The market for co-op and condominium apartments might be soft in New York City right now, but in suburban Westchester County, which has the highest property taxes in the country, buyers are shunning single-family homes in favor of co-ops and condos, Bloomberg reports.
In the fourth quarter of 2018, sales of co-ops jumped 16 percent from a year earlier and condo transactions rose 8 percent, according to a report by appraiser Miller Samuel and brokerage Douglas Elliman Real Estate. Purchases of single-family homes in the tony suburbs, meanwhile, fell for a sixth straight quarter.
Sky-high property levies – and Trump-induced federal tax law changes that reduced homeowners’ ability to write them off – have been scaring buyers away from large homes in Westchester. Suburban buyers now are seeking city-style living at attractive price points, with less upkeep and lower property-tax burdens, says Scott Elwell, Douglas Elliman’s senior executive regional manager for Westchester and New England.
The so-called Tax Cuts and Jobs Act of 2017 limits write-offs for mortgage interest, and it caps deductions for state and local taxes at $10,000 – well below Westchester’s average property-tax bill of $17,179 in 2017.
Purchases of single-family homes dropped 0.8 percent from a year earlier, according to the report, and inventory climbed. Meanwhile, demand for co-ops was so strong that it would take just 2.5 months to sell all the available units at the current pace of deals. That’s down from 3.7 months a year earlier.
The tax changes probably put “a little bit of a damper” on the sales of single-family homes in Westchester, says Steven James, CEO of Douglas Elliman’s New York City division. “By the second quarter, when people start paying their taxes and really see what the outcome of the change in the tax law is, I think you’ll continue seeing a decline in sales.”
That’s one way to Make America Great Again.
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