Thinking of Upgrading to a New Home?
Is upgrading to a larger home on your radar? Selling and upgrading to a new home in New York City is not always so clear-cut. There are many moving parts to consider, not just how many closets are in the new place.
Keeping in mind the current state of the market now may be a better time to list your home then next year. Here are some factors to take into consideration.
- New York real estate market has been on the rise since 2009; however, signs are pointing to a plateauing of the marketplace. Properties are sitting on the market longer, with some dropping their asking price.
- There is a considerable amount of new inventory slated to come on the market over the next few years, which translates to increased supply in the marketplace and a watering down of prices.
- Rental prices have plateaued and landlords have started to give more concessions in order to get their properties rented.
- Today, many economies around the world are in flux. In the US, things seem to be quite stable and on an upward trajectory. However, in other parts of the world, things don’t seem so positive. If it isn’t the Greece bailout crisis making the news, it’s the fluctuations in the Shanghai Stock Exchange.
- The Federal Reserve has been talking about increasing interest rates for a while now, which will ultimately reduce the number of buyers in the marketplace.
- Next year we elect a new president. Whether its Hillary or Trump, this will have ramifications on things like taxes, policy, and ultimately how that trickles down to the economy and affect the real estate market.
When buying and selling, it is critical to time the sale of your existing home with the purchase of your new home. Things to consider:
- Do you need a mortgage to finance the new property? If so, do you need the proceeds from the sale of your existing residence to fund the purchase of the new place?
- Don’t forget all the closing costs. On the buy side expect to pay between 1-4%. On the sale side, it can range upwards of 8% or more. This will be the funds needed in addition to your down payment.
- Capital Gain considerations – With the way the market has grown, chances are you will make a significant gain from the sale of your existing home. This net gain means you will be responsible for paying capital gains tax unless you meet certain criteria:
If your property is your primary residence, you may qualify for an exemption.
Investors should look at 1031 exchange – a way for you to defer your capital gains liability.
Foreign owners should be aware of FIRPTA. The US government will hold back proceeds from the sale of a property until you have filed the necessary paperwork and pay the appropriate taxes owed.
For all these considerations and more, it is imperative to consult professionals every step of the way.
THE MODERN AGENT
Created out of the need to conduct real estate the modern way. Our group of talented agents focuses on providing a superior level of service in the industry. We specialize in properties like yours. Our award-winning marketing is unparalleled in the industry. Our team understands the complicities of upgrading properties like yours and we hold your hand throughout the entire process. Our team has relationships with some of the top new development properties, resale, and off-market listings in the city. We have a keen eye for design but are also focused on finding you a solid investment.
If you are considering upgrading your home in the next year, give us a call at 646.283.4525 or email email@example.com and we will guide you through all of your options.