New York City's real estate market is starting to suffer

The New York City real estate market is hitting a slump -- and that may make it harder for sellers to offload property that they no longer want or can afford to keep.

The city's real estate market has been experiencing problems for several reasons. The reforms created by the Tax Cuts and Jobs Act of 2017 put a cap on the deductions that property owners can take on their federal returns for state and local taxes. The new mansion and transfer taxes are also hitting the wealthy harder and affecting the market.

The overall effect has been to soften the market in wealthy areas, making it harder to offload a pricey property. Luxury homes that might have been snapped up a year ago are now sitting on the market for months before eventually being sold at a discount.

The problem seems to be across the board, affecting both apartments and single-family dwellings. Apartment resales dropped 5% in the last year and new development prices dropped 9%. Home prices in Manhattan are dropping faster than any time since the 2008 financial crisis. Homes in the Hamptons, which have long enjoyed relatively stable real estate prices, are also experiencing losses.

This sort of downturn in the market can easily force many property owners into a financial bind, especially if a change in financial circumstances is forcing them to sell. If a property owner can't wait until the market recovers, they may have to try to sell their property for less than they owe the bank through a short sale or look for other methods to relieve their burden.

If you find yourself in this position, don't attempt to handle negotiations on your own. Get advice from an experienced real estate attorney so that you know all of your options.