In contrast to the slowdown in the national market, Manhattan residential sales have been experiencing steady growth throughout 2025 with median and average sales prices, sales volume, and signed contracts increasing every quarter on a year-over-year basis.
Sales volume exceeded the decade average while increasing more than 9% year-over-year, marking the fourth consecutive quarter of year-over-year growth. With sales continuing to outpace inventory, supply declined by almost 1.5% compared to the same period last year. Median and average sales prices increased year-over-year by 4.3% and 4.4% respectively. The median price during the third quarter was $1.2M while the average price increased to just over $2M.
What's selling:
- Well priced, renovated properties in sought after neighborhoods.
- Properties priced above $1M. Last quarter the highest number of closed sales were in the $1-3M price range, while the luxury market ($4M+) outperformed the broader Manhattan market.
- Well-maintained buildings with reasonable monthly carrying costs.
What's not:
- Unrenovated properties, unless priced aggressively. Buyer are wary of the inconvenience and increasing cost of renovations.
- Entry level properties below $1M This is the most interest rate sensitive segment of the market and one that represents opportunity for buyers. Motivated sellers should be ready to negotiate, especially those who bought at historically low rates and now are facing lower market values.
- Homes in buildings with high monthly carrying costs and properties in land-lease buildings.
Entry level buyers remain hesitant
Many would-be buyers remain in rental properties, waiting for interest rates to decline further. This dynamic continues to weigh on the entry level segment of the market. Once rates hit a tipping point (likely <6%) we can expect pent-up demand to be released, driving these prospective buyers into the market.
Sellers have reasons to remain optimistic
The Manhattan sales market continues to show steady growth, a trend expected to extend through the remainder of 2025. This continued momentum is supported by the increase in signed contracts during the most recent third quarter, most of which will close in the fourth quarter.
Looking ahead to 2026, several factors are expected to further strengthen the market, including lower interest rates, a strong equities market, robust Wall Street bonuses, and a weaker U.S. dollar that's likely to draw increased foreign buyer interest in New York City real estate.
