The Manhattan residential real estate market performed strongly in Q1 2025, with sales rising 13.2% year-over-year. Despite ongoing economic uncertainty, rising demand was driven by confidence in property as a secure asset, especially in the high-end market and return-to-office mandates. This shift encouraged many who had left the city altogether to return or move closer to their workplace—a trend likely to continue as pandemic-era norms fade. Although there was resilient demand, contracts signed declined as co-op inventory shortage kept some on the sidelines, a signal that building inventory needs to be prioritized to meet the city's needs. However, overall inventory availability increased, indicating positive movement in the market.
The luxury sector had a remarkable resurgence, with sales of properties priced at $5 million and above climbing 49.2% year-over-year. Similarly, the ultra-luxury market, with properties priced at $20 million and above, saw the highest sales since 2019. Largely insulated by mortgage rate fluctuations and driven by portfolio diversification strategies, this highlights renewed confidence among luxury buyers and underscores the broader generational wealth underway.
Apprehension about the financial markets and trade policies heavily impacted the $1-3 million price segment, which saw a signed contracted decline of 10.3% compared to a year ago. Despite this dip, apartments in other price brackets performed better, including properties within the $500K– $1 million range, the most common type of transaction among buyers. With mortgage rates mainly staying in the six-to-seven percent range, the data indicates that many buyers are not putting their lives on hold.
Downtown accounted for 26.5% of all sales, while the Upper West Side experienced the most substantial growth of any submarket, with a 25.3% increase in sales over the previous year. This growth was largely driven by unique new development inventory and return-to-office mandates, which inspired buyers to act now. This shift has boosted demand in areas within walking distance of Midtown offices, which saw a 21% year-over-year increase in contracts signed.
Overall, the market remains resilient. New York City shows promising signs of continued growth, with inventory up 3.4% year-over-year, providing buyers with more options to choose from. The luxury sector continues to demonstrate resilience, and as summer approaches, the enduring appeal of Manhattan real estate supports a market that remains adaptable– even amidst changing economic conditions.
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