Manhattan’s luxury market is thriving despite the Big Apple’s impending pied-a-terre tax on second homes worth more than $1 million.
According to Olshan Luxury, 36 deals worth $4 million or more were signed last week, eight more than the previous week and the most since the first week of June. report.
The Upper East Side took the crown for the most popular area, and condos outnumbered co-ops — as they usually do. But this time, the gap between them was much smaller, with 19 apartments sold, just six more than co-ops.
Not only are co-ops older than condos, they often require a laborious board approval process. However, they are usually cheaper. Last week, the average asking price for a luxury-level co-op was $9.4 million, versus $6.8 million.
The top-selling property was a six-bedroom penthouse condo at 255 East 77th Street for $23.75 million, or $4,303 per square foot.
The main attraction here is undoubtedly the 36-degree view of Central Park from almost all rooms and two terraces totaling 363 square meters. A six-bedroom condo of this size — 5,520 square feet — is rare and took just five months from single listing to contract.
Designed by Robert AM Stern Architects, the building features amenities such as a doorman, concierge service, lounge, children’s playroom, golf simulator, library and automated parking system. The fitness center includes a yoga room, a spa with steam room and sauna, a massage/treatment room and a 75-foot lap pool.
Alexa Lambert Compass, the company that owns the listing.
Last week’s second-highest sale, a sponsored condo at 53 W. 53rd Street, asked $21.53 million. The 3,762-square-foot three-bedroom with a north view of Central Park sold the day it was listed, suggesting it could be an off-market deal.
Luxury buyers shrug off new tax
A strong luxury market belies warnings that it will collapse after the pied-à-terre tax takes effect on July 1.
For a secondary home apartments and cooperatives fair market value between $1 million and $3 million, the surcharge rate is 4.0%. From $3 million to $5 million, it’s 5.25%. And for $5 million or more, it’s 6.50%. (The tax is currently collected annually and is due to expire on June 30, 2031.)
The introduction has been fraught with delays and legal challenges, and only about 55% of those facing a tax bill have successfully appealed to date. City.
Michael Reisor Of Reisor Team, affiliated with Compass, who recently sold a $4.5 million loft condo Schumacher The complex, which will be used as a pied-a-terre on Bleecker Street in Noho, said the upcoming tax has not deterred the wealthy from investing in Manhattan.
“Any type of product in Manhattan is only going to get more expensive over time,” he tells Realtor.com. “New York will always be New York. If you’re waiting for news on the pied-a-terre tax, you’re going to wait too long and miss the market.”
New York isn’t the only area that wants to raise taxes on the rich. Whether it’s California’s proposed Billionaire Tax or Washington’s millionaire tax (to take effect in January 2028), a growing number of states are looking to increase their coffers by taxing the wealthy in one form or another, leaving elite buyers with fewer choices about where to live if they want to avoid higher taxes.
“We’re not seeing people not buying the products they want because of tax fears, and this week’s numbers reflect that,” the broker said. “Nobody’s going to kick New York out because of taxes.”
Buyers can adjust their price points a bit, Reisor says. But most affluent buyers prefer to adjust their budgets in other ways if need be, rather than downgrade their lifestyle (and major assets).
He talks about one client, a pied-a-terre owner, who was looking for something cheaper due to the new tax, but preferred a property that met his desires and standards.
Wealthy buyers “kind of put their heads above water, look around and go, ‘Hey, I’ll do the taxes,'” says Reisor. “There’s a price to being in Manhattan that people think is worth it.”
Michelle Griffith Douglas Elliman, which brought the city’s second-highest sale to a buyer two weeks ago, tells Realtor.com that luxury agents are “all the more surprised at the strength of the luxury market.”
Griffith attributes the strong market to two factors: a lack of inventory and a tight rental market.
“It’s a lack of inventory at all price points,” he told Realtor.com. “You combine that with rents going through the roof. It’s getting people who live and work in Manhattan, with kids in school, and it’s pushing them into buying scenarios.”
He says high-end apartments that used to rent for $25,000 a month are now entering bidding wars and going for double that price. Those who don’t want to pay the monthly rent are forced into the buy-to-let market, which has a backlog of inventory.
“For the longest time, people were saying, ‘Let’s wait for more inventory to come on the market,'” he said, adding that this fall is down about 30%. “We’re not seeing new inventory.”
He adds: “We tell our clients, ‘Listen, there is no such thing as a perfect apartment.’ If he checks seven out of ten boxes, you should move forward with him.”
The broker also notes that buyers who previously wanted to buy turnkey apartments have changed their minds due to the fact that the apartments of their dreams did not materialize.
“Those (turnkey) properties are gone,” he says. “Now many buyers say, ‘I’m not afraid to repair, I’ll take on a project.’
The location — especially the Upper East Side — is at its best. Buyers are willing to renovate in their desired neighborhood.
The number of pre-war co-ops that moved in last week proves the point that buyers are willing to overlook that maybe some updating is needed to get what they want: a great location, a spacious (4,000-square-foot-plus) layout, and lots of (three or more) bedrooms.
The top-selling co-op, a 1925 5-bedroom at 860 Park Ave., is “immaculately maintained,” asking $10,950,000, and ultra-luxury (top 1%) co-ops in the county, starting around $5.6 million, generally won’t need much work.
But Griffith says high-end buyers are more willing to accept a project provided the property checks a certain number of boxes. They will hire that contractor for the right size, placement and location.
“It shows a long-term commitment to Manhattan,” he says.
