A strengthening economy and fears of looming tax hikes combined to trigger a surge in fourth-quarter sales of co-ops and condominiums in Manhattan, according to reports from several residential brokerages out Thursday.
Last year’s final three months saw the heaviest fourth-quarter activity “in at least 25 years,” according to Jonathan Miller, president of Miller Samuel Inc., which prepares the quarterly analysis for Douglas Elliman. To be more precise, that report tracked a 29% increase in fourth-quarter sales from the same time last year. Sellers rushed to close deals in 2012, anticipating higher tax rates in the New Year, Mr. Miller said. Typically, sales slow in the fourth quarter because of the holidays.
“We had this extension of the third quarter into the fourth quarter,” Mr. Miller said. “A lot of people were seeing higher taxes, post fiscal cliff.”
Consistent with that view, sales of pricier properties were especially strong. Brown Harris Stevens reported a 44% surge in the number of sales of units costing in excess of $10 million from the same time last year.
“People wanted to close before Dec. 31,” said Brown Harris Stevens President Hall Willkie. “We were under a lot of pressure with most of our deals.”
Having gotten so many deals done, he said that it is possible that the activity in the current quarter will slow considerably.
All that selling took a big toll on available inventory, which dropped by 34% from year-end levels of 2011. Other brokerages also reported significant decreases in inventory. Street Easy reported a 14% drop in total inventory, while Corcoran Group reported a 17% slide.
“You really depleted all your [stock of units],” said Dottie Herman, president of Douglas Elliman. “Stuff that’s been hanging around has been sold.”
Mr. Miller said the thin supply on the market looks to be setting the stage for price rises this year, following many quarters where they have been relatively flat. The median sales price in the Elliman report for the fourth quarter was $837,500, down 2% from the same time in 2011.
Meanwhile, Brown Harris Stevens reported an increase in median sales prices in the borough, brought on by “a sharp increase in high-end sales.” The median Manhattan apartment sales price in last year’s final quarter hit $836,000, up 6% from last year, according to the brokerage.