Despite the barrage of news about a stagnate real estate market, Manhattan continues to set records. In Q2, the Manhattan median sales price hit a new record. Sales were up for the first time in six quarters–to the tune of 12.5%. The borough was ranked as the most expensive rent in the US. And in June, Manhattan had a record-breaking month for luxury real estate sales–$4.8 billion in transactions, the highest ever.
Apart from the overall record, June also set a record for the most sales above $2 million, $10 million, and even $25 million. It’s pretty amazing that after Ken Griffin’s January bombshell buy for $238 million, June still buried January in lux sales. Why? The mansion tax that went in to effect on July 1.
The graduated mansion tax is a one-time fee that slaps 1% on homes between $1-2 million, 1.25% on homes between $2-3 million, up to 4.15% on homes over $25 million. Now, if you’re buying a $1 million home, that extra 10 grand may not break the bank, but if you’re buying a $238,000,000 home… it wouldn’t break your bank either. But the tax would be nearly $10 million. This provided incentive enough for many luxury buyers to accelerate their purchase plans to avoid the tax.