As big-ticket apartment prices drop, given larger state transfer tax, price cuts for Pacific Park condos

New York City Apartment Prices Hit Four-Year Low, the Wall Street Journal reported 9/30/19:

Manhattan apartment sales tumbled during the third quarter and prices fell to their lowest level in four years, a Wall Street Journal analysis showed.
Much, but not all, of the decline was triggered by a higher state transfer tax on luxury Manhattan real estate that took effect in July, brokers and market analysts said.

While the median price of a Manhattan apartment in the second quarter rose 19.3%  to nearly $1.4 million, it dropped to just over $1 million, a reference to the tax-driven sale clusters.

According to StreetEasy:

For fiscal year 2020, the statewide mansion tax will remain at 1 percent for property purchased for $1 million or more. For properties in New York City, however, the new mansion tax will rise incrementally with purchase prices of $2 million or more, capping out at a total of 3.90 percent for properties sold at $25 million or above. That figure includes the 1 percent statewide mansion tax, as do the rates below.

So mansion taxes in the city are zero for properties under $1 million, 1% for properties between $1-2 million, 1.25% between $2-$3 million, 1.5% between $3-$5 million, and 2.25% between $5-10 million.

Beyond the mansion tax, the limited deductibility of state and local taxes, including property taxes, has had an impact, according to Elizabeth Ann Stribling-Kivlan of the brokerage Compass. So that's an incentive for sellers to lower asking prices.

Pacific Park price cuts

Well, there aren't many sponsor units left to sell at 550 Vanderbilt, where sales started four years ago (!), but some of them are high-priced ones. Below are the five currently listed on StreetEasy (others are unsold but not listed).

Presumably some, but not all, of the price cuts are related to the transfer tax, compounded, of course, by the desire to move product during a long sell-through.

Unit M1 (Maisonette 1): $4,175,000. It was once $4,650,000, according to the 8th Amendment to the Offering Plan. That's a 10.2% drop.

Unit 1401: $1,999,999. It was once $2,160,000. That's a 7.4% drop.

Unit 1110: $1,425,000. It was once $1,685,000. That's a 15.4% drop.

Unit PHE (Penthouse East): $5,000,000. It was once $5,805,000. That's a 13.9% drop.

Unit PHW: $5,995,000. That's a 12.6% drop from the original $6,865,000, as noted in the screenshot from StreetEasy.