Massey Knakal executives predict that the sales market for office buildings and apartment properties will pick up considerably in 2012, due in large part to a combination of record low interest rates and widespread expectations that the capital gains tax rate will rise next year.
“We’re going to see a natural regression in 2012 back to the norms,” said Robert Knakal, Massey Knakal’s chairman, noting that the volume of properties sold in the city has been below the historical average since the recession and is likely to bounce back. “The potential increase in capital gains that could take place in 2013 [is a big driver]. We saw a significant spike in sales volume in 2010 for the very same reason.”
Mr. Knakal predicted that development parcels in the city would be among the best appreciating assets during the year, anticipating they could rise by 20-30 percent in value due a dearth of both residential and commercial development in the city in recent years.
“There has been such a low supply of new product put on the market,” Mr. Knakal said. “Developers anticipate the market two to three years in advance and most are feeling optimistic about the end user demand in that time frame.”
Paul Massey, who with Mr. Knakal co-founded the brokerage company also highlighted the popularity of development sites.
“We were creating thousands of luxury residential units per year but that production ceased three and a half years ago,” said Mr. Massey, who together with Mr. Knakal and other company executives, delivered their comments during a meeting yesterday morning with the media to present their outlook and year end market statistics for 2011.
Massey Knakal compiled a host of encouraging data that shows the sales market in the city is bouncing back since falling precipitously during the economic downturn. Citywide, $25.6 billion of property was sold in 2011, an 80 percent increase from 2010, and 2,122 properties changed hands, a 25 percent increase in volume year over year.