Page 17 - New England Condominium April 2019

NEWENGLANDCONDO.COM NEW ENGLAND CONDOMINIUM - APRIL 2019 17 185 Devonshire Street, Suite 401, Boston, MA 02110 Quality Representation at Reasonable Rates. (617) 988-0633 Contact Attorney Frank Flynn: FRANK@FLYNNLAW-NE.COM Flynn_E4C.qxp:Layout 1 12/8/14 2:30 PM Page 1 as a whole, and the result is a large number see the market going much higher, either.” of very small associations. “Resale of these units are strong,” Woofter says. “They are sons behind the stagnation and possible im- typically the ‘starter home.’” Even what were pending decline in the Chicago residential once less popular areas like Roxbury are market include outmigration, property tax- now coming around in this sub-market. Woofter thinks Boston is still a robust J.B. Pritzker’s new state tax structure, and seller’s market. Available housing stock for the still-resonating impact of the change sale is still very low, and he isn’t expecting in federal income taxes in 2017. Illinois in a correction. “Existing zoning regulations general – and Chicago in particular – is one don’t provide for new housing,” he says. “Ad- ditionally, most new condominium build- ings don’t have rental restrictions, and many last year. foreign buyers continue to buy units simply to protect their wealth, even though they recent years, according to IllinoisPolicy.org, don’t live in the unit.” New York According to Corcoran’s 2018 fourth ductibility for state and local taxes, local tax quarter report: “Market-wide closed sales burden has had an increasingly dampening declined as potential buyers grappled with a effect on the market. Another tax issue is the confluence of factors that created uncertain- ty in the market. Buyers’ concerns included new governor. rising mortgage interest rates, tax-law re- form, volatility in the financial markets, good fight in the field every day may see foreign capital restrictions, and political dis- tractions. As a consequence, many prospec- tive buyers are choosing to wait on the side- lines until prices adjust to a more accessible Gail Spreen, Senior Vice President of Sales level and other market factors calm.” Joanna Mayfield Marks, a broker with says: “2018 was a reasonably good year, the New York-based firm Halstead, de- scribed the market this way: “In 2018, there neighborhood. Projections are that 2019 were a couple ends of the market that were will be similar. We see a 2- to 4-percent in- less impacted. We saw a number of buyers crease in prices and volume in the coming competing in the $700,000-to-$1.5 mil- lion segment. There was competition, and can’t really push the market, because it’s not even some bidding wars. In the lower and there to be pushed. It’s generally more of a luxury segments, though, we saw fewer buy- ers, and no bidding wars. What I’m seeing right now is that competition is beginning reflect the concerns described above about to return. I’m seeing positive reports about Chicago’s markets. “People are re-evaluating the economy, consumer confidence is better, the own versus rent equations in light of the and interest rates were down at the begin- ning of the year. So even at the lower end of still be the biggest draw, though, and there the market, things appear to be picking up. are healthy sub-markets in River North and The truth is that interest rates – even small the West Loop. increments like a quarter point – affect the market. Two-bedroom units seem to be the most competitive right now. There are even strongly in the last three years without multiple bidding situations. Essentially, significant demand from South America things look positive.” Chicago “Chicago isn’t one of the cool kids any- more,” according to an article in Crain’s Chicago Business from last October. The That, plus shrinking inventory, should cre- Windy City is ranked 49th of 79 markets ate a very robust year for condo sales in the in the ‘Emerging Trends in Real Estate’ sur- vey, down from 42nd last year. The overall feeling is one of caution. “Wherever they in Aventura, Florida, fleshes out Bisnow’s put their money, survey respondents were comments. When it comes to overbuilding, cautious about the direction of the broad- er market,” said the article, “wondering she says. There was little new construction how much longer the good times will last. after the bubble burst, then the develop- They’re not bracing for a bust, but they can’t According to IllinoisPolicy.org, the rea- es, and income taxes—including both Gov. of only 10 of the largest metro areas in the U.S. to experience a decline in population Property taxes have also skyrocketed in and that has affected home affordability for many. Combined with the reduction in de- recent increase in state income taxes by the Conversely, some of those fighting the things a bit differently. Regarding the con- dominium and co-op market in downtown Chicago and surrounding neighborhoods, at Jameson Sotheby's International Realty, though a bit flat. It really depended on the year. Things must be priced right to sell. You buyer’s market.” Spreen also mentions other trends that change in tax laws.” Downtown seems to Florida Luxury condos in Miami have sold – mostly as a result of the strong U.S. dol- lar, according to Bisnow.com. In 2019 local industry pros expect to see the return of de- mand from Brazil, Mexico, and Colombia. Sunshine State. Denise Rubin, a real estate broker based “no one learned the lesson of 2006-2007,” ers overreached again, “so much so that The general expectation for 2019 is more of it’s mind boggling. There are cranes every- where. The current oversupply of units has fluctuations, and political uncertainty are been keeping prices down. The market is major factors going forward. Perhaps the like a roller coaster, and it’s at the bottom best advice to keep in mind is from Marks: right now. “Waterfront property sells,” she contin- ues, “whether it’s oceanfront or intercoastal. ing to spend – as well as what you’re willing Properties in over-55 communities have to accept. Sellers like to think about their dropped as well, by about 20 percent. It’s 'net' profits, rather than thinking about what definitely a buyer’s market.” While she ex- pects prices to start to correct next year in ket, it doesn’t work that way. 2020, she expects the remainder of 2019 to be more of the same. Overall, 2018 was a mixed-to-down year for condo and co-op markets nationwide. the same. Clearly, tax considerations, rate “Markets are not dictated by what you want as the seller, but rather what people are will- buyers are willing to pay.” In a buyer’s mar- n A J Sidransky is a staff writer/reporter with New England Condominium, and a published novelist.