The impact of the new tax rules and stripping of essential deductions seem undeniable, as Long Islanders feel the new housing market correction hitting home.
The next housing correction is here. It’s very real. What does it mean for homeowners on Long Island?
The New Housing Correction
While some are still trying to vehemently deny that the housing market is in free fall mode, the hard data tells a very different story.
Nationally both new and existing homes sales have been falling for months. In NY as many as 30% of sellers in some areas have been slashing their home asking prices. According to Bloomberg News, the Northeast is the hardest hit, with new homes sales falling an average of 51.3% and as far as 71.4%.
While the deepest property value cuts may not have shown up yet, you can bet they will follow. Especially with recent volatility in stocks and rising mortgage rates. As we’ve seen time and time again, when the market tries to correct, the fear grips the public and the industry and markets almost invariably over-correct.
Experts blame this gap squarely on the shoulders of the new 2018 tax rules and high property taxes.
What To Do
No one wants to see their home value plummet. It doesn’t feel good if you’ve accumulated a lot of wealth in equity in your Long Island home over the past 5 years. It can get even uglier if your value drops below what you owe on mortgages and any past due property taxes. Then you may not be able to sell. What can you do?
Many will also find the biggest potential savings in challenging their property tax assessments and tax bills. Property Tax Adjusters, Ltd. can help you with this, potentially saving thousands of dollars each year.
An alternative option is to sell your Long Island home quickly. Do it and cash out and keep the equity windfall you have before it evaporates. The only problem with this path is where you live next. Rents may come down too, but they aren’t fully corrected yet.
Or go find a much better deal on an auction property. These are properties others have lost due to the downturn in 2008-2011 as well as to being unable to keep up with Long Island’s notorious property taxes. Suffolk County just held two real estate auctions to unload a large number of properties.
If you really can’t or don’t want to leave, then it is important to do everything you can to minimize your housing costs. If you need to replace any appliances, make sure you opt for the most energy efficient versions to keep your utility bills down. Check in with your insurance agent, and see if you can gain any new discounts, or revise your coverage down as your property value goes down. If you still have enough equity, refinance your mortgage on a long term fixed rate loan before interest rates go higher.