As the real estate market in Manhattan continues to change, one developer recently offered a unique option for high-end condo shoppers to get them off the fence, adding yet another wrinkle to a competitive market. According to a report by Bloomberg, Toll Brothers Inc. recently offered to pay the taxes on your purchase … provided you act soon. This offer includes payment of city transfer tax and the New York state “mansion tax.” The company took action as the fluid market, which now has a glut of pricey condos and buyers staying on the fence. These incentives can be enticements without cutting prices, according to Joshua Stein, a Manhattan real estate lawyer.
“Developers like to pretend that values haven’t gone down. Eventually you’ll see discounting off the face price. But this is a form of denial.”
According to Bloomberg, there is another change looming in the Manhattan market. Contracts for luxury homes – those at $4 million and higher – have seen increased interest in the first quarter of 2017. The market is seeing sellers who are willing to adjust their asking prices, according to data from Olshan Realty Inc. During the first seven weeks of 2017, there were there were 154 luxury deals, a 33 percent jump from the same period of 2016. Another change demonstrated in the current trend is a shift in asking price. The median asking price of luxury homes during the first part of the year is $6.3 million, down 6 percent from a year earlie. Donna Olshan, president of Olshan Realty Inc., said this may be an indication developers were too aggressive.
“Developers went out at numbers that were too aggressive, and are still too aggressive. Toll Brothers is a public company, and they have realism. If it’s not selling, they’ll adjust – and they’ll adjust quicker than somebody else.”
While Toll CEO Doug Yearley said “demand at our New York City projects is not as strong as it was several years ago when the market was on fire,” trends show the incentives, which Toll Brothers says is part of a national sales event, indicate that there are definite changes in the market. Olshan said developers are tired of sitting on stock and are ready to be proactive to reduce the number of units they have on the market.
“They’re signaling to the market, ‘We want to move our product.’ Developers who take prices down are the ones who’ll get rewarded.”