Wealthy Homeowners Brace for 'Mansion Cliff'
Call it “The Mansion Cliff.” Real-estate experts
say that as more of the wealthy sell out of fear of a tax increase,
they could drive up inventory and lower prices in the top of the real
estate market, which has been one of the few bright spots in the
economy. Any softening at the high end, or a spike in inventory, could
ripple through the housing market and add new pressure to prices,
although it could also increase sales volume.
“This has become a key issue for sellers,” said Stephen Games of Pacific Sotheby’s Realty in San Diego. “Sellers want to get a deal done before the election. They want to avoid the uncertainty.”
Games said that one of his clients recently sold a $13 million ocean-view property in La Jolla, Calif. for less than the original asking price – in large part to avoid the possible increase in taxes next year. The tax savings from the deal was more than $600,000 compared to the potentially higher bill next year.
Jorge Uribe, one of the top luxury brokers in Miami, recently sold a mansion in the posh enclave of Indian Creek for $38 million. He said the owner accepted a price below his original goal for fear of the tax cliff.
“It was certainly a factor in his decision,” Uribe said. “When you’re talking about $38 million, that’s a big difference in tax savings. The tax issue was definitely a motivator in his decision to take a little less than he wanted.”
One New York broker said she got two new listings in the past week that were driven in part by tax fears.
“This has become a key issue for sellers,” said Stephen Games of Pacific Sotheby’s Realty in San Diego. “Sellers want to get a deal done before the election. They want to avoid the uncertainty.”
Games said that one of his clients recently sold a $13 million ocean-view property in La Jolla, Calif. for less than the original asking price – in large part to avoid the possible increase in taxes next year. The tax savings from the deal was more than $600,000 compared to the potentially higher bill next year.
Jorge Uribe, one of the top luxury brokers in Miami, recently sold a mansion in the posh enclave of Indian Creek for $38 million. He said the owner accepted a price below his original goal for fear of the tax cliff.
“It was certainly a factor in his decision,” Uribe said. “When you’re talking about $38 million, that’s a big difference in tax savings. The tax issue was definitely a motivator in his decision to take a little less than he wanted.”
One New York broker said she got two new listings in the past week that were driven in part by tax fears.
Falling Off the 'Mansion Cliff'
CNBC Wealth Editor Robert Frank reports on what's at stake for the luxury home market.
No comments:
Post a Comment