{"id":166356,"date":"2026-03-17T16:53:44","date_gmt":"2026-03-17T16:53:44","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/166356\/"},"modified":"2026-03-17T16:53:44","modified_gmt":"2026-03-17T16:53:44","slug":"challenges-ahead-for-manhattans-red-hot-condo-market-commercial-observer","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/166356\/","title":{"rendered":"Challenges Ahead for Manhattan\u2019s Red-Hot Condo Market \u2013 Commercial Observer"},"content":{"rendered":"

In March 2025, Peter Zaitzeff, a licensed real estate broker and the director of new development sales at SERHANT<\/a>, sold a spread at Manhattan\u2019s 150 Charles Street<\/a> for $60 million, the highest price ever for a downtown condominium.\u00a0<\/p>\n

But, while the sale surpassed a milestone that had stood for seven years, Zaitzeff\u2019s mark was eclipsed by year\u2019s end, with an $87.5 million sale at 140 Jane Street<\/a> in August. (A $129 million sale<\/a> at the condo building at 80 Clarkson Street followed in December, but that was for multiple units.)<\/p>\n

SEE ALSO: Retail Units at Once-Controversial 126 Waverly Place Sell for $23M<\/a><\/p>\n

\u201cIt speaks to the amount of confidence buyers have, especially after my sale,\u201d said Zaitzeff. \u201cPeople are like, \u2018You know what? $10,000 a square foot is not crazy.\u2019 It gave people [permission], like, \u2018I can spend $10,000 a foot because somebody else did.\u2019 Once you break those records, it gives greater confidence to people who can afford that number.\u201d<\/p>\n

If you\u2019re wondering about the current strength of Manhattan condo sales toward the top of the market, rest assured that it\u2019s going gangbusters.<\/p>\n

\u201cI don\u2019t think we\u2019ve seen a stronger eight, 10, 12 months previously. I started in the business around 2011, and I haven\u2019t seen a stronger, more healthy market. We\u2019re seeing 25, 30, 35 contracts above $4 million per week for the last six months,\u201d said Zaitzeff, referring to figures from the Olshan Luxury Market Report<\/a>, which tracks residential sales in Manhattan over $4 million.<\/p>\n

By most accounts, 2025 was a strong year for condo sales in Manhattan overall, assisted toward the end by the Federal Reserve\u2019s three interest rate cuts.\u00a0<\/p>\n

A Brown Harris Stevens report<\/a> said that in 2025, \u201csales climbed to their highest level since 2022\u201d in Manhattan\u2019s residential real estate market overall, in part due to New York City\u2019s economy \u201coutperforming the nation over the past two years \u2014 and expected to do so again in 2026.\u201d<\/p>\n

The company noted that<\/a> the median sales price for condominiums in the borough \u2014 reflecting prices in the middle of the data set \u2014 rose from $1.65 million in the fourth quarter of 2024 to $1.69 million a year later. Average condo prices \u2014 calculated to include the extreme highs and lows \u2014 rose accordingly, from $2,994,708 to $3,046,461.<\/p>\n

Wei Min Tan, associate real estate broker at R New York, noted that the three interest rate cuts in 2025 gave a boost to the lower end of the market by helping reduce mortgage costs.<\/p>\n

\u201cRates going down was going to help the more entry-level buyers and those at lower price points \u2014 let\u2019s say $3 million and below,\u201d said Tan.<\/p>\n

To that end, Jonathan Miller, president and CEO of appraiser Miller Samuel<\/a>, noted that while there was growth in Manhattan condo sales in 2025, co-op sales, at considerably lower average and median price ranges, jumped by twice as much.<\/p>\n

\u201cCondo sales rose year-over-year 3.4 percent, and co-ops rose 7 percent,\u201d said Miller. \u201cThe reason for the difference is that the median price of co-ops is $825,000, and the median price of condos in Manhattan is $1,661,000, so they\u2019re effectively double.\u201d<\/p>\n

Miller said, then, that the decline in interest rates by year\u2019s end gave co-op buyers a boost.<\/p>\n

\u201cBecause of their lower price point, co-ops tend to reflect a buyer pool that is more reliant on mortgage rates,\u201d said Miller. \u201cWhereas condo buyers tend to have a higher share of cash buyers.\u201d<\/p>\n

Reflecting the differential, cash buyers represented 57 percent of the co-op market, but 74.4 percent of the condo market, Miller said.\u00a0<\/p>\n

On the condo side, those cash buyers were spending an awful lot of it. As much as lower rates assisted buyers on the lower end, the higher end has seen far more frantic activity.\u00a0<\/p>\n

\u201cSome of the downward movement in mortgage rates is definitely getting people who had been playing a wait-and-see game to come back into the market,\u201d said Ryan Schleis, senior vice president of research and analytics for the Corcoran Group and Corcoran Sunshine Marketing Group<\/a>. \u201cWe\u2019re really seeing a lot of strength at the high end. Deals over $5 million have been super strong, and tight supply is influencing the market a lot. When something new comes to market that people are excited about, a great product that\u2019s priced well, they\u2019re selling really fast.\u201d<\/p>\n

By way of example, Schleis mentioned 1122 Madison Avenue, a condominium building still under construction where the duplex penthouse \u2014 with 9,350 square feet of indoor space and 1,982 square feet of outdoor space, including a rooftop terrace with Central Park views \u2014 sold in late February 2026 for $89.5 million, the highest overall price and price per square foot ever for a condominium in the Upper East Side, according to developers Legion Investment Group and Nahla Capital.\u00a0<\/p>\n

The Wall Street Journal, which also cited 1122 Madison as the highest residential price achieved so far in 2026, noted in late February<\/a> that \u201csince sales launched in January, 18 of the building\u2019s 26 units have gone into contract,\u201d and that the developers had raised prices four times.<\/p>\n

Corcoran Sunshine has the exclusive listing on the building.<\/p>\n

\u201cWe just put a few more apartments in contract there, and I think we\u2019re down to just two left,\u201d Schleis said of the building, which isn\u2019t expected to be completed and occupied until fall 2027. \u201cIt\u2019s really tapped into this trend of very tight supply at some of the most prime, in-demand locations. When you finally get new product, people are really coming out of the woodwork.\u201d<\/p>\n

Zaitzeff noted that 1122 Madison Avenue \u2014 which the developers have said sold for an average of more than $5,400 per square foot for the first 18 units \u2014\u00a0 is not the only exciting new development property to attract never-before-seen prices.<\/p>\n

\u201cWhen A-plus inventory is on the market, those things sell quite quickly,\u201d said Zaitzeff. \u201cLook at 80 Clarkson, the newest building downtown. They just reported that they\u2019ve hit $1 billion in sales. They still have more to do, because the total sellout is $3 billion. But they\u2019re achieving between $7,000 and $10,000 per square foot. These are numbers we never saw before below 34th Street.\u201d\u00a0<\/p>\n

But if the high end of the new development condo market is brimming with good news several months into 2026, a broader consideration of condo sales performance over the past several months shows a different, more complex and potentially depressing picture due to several external factors, including one that could carry over throughout the year and maybe beyond.\u00a0<\/p>\n

Gregory Heym, executive vice president and chief economist at Brown Harris Stevens<\/a> Residential Sales, said he believes the brutally cold New York City winter has dampened the market over the past few months.<\/p>\n

\u201cContracts have been a little depressed, and I think the weather\u2019s had a lot to do with that, as it has with so many other parts of the economy,\u201d said Heym.<\/p>\n

But, if the weather has been a minor obstacle for condo sales, the market faces more extreme potential threats due to the war in Iran.<\/p>\n

While it\u2019s impossible to know how long the war will last \u2014 and therefore how badly it could affect various aspects of the economy, especially energy costs \u2014 Miller said he believes the war is already depressing buying activity, and could have more dire effects down the road if the conflict continues for a significant length of time.<\/p>\n

\u201cThere has been a pause, or a pullback, in contract activity because of the Iran war in the neighborhood of what appears to be about 5 to 7 percent,\u201d said Miller. \u201cThis is distorting our understanding of what 2026 is going to look like compared to the same period last year.\u201d<\/p>\n

Part of this, said Miller, is that the sudden instability of oil prices leaves the 30-year mortgage rate \u201csort of stuck\u201d above 6 percent. This is a problem not only on the sales front, but for inventory as well.<\/p>\n

\u201cI think higher interest rates are going to continue to reduce the inflow of new development into the housing market,\u201d said Miller. \u201cAnd I think what we may see when the dust settles on 2026 is more price growth in new development than resales.\u201d<\/p>\n

Schleis said Corcoran Sunshine has been seeing \u201cvery solid, average levels of activity week in and week out.\u201d But he also said the firm has been seeing a decrease in international buyers in New York City for around six months, one that is not being helped by the recent military conflict.<\/p>\n

\u201cIn general, it\u2019s due to global events and general immigration policy in the U.S. \u2014 people being a bit more concerned about the ease of their travel back and forth between here and wherever they\u2019re from,\u201d said Schleis. \u201cHistorically, this number varies depending on what\u2019s for sale and what is happening in the world, but we might see 20 to 30 percent of new development buyers being international. As of late, that number\u2019s been under 10 percent.\u201d<\/p>\n

On the other side of the buying equation, any temporary reduction in the size of the buyer pool won\u2019t be nearly enough to mitigate the coming supply shortage when it comes to New York City condos, as inventory is projected to shrink rapidly.\u00a0\u00a0\u00a0\u00a0<\/p>\n

Zaitzeff said he believes this partly explains the strong recent sales at the upper end of the market, as people seek to buy while there is still enough inventory to give them a variety of options.<\/p>\n

\u201cWe\u2019ve seen a lot of the smarter money buy right now because they know that in a year or two we\u2019re going to have virtually no inventory,\u201d said Zaitzeff.<\/p>\n

The problem has been masked, said Schleis, by the fact that certain desirable new development buildings still have a number of unsold units. This is misleading, he said.<\/p>\n

\u201cA huge proportion of what is unsold in new development is contained in just a handful of buildings,\u201d said Schleis. \u201cThe last time we ran these numbers, around a third of the unsold new development in Manhattan was in only six buildings, out of the 100 new development buildings that have some unsold inventory in the entire borough. So a lot of the inventory is concentrated. If you take that out, we\u2019re already in an extremely tight inventory condition, and that\u2019s why some of these new buildings are selling really, really quickly.\u201d<\/p>\n

Corcoran Sunshine believes that the supply versus demand imbalance will soon be impossible to ignore.<\/p>\n

\u201cWe\u2019re predicting that there are about 500 fewer units projected to enter the market than what we typically sell,\u201d said Schleis. \u201cSo every year, over the next few years, you\u2019re likely to see the new development inventory \u2014 which stands at about 3,000 unsold apartments, roughly speaking, in Manhattan \u2014 decline by 500 units. That\u2019s going to get really tight, and we\u2019re going to quickly be back to the ultra-low inventory we last had around 2013.\u201d<\/p>\n

Zaitzeff said he believes the government needs to take supportive action to get developers building again. That includes New York State lawmakers resurrecting something akin to the 421a development tax incentive that expired in 2022.<\/p>\n

\u201cYou\u2019ve got to have some tax incentives and deregulation for developers to build again,\u201d said Zaitzeff. \u201cAll the construction lending dried up after COVID and the 421a tax abatements went out, so developers are not incentivized to build anymore. By the end of 2027 there\u2019s going to be nothing available in new development inventory. Resale prices will go through the roof.\u201d<\/p>\n

And, given the uncertainty surrounding the war, Miller foresees a near future in which the collapse in supply creates \u201ca shock to the condo development market, where pricing is going to be much higher.\u201d<\/p>\n

\u201cI remember talking to a top-level executive at a national lender,\u201d said Miller. \u201cI asked, \u2018How do you think about inflation and mortgage rates \u2014 how do you anticipate?\u2019 And the answer was, \u2018It\u2019s all about energy prices.\u2019 What\u2019s going on in the Strait of Hormuz and in the Middle East is the specter overlying the potential for new development volume to increase over the next couple of years. And the coming downturn over the next two years is going to create a price premium that\u2019s going to become distorted because of the spike in interest rates.\u201d<\/p>\n

Asked how high he believes prices can go, Miller notes that the median price for new development condos is currently around $2.5 million, and said he wouldn\u2019t be surprised if \u201cin a year it could exceed the $3 million threshold and beyond.\u201d<\/p>\n

For now, though, brokerages are working hard to sell the inventory that is there, and brokers see rich potential for high-priced sales in the immediate future before having to worry about the supply shortage to come.<\/p>\n

\u201cWe\u2019re entering into our peak selling season of March, April and May, and we\u2019re getting great traffic on our sites,\u201d said Schleis. \u201cBrokers I talk to are feeling very positive. They\u2019ve got buyers. So I think it\u2019s going to be a strong spring.\u201d<\/p>\n

Larry Getlen can be reached at lgetlen@commercialobserver.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"In March 2025, Peter Zaitzeff, a licensed real estate broker and the director of new development sales at…\n","protected":false},"author":2,"featured_media":166357,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[68215,68216,68217,68218,68219,33276,75,84,83,9,24,63,36486,38068],"class_list":["post-166356","post","type-post","status-publish","format-standard","has-post-thumbnail","category-manhattan","tag-1122-madison-avenue","tag-140-jane-street","tag-150-charles-street","tag-80-clarkson-street","tag-gregory-heym","tag-jonathan-miller","tag-manhattan","tag-manhattan-headlines","tag-manhattan-news","tag-new-york","tag-new-york-city","tag-nyc","tag-peter-zaitzeff","tag-ryan-schleis"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/166356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=166356"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/166356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/166357"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=166356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=166356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=166356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}