The mansion tax had a clear impact on the end of 1H2019. Total dollar volume city-wide is up 25% year-over-year, and transaction volume is up 27%. Pricing however, remains flat with only a 1% and 2% increase in average sales price and average price per square foot (PPSF), respectively. The year got off to a slow start in 1Q2019, but dollar volume doubled in 2Q2019 to $1.3B. This was driven by a surge in sales volume due to the mansion tax increase being implemented in July 2019, as buyers and sellers rushed to complete their transactions before that tax increase went into effect.
Notable sales this quarter included the record breaking sale at 14-16 East 67th Street, a renovated single-family townhouse which sold for $77.1M and $5,414/ft, now the highest priced residential townhouse sale in NYC to date. Downtown, one of the more notable sales was in the East Village at 64 East 7th Street, a renovated single-family home which sold for a huge number for the neighborhood at $15.75M and $2,100/ft. 15 West 76th Street, sold for $16,500,000 ($1,671/ft) to its neighbor, The New York Historical Society. The Upper East Side and Brooklyn Heights had particularly active quarters. There were 24 sales in June alone on the Upper East Side, and 6 in Brooklyn Heights, which had only 3 total sales going into 2H2019.
Looking forward, on the residential front downward pricing and volume risks exist now that the mansion tax is in place. On the commercial front, there is the potential for significant disruption in the multi-family market due to the new rent regulation laws, as the income growth potential for properties in the sector will clearly be diminished.
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