Thank the fiscal cliff? Manhattan co-op and condo deals shot up at the end of 2012 for the strongest fourth-quarter sales in 25 years, according to several housing reports released today.
Prompted by a recovering economy, rising rents and the prospect of tax hikes in 2013, fourth-quarter home sales in the borough increased by 29 percent year-over-year, according to the Douglas Elliman quarterly report prepared by Miller Samuel. Usually, sales lag in the fourth quarter because of the holidays.
“It was the most active fourth quarter I have ever experienced in my entire career,” Dolly Lenz, vice chairman of Douglas Elliman, told CNBC. “Although at different ends of the market, the looming fiscal cliff, just like the first-time home buyer tax credit, effectively stole sales from the future.”
Many of the sales gains occurred in the luxury market; Brown Harris Stevens reported a 44 percent annual increase in sales of property over $10 million. The average co-op price of $1,285,426 was 12 percent higher year-over-year, while the average condominium price fell slightly to $1,806,329. Apartments in new developments sold for an average of $1,244 per square foot in the fourth quarter, a gain of three percent from the previous year.
“People wanted to close before Dec. 31,” said Brown Harris Stevens President Hall Willkie told Crain’s. “We were under a lot of pressure with most of our deals.”
Listing inventory shriveled 34.2 percent to 4,749, the lowest inventory total in 12 years, according to the Elliman report. The shortage of listed homes has sped up the market pace; the fourth quarter rate was 5.5 months, nearly half the 10.8-month rate of the same time period in 2011 and the second-fastest rate in 12 years.