Residential market showed strength in 1993.After several years of band news in residential real estate, we saw considerable strength in almost all segments of the market in 1993. In the new year, there are a number of factors which indicate that the market will continue to improve and should approach the selling pace of the mid-1980s. At the present time, there is actually a shortage of the best apartments in the mid- to high-end of the market - five rooms and over. The glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of apartments for sale two or three years ago has been virtually absorbed. That, in and of itself, is dramatic good news. As an indication of the pace of the market last year, Fox Residential Group has been involved in numerous auction-bidding situations where multiple purchasers were competitively bidding for the same property. In some instances, this has forced the sale price above the asking price. What's fueling this come-back in the residential market? A number of factors. First, interest rates were at their lower point in years in 1993, making the real cost of home-buying far lower. Even though rates are up slightly right now, they are still extremely low by historic standards. The surging stock market has meant that although overall the economy was lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. , many Manhattan apartment and townhouse town·house or town house n. 1. A residence in a city. 2. A row house, especially a fashionable one. buyers had capital available to spend on new homes. Finally, with home prices having fallen dramatically in 1990 and 1991, prices are still good and buyers are still feeling comfortable making the investment. These forces are all going to play a role in the market in the coming year. And there are some additional factors as well. The full impact of the tax increase passed by Congress last year is going to hit home and it is likely to benefit the real estate market. The interest payments in home mortgages are tax deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). and, with tax rates climbing on high income individuals and families, the mortgage interest deduction Mortgage interest deduction A federal tax deduction for interest paid on a mortgage used to acquire, construct, or improve a residence. will become more valuable and the after-tax cost of owning a home will decrease for many people. Also, the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State Legislature A state legislature may refer to a legislative branch or body of a political subdivision in a federal system. The following legislatures exist in the following political subdivisions: tr.v. de·reg·u·lat·ed, de·reg·u·lat·ing, de·reg·u·lates To free from regulation, especially to remove government regulations from: deregulate the airline industry. the rent on luxury apartments occupied by high-income renters. Many New Yorkers who were paying artificially low rents are now going to find that, with their rental apartments no longer a bargain, it makes more sense for them to buy. This adds more potential buyers to the marketplace kand increases demand further. Add those two new factors to a markate in which interest rates are low, prices are still relatively low, and there is a shortage of good apartments, and it is bound to translate into a hote market in 1994 - particularly as potential buyers begin to realize that they may need to act quickly if they are to take advantage of the opportunities before prices move up. In fact, there's a good chance that these trends will begin to touch every segment of the market. And if demand continues to outstrip out·strip tr.v. out·stripped, out·strip·ping, out·strips 1. To leave behind; outrun. 2. To exceed or surpass: "Material development outstripped human development" supply on the high end, eventually that is going to force prices up. In short, there is every indication that the coming year will be one of the best since the hot market of the 1980s ended. |
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