New York City's mansion tax impacts housing cost

The average price of a Manhattan co-op or condo fell to $1.8 million in the fourth quarter of 2019, according to Douglass Elliman, the largest real estate brokerage in the New York City area, the Financial Times reports.

Why it matters: "The Manhattan property drop is in sharp contrast to the rally on Wall Street, where stock markets have hit new records."

• The price per square foot declined 6.1 per cent to $1,581.

What's happening: New York City's mansion tax, which took effect July 1, "levied a sliding scale of charges on apartments selling for more than $1m."

• "Trump’s tax law limited the amount of state and local taxes households could deduct from their federal taxes."
• That "has been blamed for spurring a flight by wealthy New Yorkers to Florida, which has no personal income tax."

Younger buyers still flooded into Brooklyn and Queens, and sought out studios and one-bedrooms in Manhattan, the FT added.

Go deeper:

• Household income stagnates as home prices soar
• Affordability is driving Americans' decisions on where to live
• Americans are moving less