price correction,” Diane M. Ramirez, Chairman & CEO of Halstead, said in a statement.

Halstead’s own report released on Wednesday showed Manhattan apartment sales fell 16 percent in the third quarter – with sales above $5 million dropping nearly 50 percent.

Properties, meanwhile, spent an average of 192 days on the market – the highest quarterly total since the final quarter of 2012.

In July, New York City increased its mansion tax – a progressive tax that applies to home sales of more than $1 million – to a maximum of 3.9 percent, up from a flat-rate of 1 percent. The tax rates vary from 1.25 percent for $2 million sales, to 3.9 percent for sales of $25 million and higher. The city also increased a one-time charge on properties worth more than $2 million – known as the transfer tax. That fee, typically paid by a seller, varies from 0.4 percent for transactions under $3 million, to 0.65 percent for anything above $3 million.

As previously reported by FOX Business, more than 25 percent of new condos that have been built in New York City since 2013 remain unsold. In terms of units – of the 16,242 condos built since 2013, about 12,133 have sold. That means more than 4,100 have not.

Experts have said the trend could be indicative of a potential future recession.

Falling real estate prices come as concerns mount over the new tax law’s impact on high-tax states – particularly a $10,000 cap on state and local tax (SALT) deductions. Some people have begun fleeing states like New York and New Jersey, headed for lower-tax areas like Florida and Texas.

New York was one of a handful of states dealt a blow in its bid to challenge the SALT cap this week, after a judge dismissed its lawsuit.
Falling housing prices (caused by the auto industry closing shop) is what started Detroit's downfall. Maybe NYC is on the same course?
 
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Progressives love to tax (soak as they say) the rich and many are finally saying that living there is not the big deal it used to be. Same for San Francisco
 

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Bring that money down south, but leave your liberal politics up north.
Except they don't leave their politics behind, which is why many former solid red states are either purple or blue or have large blue areas. Virginia, Florida, North Carolina, Colorado, Nevada, parts of Texas, etc.
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· Grand Imperial Poobah
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Except they don't leave their politics behind, which is why many former solid red states are either purple or blue or have large blue areas. Virginia, Florida, North Carolina, Colorado, Nevada, parts of Texas, etc.
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There is a suburb of Raleigh, NC (state capitol) called Cary, NC. Over the years, enough northerners have relocated to Cary, that the running joke is that Cary stands for 'Containment Area for Relocated Yankees'. Unfortunately, the northerners have brought their politics with them, because Cary is a liberal craphole, where they pass the stupidest laws.
 
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Money is mobile. Tax-the-rich politicians ignore this fact.


Thomas Sowell, 5/17/2011: When the tax rate on the highest incomes was 73 percent in 1921, that brought in less tax revenue than after the tax rate was cut to 24 percent in 1925. Why? Because high tax rates that people don't actually pay do not bring in as much hard cash as lower tax rates that they do pay. That's not rocket science.


Then and now, people with the highest incomes have had the greatest flexibility as to where they will put their money ...


Most working people don't have the same options. Their taxes have been taken out of their paychecks before they get them.


Even more so today than in the 1920s, billions of dollars can be sent overseas electronically, almost instantaneously, to be invested in other countries ...


After Maryland raised its tax rates on people making a million dollars a year, there were fewer such people living in Maryland -- and less tax revenue was collected from them.


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Leslie Stahl, narrating, 60 Minutes, 8/14/2011: If they bring the money home, it's taxed the full 35 percent ... In other words, the tax law all but forces companies to keep their money out of the country, indefinitely.



John Chambers of Cisco Systems: We leave the money over there. I create jobs overseas; I acquire companies overseas; I build plants overseas; and I badly want to bring that money back ...


Leslie Stahl: Chambers is advocating for a one-time tax break to allow them to bring that money home at a rate of, say five percent. That would, he says, stimulate the economy and create jobs.


John Chambers: What is your downside for money that isn't going to come back anyhow? I'd say your downside is zero ...


Leslie Stahl: You lower the rate from 35 percent to 20 percent. You lose something like $2 trillion in taxes. We have a horrible deficit crisis, debt crisis. That's almost too much money to lose. What's your answer to that?


John Chambers: My answer's very simple: every other developed country in the world has already done this. I'm not asking to give me a favor ...
 
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