Today we bring you the 16th anonymous weekly column about real estate by one of the most experienced agents in Brooklyn:
One reason inventory is so tight in brownstone Brooklyn is that there are so many downsides to downsizing. Here are a few — maybe a creative type might use them to drum up a great purchase.
When a brownstone becomes an empty nest, thoughts turn to downsizing. Visions of high sales prices turning into bulging bank accounts abound. I have been called in to discuss the sale many times. Once the subject of taxes comes up, the visions are deflated. (Please note that I am NOT a tax advisor.) Capital gains taxes will eat a substantial amount of profit and real property transfer taxes will be due. Many sellers stop dead in their tracks when they learn those numbers and vow to be carried out of the house on a box.
If a seller can get past the taxes, the talk turns to “where will we live.” Most residents of brownstone Brooklyn would love to stay in their welcoming and walkable neighborhoods. The search begins for a full service coop or condo with a doorman and an elevator. And guess what? There are hardly any. Usually these folks would like to move into a renovated place, which depletes the supply even further. And if they can find such a home, it is likely to use up the vast majority of the sales price of their house.
Then talk turns to renting. While that might be a good option, most rental apartments in Brooklyn are geared more toward those just out of school than those just out of a grand old townhouse. The compromises look insurmountable.
So how can one downsize and capitalize on the value of a townhouse? The sad thing is that it usually requires leaving Brooklyn. Decamping to a much less expensive area makes it all work. Taxes can be paid, profits can be banked, and life goes on.