On Urgency: The End of the First-Time Homebuyer Tax Credit and Your NYC Condo

To the extent that it's ever true in Manhattan real estate, the current market for NYC condos favors buyers. Prices are flat, apartment listings are plentiful, concessions on price are increasingly the rule, and an investment in Manhattan real estate remains about as good a long-term bet as there is out there. As a sort of cherry on top of all this, there's the soon-expiring federal tax credit for first-time home buyers.

First time homeowners in New York CityOf course, there's something that's always been kind of off about this particular metaphor. It's worth remembering that the sundae is actually the delicious part -- the cherry on top is just some weird thing that spent a lot of time in a jar. Which is to say that while the federal tax credit for first-time home buyers is inarguably a benefit to people looking to make their first home a NYC condo or Manhattan apartment, it's important to keep the size and importance of this particular incentive in perspective. In her column at Inman News, Teresa Boardman has some interesting things to say about this.

"I am getting calls from people who should not be buying real estate -- at least not in my humble opinion. The young man from out of state with the two-year internship in the Twin Cities, for example," Boardman (who is a real estate agent in Minnesota, as you probably guessed) writes. "In general, I am telling my clients that an $8,000 tax credit is not worth making a $150,000 to $350,000 mistake."

Of course, in Manhattan real estate, a $150,000 condo barely exists, and certainly wouldn't qualify as a mistake. And yet a lot of this holds true. And one bit of speculation Boardman offers at the end of her column is especially compelling. "I suspect that within a month or two prices will start to fall again," she writes. "The savvy homebuyer may come out ahead by waiting until the tax credit ends and then going out and house-hunting and taking advantage of the prices that are likely to fall." Good news for NYC condo buyers? Sure, maybe. Could a possible dip in Manhattan apartment listing prices prove to be better news than a comparatively paltry tax credit? Seems like it, doesn't it?

NYC Daily Real Estate Blog

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