Fears of tax hikes in 2013 sent sales of high-end Manhattan properties soaring.
Total sales of both co-ops and condominiums jumped 40 percent in the fourth quarter of 2012 year from the same period in 2011, according to a new report from Brown Harris Stevens. The average co-op price of $1,285,426 was 12 percent higher than a year ago, while three-bedroom and larger co-ops saw a 34 percent price leap.
(Read More: America's Most Expensive Homes 2012.)"With the upcoming changes in tax laws, record low interest rates and the inventory of available apartments at 30 percent below where it was a year ago, the incredible activity in the fourth quarter was not surprising" said Hall. F. Willkie, president of Brown Harris Stevens Residential Sales.
Sales of properties priced over $10 million rose 44 percent from a year ago, and this does not include several major transactions in the last days of the year. One record $54 million east side co-op sale helped push average prices higher in that area by 20 percent.
As with the rest of the country, limited inventories of properties for sale are also causing price spikes. The number of properties for sale in Manhattan fell to the lowest level in 12 years according to another report from Douglas Elliman. Fourth quarter sales were the highest in 25 years.
(Read More: 10 Unique Multimillion Dollar Homes.)
"It was the most active fourth quarter I have ever experienced in my entire career," said Dolly Lenz, vice chairman of Douglas Elliman. "Although at different ends of the market, the looming fiscal cliff, just like the first time home buyer tax credit, effectively stole sales from the future. I now expect the market to stabilize both in terms of activity and prices. But we still have a long way to go before we can declare that the housing market has fully recovered."
The price gains, however, were largely on the luxury end. In looking at the median prices, where half sell for higher and half sell for lower, prices for co-ops were up just 2.1 percent in the fourth quarter. Condominium prices actually fell just under one percent.
(Read More: Extravagant Home Features of the One Percent.)
The median price in the luxury market, however, was $4,440,150, up 7 percent from a year ago, according to Douglas Elliman. The luxury market represents the upper 10 percent of all co-op and condo sales.
"The year-end jump in sales was a function of proactive tax management by property owners. Although it wasn't clear what form the tax hikes related to housing would take, it was assumed that 2013 would be higher than 2012," noted Jonathan Miller, CEO of Miller Samuel, which provides the Elliman report data.
Prices in Manhattan are still about 6 to 7 percent off their pre-recession highs, but low supply will likely narrow that gap in 2013. Strong demand from foreign, all-cash buyers is also boosting prices, especially in the condo market. Gains, however, may slip in the current quarter, as so much demand was pulled forward.More From CNBC
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