If you’re thinking you’re safe if the purchase price is less than $1 Million, but are paying fees or taxes that would have otherwise been paid by the seller, think again.  Those fees become part of the consideration for the property and could lead to being responsible for the Mansion Tax.

According to Joel E. Miller, a Queens tax lawyer, although the mansion tax is not deductible, however it does increase the property’s tax basis so it will ultimately reduce the tax paid on a gain on the sale of the property.

MARKET RECAP

Were we smart or lucky? We’d like to think smart, but we won’t discount luck either. We are speaking of the housing sales trend that unfolded after the tax credits expired at the end of April. We noted back in May that we expected sales to dip post-tax credits, and they did. We also noted that we expected sales to rebound once the market became acclimated to standing on its own feet, and that appears to be occurring.

Indeed, sales of existing-homes strengthened across all categories to jump 10 percent in September to 4.53 million annualized units, while sales of new homes rose 6.6 percent to a 307,000 annualized rate. The surge in sales helped push supply down to 10.7 months for existing homes and down to eight months for new homes.

The obvious question is how much discounting was required to stimulate sales? It appears some discounting occurred, when holding sales composition firm. The national median price for existing homes fell 3.3 percent to $171,700, with the average price falling 3.5 percent to $218,200. Meanwhile, the median price for new homes rose 1.5 percent to $223,800, with the average price dropping 1.2 percent to $257,500.

We’ve been vocal in our belief that home prices have stabilized. We stand by that sentiment, even though we wouldn’t be surprised to see some price volatility over the next month or two, thanks to the brouhaha over the foreclosure processes of the large banks and the expectation that foreclosures could swell into 2011.

That said, it’s important to remember that the housing market is much more orderly and stable than it was a year ago. All the malinvestment and all the excesses of yesteryear have percolated to the surface. We know what we are dealing with, which means foreclosures will certainly be handled in manner that won’t be too disruptive to the market. After all, the people selling foreclosed houses still want to sell at the highest price possible; the highest price possible isn’t achieved by flooding the market with inventory.

As for the foreclosure-servicing issues, the NAR warned that a single related court order could take 20 percent of the homes off the market. We’re somewhat circumspect. To be sure, an unfavorable court order could happen, but the pressure is great for it not to. If we were to balance the odds on a scale, we think the scale favors it not occurring.

As for balancing lower or higher mortgage rates, we side with higher. That’s not just our opinion. Bill Gross, a highly respected bond manager at PIMCO, noted this past week that a Fed announcement on additional monetary easing “will likely signify the end of a great 30-year bull market in bonds.” In other words, Gross expects bond prices to fall and interest rates to rise, which would translate into higher mortgage rates.

Let’s Get On With It

The time for waiting has ended. Confidence will return; that is, if it hasn’t already returned. Merrill Lynch reported on Bloomberg this past week that Americans – at least those with a few dollars to invest – are feeling more financially secure today than they were a year ago. Merrill surveyed 1,000 people with investable assets of at least $250,000 and found that 78 percent of those surveyed are confident their economic circumstances will improve in 2011.

For everyone else, confidence is within reach. Claims for jobless benefits unexpectedly dropped last week to a three-month low, an optimistic indicator that the U.S. labor market is on the mend. What’s more, the total number of people receiving unemployment insurance dropped to a two-year low. Meanwhile, consumer spending – a direct measure of consumer confidence – continues to move higher, and could give employers reason to add workers ahead of the holiday shopping season.

We think this latest slate of good news portends a robust economy for the New Year, which is why we think the opportunity to take advantage of historically low mortgage rates and low housing prices is dwindling for this year.

Graph Courtesy from NY Times in an article by Lynnley Browning  October 29, 2010.  Data and Commentary provided by Fred Ashe, from DE Capital Mortgage.

Daniel Radcliffe buys Manhattan townhouse in West Village

Daniel Radcliffe, the 20-year-old Wizard in Broadway’s Harry Potter production, has purchased his third New York City property, a five-bedroom, 3,000-square-foot West Village townhouse.  The price:  $6.4 million.

Celebrity publications report Radcliffe now owns more than $16 million in Manhattan area condos and apartments, plus a luxury condo in his home United Kingdom neighborhood of Fulham in London.

As reported by Real Estate Channel

From Future Of  Real Estate Marketing

A "Wordle" of 2br/2bth co-ops & condos =>$1M in Manhattan

In a recent Marist poll, nearly half of Americans – 47% – said they find “whatever” most annoying.  The other sayings weren’t quite so loathed.  25% say they find “you know” most grating; 11% can’t stand “it is what it is”; 7% would like to ban “anyway” from all verbal exchanges; and 2% reported that they could do without hearing “at the end of the day.”

After reading thousands of Manhattan apartment descriptions, I have come up with my top  list of  real estate words and phrases that I find most annoying:

1. Boasts
2. Oversized (also ample or generous)
3. Sun-drenched
4. Residence
5. Triple mint

Here’s a “finger-nails-on -the-black-board” apartment description:

This triple mint, sun drenched apartment boasts oversized windows and generous maintenance.  You must call me for the non-negotiable price, a private showing or whatever. Anyway, if you have to ask the price this residence may not be for you. You know, at the end of the day it is what it is.