Latest news with #realestateindustry
Fast Company
19 hours ago
- Business
- Fast Company
Mamdani wants a rent freeze. What would that do to the NYC housing market?
Zohran Mamdani's victory in the New York City Democratic mayoral primary is sending shockwaves through the real estate market. But even though the 33-year-old won at the polls, some influential New Yorkers aren't sold on his democratic socialist policies—including a promise to freeze rents. The mayoral candidate campaigned on a promise to immediately freeze the rent for all 2 million-plus New Yorkers living in rent-stabilized apartments, and to triple the city's stock of affordable housing by constructing 200,000 new units over the next 10 years. That plan is certainly ruffling some feathers. Mamdani's mayoral primary victory in June was followed by a one-day sell-off in shares of companies with significant exposure to the New York real estate market, as well as threats of a mass exodus by some of the city's wealthiest denizens. Such policies might sound attractive (and clearly appealed to voters), but there are those in the real estate industry who are skeptical. In particular, some experts caution that while Mamdani is well-intentioned, he may be naive about the realities of New York's housing situation. And even if a rent freeze could be enacted rather quickly, it takes many years to get an adequate supply of new housing on the market. 'The concern among the real estate community is that while a rent freeze might provide short-term relief for tenants, it also risks raising market rents and causing long-term damage to building maintenance, rental supply, and investment interest,' John Walkup, cofounder of New York-based UrbanDigs, tells Fast Company, noting that a rent freeze could accelerate the bifurcation between rental rates for regulated versus market-rate housing. According to Walkup, if landlords with mixed portfolios of housing units aggressively increase the rents for market-rate apartments to offset the losses for regulated units, the people who ultimately stand to pay the price of well-intentioned policies are other renters. And there are other potential consequences: Landlords could defer maintenance or upgrades, while there might be a rise in 'warehoused' units that landlords intentionally keep off the market. (Mamdani's campaign did not respond to several requests to offer comment on the arguments described in this story.) Maintenance woes Landlords of smaller properties are going to face the most challenges, argues Peter Bafitis, managing principal at RKTB Architects in New York. Many buildings with subsidized and rent-stabilized housing are older, and older buildings typically require more maintenance. Meanwhile, Bafitis says, the cost of materials and labor have skyrocketed in recent years. 'These owners are struggling to keep up with regular building maintenance and needed repairs,' he says. 'What's been happening is that these smaller landlords have not been renovating apartments and they're letting them be vacant because the finances don't make sense.' These landlords rely on moderate rent increases to maintain their buildings, Bafitis says, noting that if that's taken off the table—and there's no commensurate relief for landlords, say in the form of reduced taxes or utilities costs—they will face a 'legitimate burden' that will ultimately affect renters. Supply issues Like Walkup, Bafitis says any holistic solution to New York's housing problem must address supply: 'If you only deal with one side of the equation, it's not going to work.' The construction of regulated housing depends on private investment, but a rent freeze could deter outside investments in buildings that are often valued based on potential rent increases, Walkup says, noting that if there's no carrot for investors—be it in the form of rent increases, subsidies, or tax incentives—they could find it less appealing to invest in regulated buildings and more attractive to invest in market-rate buildings instead. Because of the public-private partnership that's required to build this type of housing, if elected, Mamdani would have to find a way to partner with the private sector. 'There has to be something in it for them, that's the only way for it to work,' Bafitis says. And even with partners on board, there are logistical hurdles to overcome. Building a large supply of new houses quickly? 'Fuggedaboudit,' Bafitis says. 'Not in New York City.' That's a reality he deals with on a daily basis as an architect. Whereas it once took one to three years to bring a small-scale project to completion, the timeline has now stretched to more like five to seven years. 'It's just because of the red tape,' he says. 'It's mind-boggling.' Finding middle ground While both Walkup and Bafitis commend Mamdani for focusing his campaign on issues of housing affordability, they say a holistic solution is necessary to truly address this problem. And, to be fair, there are a lot of 'ifs' to be sorted out between now, the general election in November, and Mamdani potentially taking office. Like many politicians before him, Mamdani, if elected mayor, may walk back some of the promises he made as a candidate. While a rent freeze is a 'great slogan,' Mamdani would have to be a consensus-builder as mayor and find ways to work with the various well-entrenched forces in the industry, Bafitis says, adding, 'Housing is an incredibly complicated business in New York.' Finally, all the bluster this month about Mamdani's potential impact on the housing market might be a bit much, particularly with more than three months until the general election—and plenty of time for him to refine his agenda.
Yahoo
5 days ago
- Business
- Yahoo
Eliminating capital gains on home sales would be a boon for older homeowners in high-cost states
President Trump recently said his administration was 'thinking about' removing capital gains taxes on home sales to help jump-start the sluggish housing market. The biggest beneficiaries of such a change will likely be longtime homeowners in the country's more expensive housing markets. Removing or increasing the capital gains limit — currently $250,000 for single homeowners or $500,000 for married couples — on home sales has been a longtime priority for the real estate industry, which argues that steep tax bills are keeping some homeowners who wish to relocate or downsize stuck in homes that no longer fit their needs. Read more: Capital gains in real estate: How much you'll pay when you sell your home Take the case of a homeowner in San Francisco, where home prices have more than tripled between 2000 and 2025 to a median price of about $1 million today. A homeowner who purchased in 2000 for $300,000 might have $700,000 of gains if they sell now. Depending on their tax filing status, between $200,000 and $450,000 of those gains could be taxable at rates between 15% and 20%. Under any scenario, their tax bill would be in the tens of thousands of dollars. Those owners are getting more attention in today's market because for-sale inventory is constrained in many parts of the country, pushing home prices to record highs. It's unclear exactly how much helping wealthier homeowners would enliven a sedate market. While it could unlock more inventory, some experts say it could worsen the affordability problem. Any changes to the capital gains limit would require congressional approval. Trump's comments came earlier this week in response to a question from Brian Glenn, a reporter for the conservative network Real America's Voice and boyfriend of Rep. Marjorie Taylor Greene. The Georgia Republican recently introduced 'The No Tax on Home Sales Act' to eliminate the taxes. Sign up for the Mind Your Money weekly newsletter By subscribing, you are agreeing to Yahoo's 條款 and 私隱政策 Around 10% of homeowners nationally have enough equity to surpass the $500,000 limit for couples, according to the National Association of Realtors, which has advocated for reconsidering the caps. In states where home prices have risen rapidly and homes are more expensive, the share can be far higher. Alex Caswell, founder of Wealth Script Advisors in San Francisco, works primarily with clients in California and New York, many of whom have to consider capital gains taxes in their housing decisions. 'This will primarily affect people in affluent towns and those who have owned their homes for a long time,' Caswell said. 'We have experienced a significant price increase since the lows of 2008, so anyone who bought after that period stands to benefit significantly.' He thinks buying and selling activity could tick up in those states if the bill were to pass, but he worries the dynamics could also mean more older homeowners with lots of purchasing power would be competing with first-time homebuyers for smaller, cheaper homes. Read more: How to buy a house in today's market Though just a small percentage of home sales exceed the limit, the number has been growing in recent years thanks to unprecedented home price appreciation during the pandemic. In 2023, 7.9% of home sales triggered capital gains above $500,000, up from around 3% between 2017 and 2019, according to real estate data provider Cotality. In California, nearly 30% of home sales exceeded the $500,000 gains threshold in recent years, along with 24% in Hawaii and 22% in Washington, D.C. 'The current exclusion on $500,000 for a couple is totally inadequate, and that is a real problem,' said John Power, a financial planner at Power Plans in Walpole, Mass. In Massachusetts, 18% of home sales exceeded that cap in 2023. 'You don't have to be rich to have a $1 million home these days in much of the Northeast or Pacific Coast,' he said. Still, in 18 states tracked by Cotality, less than 5% of home sellers run up against the higher capital gains exceptions. No matter where they're located, homeowners who have been in their homes for decades and have had the longest time to build equity are most likely to be affected. The Budget Lab at Yale calculated that in 2022, the average homeowner above the exemption was nearly 65 years old, with a net worth of $5.7 million and a home valued at $1.4 million. While Trump and Taylor Greene have floated eliminating the tax altogether, other advocates have argued for raising the limits. The current caps have been in place since 1997, meaning they haven't kept up with inflation. If they were tied to inflation, they would be just over double current levels, at $506,000 for single filers or $1.13 million for married filers, according to an analysis from Laura Lynch, owner of the Tiny House Adviser in Abiquiu, N.M., previously worked in Florida, where she commonly ran into cases where clients were close to or over the exclusion limits. She said it could be particularly problematic in divorce cases, where one party might receive a home in the settlement and then be subject to the lower $250,000 cap for single filers. Today, she specializes in clients interested in downsizing and tiny home living. She counsels clients facing a big tax bill from a sale that it may be best to pay it and move on if moving to a smaller, cheaper home means they can avoid taking out high-interest home equity loans or lines of credit in the future. 'I advise people to be aware that the only fee-[free] and interest-free way to use home equity is to downsize,' Lynch said. 'Those living on small incomes in retirement are often in a low capital gains bracket, and even max capital gains is far less than ordinary income.' Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance. Sign up for the Mind Your Money newsletter
Yahoo
30-06-2025
- Business
- Yahoo
The 'Zillow Ban' is here. Buckle up for big changes in real estate.
Pretty much every potential homebuyer looks for houses on the internet, scouring listings for the right facade and envisioning their couch in glossy photos of empty living rooms. A lot of the time, that digital touring pays off: The National Association of Realtors recently found that about half of purchasers end up finding the winning property online. For many house hunters, the never-ending cyberquest for that dream home includes a stop (or many) at Zillow. If you count yourself among the 221 million monthly visitors who scan Zillow or one of its affiliated portals, like Trulia, you probably won't notice any change in your home-scrolling habit on June 30. But it's an important date for the biggest name in home search. Behind the scenes, Zillow is using its vast machinery to fight a battle that could determine where you find your next house — and whether it even appears on Zillow at all. Starting Monday, Zillow will be banning home listings that have been marketed publicly by a real estate agent — which includes everything from planting a for-sale sign in the front yard to posting on Facebook — without being shared in the local databases that feed home listings to the rest of the real estate industry, including Zillow and other search websites, within one business day. The move is part of a broader fight over "exclusive inventory" or "hidden homes" — basically, properties advertised in some places but not others. In an attempt to seize more control over their listings, agents at some real estate brokerages have been advertising homes in internal databases or posting them only on their own websites, out of reach of the search portals. While the fight has been going on for a few years, things have recently turned especially ugly. Compass, the largest real estate brokerage in the US by sales volume, sued Zillow in federal court last week over the new blacklist, and industry execs have spent months trading barbs via social media, speeches, and email blasts that reached thousands of agents across the country. The back-and-forth leaves homebuyers and sellers in a weird spot. I've spent months talking to people around the industry about the hidden listings issue, and I'm left with one big conclusion: If you decide to hire an agent (which most people do), you should go into that relationship with open eyes. The rules of the game are changing. Consumers need to make sure they know exactly what they're getting from their agents and how much they'll be paying for those services. Buyers' agents should also be able to explain how they'll navigate a shifting landscape in which some listings may become harder to find. Big companies are squabbling because they need your clicks, your home listings, and, ultimately, the commission checks that flow from your deal. Whether you're a buyer or seller, your business is especially valuable right now. It can be daunting, but the upheaval may be advantageous if you play your next home transaction correctly. Every real estate company has a huge financial stake in this war over listings. Zillow's new policy is an attempt to stem the rising tide of "exclusive inventory," or homes marketed outside the multiple listing services, the formal name for the more than 500 local databases that distribute listings among fellow agents, big brokerages, and the popular search portals. Instead of being entered into the MLS, these "hidden" houses are shared among agents who belong to the same brokerage, swapped in clubby groups known as private listing networks, or posted exclusively on one brokerage's website without being distributed more widely. The leader of the push toward this walled-garden approach is Compass, which maintains its own trove of thousands of homes that you can only see by working with one of their agents. But it's far from the only company doing this — other major players, such as Howard Hanna, are increasingly leaning on hidden listings. Still others have threatened that they could do the same if the market fractures further. Zillow really doesn't like this shift. The company depends on selling leads tied to the mountain of listings in its portal: When you signal your interest in a property on its website, Zillow will typically pass along your contact info to an agent who pays a fee to the site — not the agent who actually listed the house for sale. If the spigot of home listings gets cut off, search portals like Zillow are in trouble. Beyond self-interest, the company says it's also fighting for something far more noble: a fair and transparent housing market, in which listings are readily available for everyone to see. Buyers just want to see all the houses out there, Zillow execs say, and sellers can draw out the best offers when their homes get maximum exposure. Plenty of agents around the industry resent Zillow for the power it wields, but even some who have beef with the search giant have told me they agree with its basic point: A wide-open market is best for consumers. Kirk Simmon, a 20-year veteran agent in the suburbs of Philadelphia, touts what he calls a "public inclusive" approach — a play on Compass's "Private Exclusive" listings, which are distributed internally among Compass agents and their clients. For the vast majority of people — except, maybe, A-list celebrities or those who desire true privacy — Simmon advises sharing a home listing as widely as possible. "Why would you ever sell your house without the public knowing and everybody being included?" Simmon tells me. Dick Selzer, the owner and general manager of a Re/Max-affiliated brokerage in northern California, agrees. "Candidly, I hate to come to the aid of Zillow because I don't particularly like them," Selzer tells me. But, he says, "My job is not to be happy with Zillow. My job is to do the best I can for my client." I've gotten a similar message from Compass agents on the opposite side of the aisle, who say they'll stick with their marketing strategy despite Zillow's new rule. "I'm not going to let them bully me into doing things that are detrimental to my clients," Jennifer Knoll, a Compass agent in the Washington, DC, area, told me recently, emphasizing that she always has clear discussions with her clients about their marketing plans. Compass says the search portal's new policy is just an attempt to protect its market dominance. Robert Reffkin, Compass's CEO, argues that sellers benefit from testing their home listings with a limited audience before blasting them out more widely. The Compass website, unlike Zillow, or any of the other big search websites, doesn't track price cuts or show how long a house has been sitting on the market, information that Reffkin says harms sellers. Compass can also monetize leads through its own website rather than handing those opportunities to a portal like Zillow. The main thing consumers need to know is that they can — and should — be part of this conversation. Sellers should know exactly how their agent plans to market their home, and why they're doing what they're doing. Some of this comes down to just reading the forms. One of Compass's disclosure forms, for instance, warns sellers that listing homes off the MLS may "reduce" the number of potential buyers who learn about the property, the number of offers, and ultimately, the sale price (94% of Compass's listings last year eventually sold via the MLS, the company says, even though many were initially marketed in Compass's internal database). The form also warns sellers of the chance that their house won't show up on Zillow if the listing's advertisements run afoul of the search giant's new policy. A Compass spokesperson said in an email that while the company's research shows that consumers benefit from pre-marketing, the disclosure form reflects the fact that the company cannot guarantee results. One thing is clear: Sellers should know the trade-offs baked into any marketing plan for their home. For buyers, a whole other set of rules from a massive legal settlement against the real estate industry last year dictate that before you so much as step into a house with an agent as your guide, you have to sign an agreement that outlines the terms of the agent's services and how much they expect to be paid. Buyers can no longer coast on the assumption that their agents' services are free, and they should make sure they're getting their money's worth. And though many homes are available in the major search portals these days, buyers have always relied upon agents to dig up the houses that can't be found online. That's not changing anytime soon, especially in markets that are still starved for available inventory. One Zillow economist recently told Business Insider that, after a tumultuous home search this spring, he eventually purchased a home that had not been officially listed for sale — his agent had heard of a homeowner who could be prompted to sell for the right offer. Again, you probably won't notice anything different on Zillow or any of the other popular search portals in the coming weeks. Zillow has spent the past month warning agents whose home advertisements violate its new rules, and while the company won't say exactly how many listings it's flagged so far, Errol Samuelson, Zillow's chief industry development officer, said in an email statement that the company expects "only a small number of for-sale listings will be affected." Everyone involved in this fight is scrambling to protect their slice of the pie. Savvy consumers should have no illusions about where they stand in this ecosystem. This may be happening out of sight, but buyers and sellers alike lose if they keep it out of mind. James Rodriguez is a senior reporter on Business Insider's Discourse team. 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News.com.au
28-06-2025
- Business
- News.com.au
‘Buyer beware': Huge change to how homes are sold in Qld
Queensland's real estate industry is bracing for new laws which will make it the nation's most regulated major market – but buyers' advocates say the reforms still fall short. The landmark seller disclosure scheme effective from August 1 will 'fundamentally alter' how homes are sold, according to industry experts. Sellers will have to share a wide range of details about their property before contracts are exchanged, including zoning, rates and water charges, tree orders or heritage listing, government orders requiring work or money, and any building work carried out by an owner-builder in the last six years. But the pendulum still swings to 'buyer beware', with controversial omissions including the structural soundness of the building or pest infestation, the presence of asbestos, and any history of flood or other natural hazards. Real Estate Institute of Queensland CEO Antonia Mercorella said the changes to the Property Law Act was one of the most significant since it was introduced in 1974. 'While this is a meaningful change that enhances consumer protection, it's important for buyers to understand that the seller's disclosure regime may not prescribe or encompass everything they may wish to know about a property, and accordingly they should still conduct their own due diligence,' Ms Mercorella said. 'The 'buyer beware' principle continues to apply in Australia.' Ms Mercorella said the peak body had been pushing for a clearer disclosure process for more than a decade, which had been 'largely delivered' by the legislation. Challenges included ensuring sellers had easy and low-cost access to the information they had to reveal to buyers. Brisbane buyers agent Melinda Jennison said the updated minimum disclosure requirements lacked in areas 'buyers are commonly exposed to risk'. 'It would have been great if sellers were required to disclose any uncertified or unapproved building work that had taken place at the property,' Ms Jennison said. 'Sellers should also be obligated to disclose any previous building or pest defects that have been identified in the past, even if those issues have since been addressed. 'The availability of past inspection outcomes would provide an important layer of transparency for buyers.' Ms Jennison said this information would allow buyers to make better informed decisions, rather than having to undertake costly investigations of their own after contracts were exchanged. Property lawyer Bryce Melville, of Redemont, said Queensland's new seller law was tougher than its counterparts in NSW and Victoria, noting seven specific disclosures that were not required by either of the two other states. 'Sellers and agents need to prepare now,' Mr Melville said. 'For the first time, sellers must provide a full set of disclosure documents, including title searches, planning certificates and environmental notices, before a contract is signed, or risk the contract becoming void. 'The changes bring Queensland in line with Victoria and NSW, but go even further, setting a new national benchmark for buyer protection.' Chris Burling, of Business Depot Legal, said the reform aimed to boost transparency and avoid disputes by giving buyers crucial information upfront. But it was 'not a free pass', Mr Burling said. 'Unlike other states such as NSW and Victoria, Queensland has historically operated under a 'buyer beware' model, placing the onus on the buyer to uncover crucial property details through independent due diligence,' Mr Burling said. 'This has often left buyers vulnerable to unexpected risks and financial loss if key issues weren't identified before entering into a contract.' The new rules were expected to create a ripple effect through the market, potentially delaying off-market deals and auctions as sellers would need to engage a solicitor earlier to prepare the disclosure documents. Ms Jennison said the reforms, while 'a step in the right direction', left room for improvement. 'In particular, standardising the disclosure of known historical issues would significantly reduce buyer vulnerability and improve transparency across the market.'
CBS News
23-06-2025
- Business
- CBS News
Compass sues Zillow over its "Zillow ban," alleging antitrust breach
Real estate giant Compass is suing Zillow, alleging that the online property website is violating antitrust laws with a new rule that bans home listings from its platform if they appear on any other service for more than 24 hours before being posted on Zillow. Zillow's rule, announced by the company in April, took effect on May 28, with the company saying that the new standard is necessary to ensure that listings are "marketed to every buyer" to give house-hunters "fair access to listings without having to get access behind a velvet rope controlled by any one company." But Compass, which seeks to give some clients a competitive advantage by posting homes before they appear on Zillow and other sites, is alleging that what it calls the "Zillow ban" violates federal antitrust laws. The real estate company claims that ZIllow is leveraging its market dominance to impose the block on listings outside of its website, and that it is aimed at hobbling competition, according to the lawsuit. "This lawsuit is about protecting consumer choice," Compass CEO Robert Reffkin said in a statement. "No one company should have the power to ban agents or listings simply because they don't follow that company's business model." He added, "That's not competition. It's coercion. Imagine if Amazon banned a seller for offering a product on their own website first. That's what Zillow is doing in real estate. Consumers should have the right to choose how they sell their homes." Compass said it has hired Ken Dintzer, a partner in the antitrust division of law firm Crowell & Moring who led the U.S. government's antitrust lawsuit against Google, to represent it in the lawsuit. Zillow didn't immediately respond to a request for comment. Private exclusives With the lawsuit, Compass is defending its three-pronged marketing strategy for home listings that it says can better serve sellers. The first step in the strategy is a "private exclusive" listing that is available on Compass' internal platform, which allows its agents to share information about the home with possible buyers. The second step involves a "coming soon" listing on Compass's website, available to anyone who searches online for properties. The third element involves moving the listing to multiple listing services, or MLS, and onto aggregation sites like Zillow. "For Zillow, every home buyer search conducted on Compass instead of Zillow is a lost opportunity for Zillow to lock that prospective home buyer into Zillow's ecosystem and make money selling her information to real estate agents for a lead fee — Zillow's central business model," the lawsuit claims. The complaint alleges that "Zillow doesn't like the 3-phased marketing strategy because Zillow can't make money selling leads off listings in Phase 1 and Phase 2 where they don't have the listings." Compass, which has more than 33,000 real estate agents, said that almost half of all sellers who signed with them relied on its three-step listing strategy in the first quarter. "In a free and competitive market, competitors' products and strategies should rise and fall on merit — not the whims of a monopolist gatekeeper like Zillow," Compass claims in the suit.
