Queens Real Estate Market Update: DECEMBER 2015

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by George Herrera, Realtor & Co-Owner of the Queens Home Team at Keller Williams Realty.

December 2015 Queens Real Estate Market Update

Home sales slowed again in November as inventory remained tight and prices continued their steady increase. As the end of the year approaches, consensus among economists was that the Federal Reserve would likely increase interest rates in December, and that indeed has happened which solidifies a trend of rising mortgage rates much more likely in the coming year. Rising interest rates affect buyer purchasing power and that in turn will likely affect home prices. StreetEasy.com recently released their 2016 market predictions which includes a prediction that Queens home price growth will slow down next year. We agree with this prediction and believe that the affect will be result of the rising interest rates which now have become much more of a reality & expectation with the fed rate increase this month.

Absorption Rate: 741.83 sales/per mo. (4,451 Sales in last 6 months/6 months)

Current Available Inventory: 3,971

Month’s Supply: 5.4 Months (3,971/741.83)

Last Month: 5.9 Months

Last year: 6.3 Months

*Month’s supply over 6 months is said to favor buyers, month’s supply below 6 months is said to favor sellers, and month’s supply of 5-6 months is said to be a balanced market.

Queens_Real_Estate_Market_Update_DECEMBER_2015_Courtesy_of_George_and_Abigail_Herrera_Keller_WilliamsClick Here for a Free Appraisal of your Home

Interest Rates

Interest_Rates
Interest rates began trending up in November amid speculation of a rate increase by the Federal Reserve in December. Currently, Freddie Mac reports the following figures: 30-year fixed rate, 3.97%; 15-year fixed rate, 3.18%; 5/1-year adjustable rate, 2.98%.

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Queens Home Sales

Queens_Real_Estate_Market_Home_Coop_Condo_Sales_DEC_2015Homes sold at a seasonally adjusted annual rate of 656 homes in November, a decrease of 15.2% from October and an decrease of 2.7% from the same month last year. Tight inventory is likely weighing down sales as they have been all year and could be a persistent headwind through the colder months of the year. However, the recent fed rate increase will likely create urgency among buyers that are either on the fence, or barely qualified, so this should lead to an increase in sales in the next quarter. Specifically, residential 1-4 family home sales were down 4.8%, Condo sales were down 31.4%, and Coop sales were up 9.7% compared to November of last year. Over the last 12 months, sales are down .3%.

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Queens Home Prices

Queens_Real_Estate_Market_Home_Coop_Condo_Prices_DEC_2015Home prices continued their steady increase in November as the median home price rose to $430,000 according to the Long Island Board of Realtors. This was an increase of 1.3% from October and a year-over-year increase of 1.2%. As we move into the winter months, we should begin to see some seasonal alleviation on prices, especially considering the fed rate increase which can ultimately have an impact on buying power for prospective buyers. Year-over-year gains will likely continue throughout next year, however, as predicted by StreetEasy, the gains will most likely slow to a more standard appreciation rate. Specifically, residential 1-4 family home prices rose 4.3%, Condo prices rose 7.3%, and Coop prices rose 5.9% compared to November of last year.

*Economists tend to say that a healthy appreciation rate for home prices is one that follows along with general rate of inflation, about 4-5%.

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Queens Housing Inventory

The actual number of homes for sale at the moment (3,971) is down 7.4% compared to last month (4,291), and down 11.1% compared to the same month of the previous year (4,469). This led to the months supply of inventory, which measures the relationship between supply and demand, to dip slightly to 5.4 months due to the drop in sales. For most of the year we have seen a large year over year decrease in number of homes for sale, however, in the last three months, we have seen a smaller decrease which seems to signify that the market is shifting slightly. Let’s see what happens in the first quarter of 2016.

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Blog Courtesy of George & Abigail Herrera w/the Queens Home Team at Keller Williams Realty Landmark II.

George and Abigail Herrera_Queens Home Team at Keller Williams Realty 2_HEADSHOT_ROUNDBUY: www.exclusivequeenshomes.com | SELL: www.queenshomeselling.com

Original Article: http://blog.queenshomeselling.com/blog/queens-real-estate-market-update-december-2015/

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1031 Exchange NYC: What is it and How does it Work?

1031basics-300x171by George Herrera, Realtor & Co-Owner of the Queens Home Team at Keller Williams Realty.

If you’re a Queens real estate investor, or if you’ve bought & sold properties here in the past, then you’re probably already familiar with the concept of a 1031 exchange. If you’re just starting out on Queens real estate investments or thinking of investing in the future, then you’re probably eager to learn about the 1031 tax-deferral option. So, we’ve prepared a primer on this important tool for your investment-planning purposes. This is a basic overview of what it is and how it works. For more details you can reach out to us, or contact your tax accountant.

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Definition:

A 1031 exchange, also known as a like-kind exchange or a Starker, allows you to roll over your capital from the property you have sold to the property you have recently purchased. The idea is that you would be able to avoid taxes until you sold your properties for cash at some later date, and ideally save some money by paying only one long-term capital gains tax. Even if your goals are not long-term but you are looking to save some money now, there is no limit to how often you can use a 1031 exchange, and paying little to no taxes with this type of transaction may seem mighty attractive.

Guidelines:

There are two basic guidelines that apply to most cases.

  1. The value of your replacement property must be equal to or greater than the value of the property you have sold.
  2. All of the net proceeds from your sold property must be used to buy your new “like-kind” property.

Timelines:

Along with these requirements, there are two timelines to keep in mind while processing a 1031 exchange.

  1. You have exactly 45 days from the day you sell your property to find potential replacement properties.
  2. The exchange of properties must be completed within 180 days of selling your former property.

There are no extensions available, and if the required transactions are not completed within the number of days given, you will have to pay taxes on your sold property.

Click Here for a List of Exclusive Homes for Sale in Queens NY

Fotolia_50922167_XS-232x300Summary:

We do a lot of transactions with Sellers who take advantage of the 1031 Exchange whether they are buying another investment property, or retiring to another state and exploring ways to minimize their tax burden. Some of our clients take the proceeds and buy another investment property to defer the taxes and continue holding, that is the simple and more straight forward strategy. However, we’ve also had clients that get more creative, for example, we’ve had Sellers take the proceeds of their investment property in Queens to buy an investment property in the same state where they are retiring. Then they eventually end of moving into the investment property, live their for at least two years, and ultimately sell it as owner occupied which allows them to take advantage of the $250K per person tax exemption. This strategy has more moving parts, but at the end of the day, they were able to defer their tax burden completely.

This is a basic overview of 1031 Exchange. There are various processes, including delayed exchanges, depreciation recapture, and other deeper aspects of a 1031 exchange that could come into play, depending on each investor’s unique situation. Given the strict requirements and tight deadlines, most investors work with a tax advisor and an experienced Queens real estate agent when they are pursuing a 1031 exchange. We have helped a lot of sellers and buyers with 1031 exchanges in Queens so if you have any questions, you can always reach out to us.

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Blog courtesy of George & Abigail Herrera w/the Queens Home Team at Keller Williams Realty Landmark II.

George and Abigail Herrera_Queens Home Team at Keller Williams Realty 2_HEADSHOT_ROUNDBUY: www.exclusivequeenshomes.com | SELL: www.queenshomeselling.com

Original Article: http://blog.queenshomeselling.com/selling-a-home-coop-condo-in-queens-ny/basics-of-a-1031-exchange-what-is-it-and-how-does-it-work/

How much is your Queens Home Worth?

George Herrera Keller Williams_HEADSHOT_ROUNDby George Herrera, Realtor and Co-Owner of the Queens Home Team at Keller Williams Realty.

Every house has value, regardless of it’s condition. The question is, how much value? There are several factors that affect the value of 1-4 Family Homes here in Queens, and it’s important to note that Appraised Value is different than Market Value. Appraised Value is the value of your home as assessed by a licensed real estate professional or appraiser. This value is based on comparable sales within the last 3-6 months. Market Value on the other hand, is more emotional, and defined simply as “what a buyer is willing to pay for your home”. So, what is the appraised value and market value of your home? Below is a list of factors that are used to determine both values in Queens, NY.

LOCATION

location-11399655Location, location, location.The golden rule of real estate rings true here in Queens. Every neighborhood is different, and even the same neighborhood can have sub-divisions within that neighborhood. For this reason, it is best to compare your home, to similar homes within a quarter mile radius of you. Being that Queens is so densely populated, we find that a quarter mile gives you the best comps. Once you go outside a quarter mile, you tend to spill into different neighborhoods and sub-divisions.

BUILDING SIZE & GROSS LIVING AREA (GLA)
Let’s face it, it’s very hard to make your property bigger. Most buildings in Queens were built a long time ago, and most homeowners keep the existing structure. Now of course you can add extensions and(or) build up, but the truth is that most homeowners don’t go to those extents just to make their homes bigger. Therefore, it’s important to compare your home, to other similar size properties (i.e. similar building size & GLA). In a county as densely populated as Queens, space is a premium, so 200-400 sq ft in added living space can add substantial value.

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LOT SIZE & ZONING

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Queens is one of the most popular counties in New York City so it’s no surprise that developers are scrambling to find big lots with the right zoning in order to build something that will provide them with a great return on investment. As a result, your lot size and zoning can add value depending on the area, FAR, buildable square footage, etc. It’s important to understand what your zoning is and what your FAR is because depending on what it is, your property value may be increased substantially.

UPGRADES & RENOVATIONS
Condition plays a major factor in the value of a residential home. This is common knowledge, however, many homes are not fully renovated so it’s important to understand how appraisers & real estate professionals make adjustments for different upgrades, renovations, etc. Some improvements add value, some don’t. Some aspects of the home that are in bad condition can hurt the value of your home, and some others don’t. Therefore, it is important to compare your home to other similar size homes, in the immediate area, and in similar condition. These will be your best comps.

Thinking of Buying a Home in Queens? Click here for a list of all public and private homes for sale in Queens NY.

Blog Courtesy of George & Abigail Herrera w/the Queens Home Team at Keller Williams Realty Landmark.

George and Abigail Herrera_Queens Home Team at Keller Williams Realty 2_HEADSHOT_ROUNDBUY: www.exclusivequeenshomes.com | SELL: www.queenshomeselling.com