Manhattan condo sales increase in June as buyers rush to avoid mansion tax: Elliman

The mansion tax came into effect on July 1

New York /
Jul.July 02, 2019 07:00 AM
The median sales price in Manhattan rose a record 10.5 percent to $1,215,000

The median sales price in Manhattan rose a record 10.5 percent to $1,215,000

In June, as the deadline for the mansion tax neared, buyers rushed to close condo and co-op sales across Manhattan, triggering a sharp uptick following months of decline.

Figures from the latest Douglas Elliman market reports show that year-over-year sales increased in June for the first time in six quarters, and the median sale price increased by a record 10.5 percent to $1.22 million.

The spike was driven in part by the expanded mansion tax on residential properties sold for more than $2 million and the increased transfer tax for properties over $3 million. Both came into effect on July 1.

Jonathan Miller, CEO of the appraisal firm Miller Samuel and author of the report, said the June sales — while positive for the industry — were a “perfect storm” in response to the tax changes, rather than an indication of market recovery.

“The uptick in activity is essentially poaching from the third quarter,” he said. “Logic says, if we’re poaching from the future, we’ll see a lower level of activity in the next quarter.”

In 2018, sales dropped sharply after the introduction of a new federal tax law, Miller said, meaning the current figures were being compared against a period of unusually low sales activity. The trends in both periods were influenced by tax changes.

Most of the June growth was seen in the $2 million- to $5 million-property range, which meant that while the median price increased significantly, the overall average increased by just 0.2 percent to $2.1 million.

The number of sales increased 12.5 percent to 2,957, and the price per square foot rose 1.7 percent to $1,762.

Amid the positive figures, the report noted that listing inventory also increased 8.2 percent to 7,558 in June.

“Resale inventory is up 10 percent; overall inventory is up. That tells me the market is still not robust,” Miller said.

In the northern Manhattan sales market, listing inventory for condos and co-ops also expanded for the fifth straight quarter, while the median sales price increased 1.5 percent to $589,000.

According to the Brown Harris Stevens 2nd Quarter 2019 Manhattan Market Report, sellers of resale apartments offered their biggest price discounts in nine years over the quarter. The average resale price fell 5 percent on the previous year to $1.64 million.

The Brown Harris Stevens report showed a 71 percent increase in new development closings compared to the second quarter of 2018 — 40 percent of which were in downtown Manhattan.


Related Articles

arrow_forward_ios
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
30 Front Street & 294 Park Place (Streeteasy, Getty)
Brooklyn luxury market can’t shake slump
Brooklyn luxury market can’t shake slump
From left: 74 Wellington and 1 Clinton
Brooklyn luxury contracts bounce back with a bump in bargains
Brooklyn luxury contracts bounce back with a bump in bargains
Extell's Gary Barnett and Central Park Tower (Kidfly182, CC BY-SA 4.0, via Wikimedia Commons, Barnett via Paul Dilakian)
Breaking down Extell’s sky-high ask at Central Park Tower
Breaking down Extell’s sky-high ask at Central Park Tower
Front & York, Beckford House & Tower and Aman New York Residences (Zillow, Streeteasy, Aman New York, iStock, Illustration by Kevin Cifuentes for The Real Deal)
Bye bye, sugar high: New dev contracts slow in June
Bye bye, sugar high: New dev contracts slow in June
Vlad Doronin with 205 East 85th Street, 1059 Third Avenue and 730 Fifth Avenue (Getty, Brown Harris Stevens, Corcoran, Aman)
Mystery buyer drops $76M on Crown Building condo
Mystery buyer drops $76M on Crown Building condo
From left: 56 Leonard Street and 443 Greenwich Street with Justin Timberlake and Jessica Biel (Getty, StreetEasy, iStock)
TRD Pro: Ranking Tribeca’s priciest residential deals of the past year
TRD Pro: Ranking Tribeca’s priciest residential deals of the past year
Carlton Hobbs with 60 East 93rd Street (Getty, Google Maps)
One of NYC’s widest townhouses sells for $53M
One of NYC’s widest townhouses sells for $53M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...