There’s nothing quite like the looming threat of increased taxation to get real estate deals done. The sale of luxury homes in New York City reached record levels in June ahead of new closing taxes that went into effect on July 1.
The peak in sales applied to all homes priced over $2 million, according to an analysis by the Wall Street Journal, and in total about $4.8 billion of property transacted in June — the highest month on record.
The analysis also found that there were 673 home sales of $2 million or more in June and 351 of those deals closed in the last seven days of the month. (Only 10 other months since 2003 have seen a greater number of deals closed, according to the Journal.) Mammoth transactions included Jeff Bezos’ purchase at 212 Fifth Avenue and John Griffin’s deal for a trophy townhouse on the Upper East Side. Product also traded at record levels at over $10 million and even $25 million, according to the Journal.
The new closing costs that spurred high-end buyers to finalize their purchases include new mansion and transfer taxes.
- Read about the new taxes on residential sales.
- Read about the industry’s mad rush to close their clients’ deals before July 1.
The Real Deal’s preliminary analysis in early July found a year-over-year spike of about 38 percent in dollar volume and almost 10 percent jump in terms of the number of home sales in New York City.
On Wednesday, Douglas Elliman’s parent company, Vector Group, said the brokerage’s revenue jumped up by 18 percent in the second quarter due to New York homebuyers’ rush to close ahead of the new taxes.
Contracts in July quickly dried up, with just one deal over $10 million crossing the line, according to Olshan Realty. [WSJ] — Erin Hudson