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Mentioned in this Article:
Diane M. Ramirez

Diane M. Ramirez
Chief Executive Officer


Manhattan Apartment Prices Hit New Low Amid Tax Worries Report

MANHATTAN, NY — Manhattan apartment prices hit a new low in the last three months of 2017 as debate over a federal tax overhaul made high-end buyers hesitant to close sales, a study released Wednesday shows.

A drop in luxury sales drove the average price in the borough down to about $1.92 million for the fourth quarter of last year. That's 7 percent lower than the end of 2016 and the lowest average price since the third quarter of 2015, according to the report by the real estate firm Halstead.

Prices for the largest, most expensive condominiums and co-operative apartments fell the most, the report found. Co-ops with three or more bedrooms went for 18 percent less on average than a year ago, while large condos went for more than 12 percent less.

The drop in prices coincided with debate over and passage of a federal tax bill that makes it more expensive to own pricey properties in high-tax states like New York. The Republican law President Donald Trump signed last month caps federal deductions for state and local taxes at $10,000, meaning Manhattan buyers can write off less of their property taxes.

"The luxury market was relatively quiet in the fourth quarter, bringing the average apartment price down, as we saw uncertainty from buyers related to changes to the tax code," Diane M. Ramirez, Halstead's chairman and CEO, said in a statement. "Now that the implications of the changes are clearer as we head into 2018, buyers are starting to become more decisive and ready to move on properties they perceive as a great value."

Manhattan saw a total of 2,187 sales in the last three months of 2017, Halstead found. That's 4 percent more than the end of 2016, when the presidential election and the fallout from the United Kingdom's vote to leave the European Union made buyers even more skittish.

Sale prices in Manhattan declined throughout the last six months of 2017 after increases in the first half of the year, the report says. Sellers typically got 97.4 percent of their asking prices, down slightly from 97.9 percent a year before.

The price per square foot in new buildings has been falling even longer. It hit $1,989 in the fourth quarter of last year, down from $2,254 in the fourth quarter of 2016.

The borough's West Side was a hot spot for sales in brand-new buildings. The area accounted for a quarter of closings in new developments, while 23 percent were in Downtown Manhattan south of 14th Street.

Manhattan's real estate market is stagnant compared to Brooklyn, where the median sale price has been rising steadily since 2011, according to a report last year from Douglas Elliman, another real estate firm.

Brooklyn recorded about 4,000 sales at a median price of about $800,000 in the third quarter of 2016, that Douglas Elliman report found.

Wednesday, January 03, 2018

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