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A model of this text first appeared in CNBC’s Inside Wealth e-newsletter with Robert Frank, a weekly information to the high-net-worth investor and shopper. Join to obtain future editions, straight to your inbox.
Greater than a 3rd of the rental flats bought in Manhattan over roughly the previous yr bought at a loss, though the highest finish of the market fared higher, based on a brand new report.
Regardless of the regular stream of headlines about eye-popping gross sales and hovering costs in Manhattan actual property, the median worth per sq. foot for Manhattan condos is basically flat from a decade in the past, based on a report from Brown Harris Stevens. One in three rental resales between July 2024 and June 2025 have been bought at a loss, based on the report. When together with inflation, transaction prices and renovations, the share of losses by rental sellers is probably going even larger, based on actual property analysts.
Whereas the info did not embody co-ops, analysts say co-op costs have usually fared the identical or barely worse than condos.
“For the final decade, Manhattan has primarily been shifting sideways,” stated Jonathan Miller, CEO of Miller Samuel, the appraisal and actual property analysis agency.
The long-term worth weak point in Manhattan stands in stark distinction to a lot of the nation, the place residence costs are up considerably for the reason that pandemic, making a widespread affordability disaster. Solely 2% of residence sellers nationally who bought houses earlier than the pandemic are susceptible to promoting at a loss, based on Redfin.
Manhattan continues to be among the many most costly markets within the nation, particularly on a per-square-foot foundation. The median worth for Manhattan gross sales within the third quarter was $1.2 million, whereas the common is slightly below $2 million, based on Miller Samuel and Douglas Elliman. But over the long run, an evaluation of resales finds that the timing of purchases in Manhattan usually issues greater than location.
Apartment homeowners who purchased earlier than 2010 have fared the very best. The median features for these in that cohort who bought over roughly the previous yr have been between 29% and 45%, based on the Brown Harris report. Costs began to rise after the monetary disaster, peaking in 2016. Meaning for individuals who purchased between 2011 and 2015, the sale features previously yr have been modest, round 11%.
The largest losers have been those that purchased after 2016. Half of the consumers who purchased between 2016 and 2020 bought at a loss over the surveyed interval. Amongst those that purchased between 2021 and 2024, the features have been slim – though some consumers who bought offers in the course of the depths of the Covid downturn in late 2020 and early 2021 might fare higher.
Including in different prices of shopping for, promoting and possession would additional add to the losses. Transaction prices in Manhattan can vary from 6% to 10%, based on brokers. Renovations and enhancements additionally aren’t counted within the losses, nor are upkeep charges or taxes. Adjusting for inflation would additionally enhance the losses and decrease returns.
Stijn Van Nieuwerburgh, co-director of the Paul Milstein Heart for Actual Property on the Graduate Faculty of Enterprise at Columbia College, stated inflation has elevated 36% over the previous decade.
“So if I had invested in a Manhattan rental in September 2015 (near the height) and bought it in August 2025 for a similar nominal worth, a 0% nominal return, I really misplaced 36% in actual phrases,” he stated. “That is stunning since many individuals consider actual property as a superb inflation hedge.”
He famous that the Case-Shiller nationwide residence worth index went up 89% within the 10 years between September 2015 and August 2025, “rather a lot higher than in NYC and likewise far larger than the 36% inflation.”
The explanations for Manhattan’s “misplaced decade” in rental costs are as diversified as they’re disputed. The cap on state and native tax deductions that started in 2018 put stress on costs and demand, as did a 2019 hire legislation. The migration of some larger earners to Florida throughout Covid additionally added to actual property fears, though the inhabitants and demand shortly rebounded.
The one exception to the development was the highest of the market. Those that purchased and bought flats for $10 million or extra made double-digit income, irrespective of after they initially purchased.
Brokers and analysts say the elevated focus of wealth on the high, rising inventory markets and ceaseless demand from those that are much less affected by financial and market cycles has powered continued features within the luxurious market.
“The upper finish has fared higher over the last decade, particularly in, as an example, the highest 4% of the market,” Miller stated. “The reason being Wall Road and monetary markets. And the flexibility to purchase in money, unbiased of rates of interest.”
Two thirds of the house offers achieved within the third quarter have been achieved in money, Miller stated, far above the historic common of round 53% and displaying the continued dependence of the Manhattan market on rich consumers who do not want mortgages.
In a market outlined by frequent ups and downs, brokers say the present upswing presents a possibility for each consumers and sellers.
“I am bullish and have a really constructive outlook for New York actual property,” stated Jared Antin, govt director at Brown Harris Stevens and a co-author of the report. “Whereas some folks might have misplaced cash on the offers [over the decade], the losses have been negligible. It speaks to the blue chip nature of the Manhattan market. Does everybody need to generate profits on their actual property? After all. However this market is extremely secure.”
Sellers who purchased in the course of the dip in 2020 and early 2021 might additionally see income after they begin to promote, Antin stated.
Nonetheless, with median costs hovering close to all-time highs and uncertainty across the upcoming mayoral election, many potential consumers choose to remain on the sidelines and hire, even when they’ll afford to purchase. The variety of households in New York Metropolis making greater than $1 million a yr who’re renting greater than doubled between 2019 and 2023, to five,661, based on a report from RentCafe.
What’s extra, signed contracts for high-end flats — priced at $4 million or extra — fell 39% in September, based on Olshan Realty, following will increase in August and July. Brokers blame a speedy decline in stock and lack of latest provide from rental developments somewhat than a decline in demand or fears that Zohran Mamdani, a democratic socialist, would grow to be the subsequent mayor of New York Metropolis.
“There actually is a draw back threat to coverage,” Miller stated. “However as we have seen previously, these fears are often overblown.”
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