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.
