Inflation and Home Prices

By Robin Shapiro

It’s not unusual for some Rockaway houses to sell for upwards of $1 million and even above $2 million. I recently sold an expensive one that the owner bought for $800k. He realized a large long term capital gain. There are ways to minimize the taxes. A good friend bought her house for $200k and wants to sell it now because it is worth over a million dollars.  The capital gain is large, and she doesn’t want to pay tax on it.  She hopes her accountant can figure out a palatable way to handle the tax ramifications. She’s contemplating the purchase of a newer bigger house which is one way to reduce or eliminate the tax bite. How did these houses appreciate? Remember when subways were 15 cents/ride (1953-1966), or 35 cents (1972-1975), or $1.50 (1995-2003)?  Remember when the Daily News was 3 cents per day (in the 1950s)?

Real estate reacts to inflation and can be a good way to participate in it. The Federal Reserve just lowered short term rates. Mortgage rates came down too. REGARDLESS OF Fed policy, which can change, the big picture is that prices tend to go up over time. For patient people, the longer they wait the more likely they will reach the DREAM valuation for their property.  Call me.  Love, Robin.