Sellers who scrambled to unload high-end properties just before the advent of the so-called fiscal cliff may now be worse off, the Wall Street journal reported.
A record number of luxury sales were completed in December, just before the federal government increased the capital-gains tax rates, new data reviewed by the Journal shows. The surge of deals – December saw the sale of 156 Manhattan apartments priced $4 million and up — was more than 60 percent above peak levels seen during the real estate boom.
“The impulse to minimize taxes is as strong as it’s ever been,” Robert Willens, a tax policy expert told the Journal.
But sellers may have been too hasty. The madcap rush to sell burned through much of the listing inventory and brought prices down considerably. But experts now say that prices are rising.
Lisa Simonsen, a broker at Douglas Elliman, sold her apartment at East 72nd Street for $1.25 million at the end of December, though she had purchased the apartment at nearly $1.6 million. “I am not sure I gave myself the right advice,” she told the Journal, and added that the market was now “on fire.”
New York real estate players — along with their accountants — are watching closely to see how the fiscal cliff will affect the residential and commercial markets in the city, as The Real Deal previously reported.
Gregory Heym, an economist at Brown Harris Stevens and Halstead, said with the Manhattan market now “strong and getting stronger,” the large number of sales last year will only have a short-term effect on sales volume in 2013. [WSJ] –Hiten Samtani