The Luxury Home Market Confronts Its New Reality: Not Enough Buyers and Sellers

wsj.com

3 points·sam345··4 comments

> new measure, which was implemented April 1, requires sellers to pay 4% on sales of homes priced between $5 million and $10 million, and 5.5% on sales of properties at $10 million or above. “We were flooded with shoppers in March. Then, things just came to a screeching halt. It was such a change in the amount of people coming to view the home that it felt like it wasn’t even on the market,” she said.

Interesting re the effect of mansion tax in L.A. Not much of a revenue raiser if sales are hurt. Must hurt property taxes also as less reappraisals and lower values.

Maybe. Did sellers raise their prices 4% in response?

> She chalked up the drop to rising interest rates, an outward migration from Los Angeles to lower-tax states, the introduction of a new mansion tax and more recently, the strike by both the actors’ and writers’ unions.

The article discusses interest rates a lot. The mansion tax may play a role.

> Not much of a revenue raiser if sales are hurt

This is the expected transient for people with elasticity that could come on the market before the deadline. After a while this will become the norm and people will buy and sell again. Sellers often pay more than 4% is broker fees.

https://archive.is/9d1sb

Reply on news.ycombinator.com