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May 2019   Volume 45, Number 5      
 

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High-Priced Condos Sell at a Loss More Often than Non-Luxury Units

High prices do not guarantee profits when it comes to luxury real estate, according to a new study by StreetEasy. Researchers analyzed New York Department of Finance records from 2014 to 2018 and found that 7.7 percent of the 16,000 homes sold in New York City during this period sold at a loss.

Isolating the statistics for luxury condos in Midtown Manhattan uncovered even higher losses. Of the 66 luxury condos bought and resold in that neighborhood during that time, 39 percent sold at a loss. While the study found that luxury properties selling at a loss was common among new luxury construction units in Midtown, the outcomes were the same for luxury property sales across the rest of the city, as well.

“In New York, real estate behaves like a luxury good,” Grant Long, senior economist at StreetEasy, told the New York Post. “It’s like fancy cars and expensive handbags. It’s purchased to make a statement. But it’s also highly cyclical and subject to whims.”

Buyers in New York purchase luxury real estate only to sell at a loss for many different reasons. Some buyers are trying to avoid taxes while others sell to mitigate shared assets during a divorce. Some international buyers are also using the properties to get money out of their home countries or to hide money from their home governments.

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In this issue:

Bombshell Lawsuit Alleges Top Real Estate Companies Violated Sherman Antitrust Act

Breakups Force Millennials to Return Home, Says Homes.com Study

High-Priced Condos Sell at a Loss More Often than Non-Luxury Units

Redfin Study finds Homes with Pools Sell for More Money

Home Sellers Not Comfortable with Real Estate Agents, Study Says

LendingTree Study Examines How Housing Prices Have Recovered Since 2009

Rising Housing Costs Causing Some Married Couples to Take on Roommates

New Study Analyzes Salary Needed to Afford Housing in Top U.S. Metros

Rising Seas Eliminate $15.8 Billion in East Coast Home Values

How to Negotiate Like the Pros: 3 Expert Tips to Help You Close Real Estate Deals

 


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