Not good news if we’re hoping they’ll move here

Luxury apartment sales in New York freeze. Down 87%, according to the Times.

On the other hand, common charges are soaring and the wicked rich are being dragged up to the sacrificial alter of taxation yet again, so who knows? My conclusion? It sucks to own Manhattan real estate.

Buildings that in a stronger market relied on income from flip taxes — a sort of transfer fee for each sales transaction — may also struggle now that sales volume throughout the city has been reduced to a trickle.

Robert Berliner’s 277-unit building on Sutton Place has a 2 percent flip tax for outside buyers, which he said “was a pretty significant source of revenue in 2006 and 2007.” The building had used that income to meet operating costs, but because there are now so few apartments changing hands in the building, the board has shifted its flip tax revenue into its reserve fund. “We’re trying to be more realistic and more conservative in dealing with our budget,” he said.

Mr. Berliner said that because real estate taxes are so high for the building, the board may consider raising the flip tax to 3 percent. Property taxes were just under $3 million last year and represented the single largest expense in the building’s $7 million budget.

Mr. Berliner, who is the co-op’s board treasurer, said that the city raised the building’s assessment by 25 percent in 2008, but the building challenged the increase and got it reduced to 10 percent.

“But when you consider the state of the economy and what’s happening in real estate values,” he said, “how the city could have come up with any increase in assessed valuation is beyond me.”

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2 responses to “Not good news if we’re hoping they’ll move here

  1. anonymous

    Upside for Greenwich is many smart, young financiers have rented condos in Manhattan for years…as viewed RE as a dubious, illiquid investment

    Those w/kids will likely consider fleeing to Greenwich; those w/o kids will prob continue to rent in Manhattan simply for lifestyle of better daily grub at Daniel or at the food court at TimeWarnerMall

  2. jobwhore

    Who cares? There won’t be any fat salaried Wall Street jobs for any of these swine going forward, so they won’t be living large or buying anywhere.

    Those who managed to hang on to their fortunes will not be moving to Greenwich en masse. They will be moving into lower tax states (e.g. Florida)and offshore. Having anything to do with NYC will be a disaster until Paterson is removed from office.

    New York will likely be declaring bankruptcy under Paterson and the implosion is just beginning in this area. If anyone thinks greater NYC is going to turn around soon, they are delusional.

    Much of Wall Street is gone forever. The bubble was never sustainable and the prices have a long way to drop before reaching bottom.

    Hold on to your hats!