Mastery of Research

A Note from Our In-House Economist, Greg Heym:

While it would be hard for the market to repeat what it accomplished last year, 2022 has started strong. Signed contracts in the first quarter were up from a year ago, which bodes well for second-quarter closings. Limited inventory has brought prices up sharply from their bottom a year ago, but not compared to the pre-COVID market. In fact, the average resale apartment price in 1Q22 was just 1% higher than the second quarter of 2018.

As the city’s economy continues to recover—which should be helped by the $45 billion in Wall Street bonuses last year—demand for apartments will remain strong, even as mortgage rates trend higher. With inventory still at low levels, sellers remain in charge, but should be careful not to push prices too much.

You can find the full report here

Interest Rates
Mortgage Rates 5.18.22.png

Courtesy of Wells Fargo

Rates shown are for purchase loans only. This information is accurate as of 5/17/2022 9:47:15 AM (CT) and is subject to change without notice.

Good News for Coop and Condo Owners! If you are the primary owner of a coop or condo which does not have another abatement, you may be able to apply for up to 17.5% off your 2022 property taxes. Please see the New York City Dept of Finance website which explains the abatement and includes the application form.

421-a applies to newly built, market-rate, multi-family housing units, whereas a rehabilitated or converted multi-family residential building is subject to J-51 tax exemption and abatement. 

Capital Gains

1. When you sell a capital asset, such as a home, for more than you paid for it, the result is a capital gain.

2. Capital gains are calculated based on your adjusted basis – what you paid for the home, less depreciation, plus any costs you incurred during the sale of the home and the cost of any improvements you made.

3. Capital gains and losses are treated as either long-term or short-term, depending on how long you held the property. If you hold the property for more than one year, your capital gain or loss is longterm. If you hold it for one year or less, the gain or loss is short-term.

4. The tax rates that apply to capital gains depend on certain income thresholds. The maximum tax rate on a long-term capital gain is currently 20 percent. Short term capital gains are subject to taxation as ordinary income. As regular taxable income, short term gains are subject to tax rates that range from 10% to 37% according to the U.S. income tax brackets.

5. Single taxpayers can realize up to $250,000 in tax free gain on the sale of a principal residence. Married taxpayers who file a joint tax return are entitled to an exclusion of $500,000. These exclusions cover any property that has been used as a principal residence for at least two of the five years preceding a sale. The deductions may be taken each time a taxpayer sells a principal residence, although the exemption may not be claimed more frequently than once every two years.

Courtesy of Schuman & Associates