Manhattan Beach, California – January 5, 2020 – Strand Hill in the news, Robb Report covers hot story on how real estate will radically change in the new decade. Reputable contribution by Realtor Ed Kaminsky. Story written by Lucy Alexander.
In Los Angeles and San Francisco, where housing development is more restricted, prices have been holding up because of a “shortage of homes and the strong local economy,” says Ed Kaminsky, a realtor at Strand Hill in Southern California. But even caution is setting in, he says: “Global and political uncertainty causes buyers pause. In Palo Alto and Silicon Valley, in 2016, any seller could put any price on any house and there would be five or six buyers. Now buyers come in low and don’t budge.”
New regulations are also likely to weigh down recovery. In 2017, President Trump capped the amount of state and local taxes that homeowners can deduct from their federal tax returns. New Yorkers have also been hit by a rise in transfer taxes and a new mansion tax that starts at one percent on transactions over $1 million. And Democratic state legislators are pushing for even more with a law that would allow New York City to impose a so-called pied-à-terre tax, an annual levy on nonprimary homes that are worth more than $5 million.
Rising property taxes aren’t confined to the US. Overseas, foreign buyers must now cough up 10 percent or more in Sydney, 20 percent in Singapore and an eye-watering 30 percent in Hong Kong. In 2014, a climb in UK transfer taxes put a halt to an extraordinary run in which luxury London homes surged in value by 66 percent in five years. Prices have been plummeting ever since, compounded in 2016 by the shock Brexit vote.