The fundamentals of the Manhattan residential real estate market remained solid for the third quarter of 2025, proving once again the undeniable allure and endurance of New York City real estate. And yes — I’ll admit it — I’m a shameless cheerleader for this city. In this quarter’s report, we’ll break down the latest numbers, highlight a few surprising neighborhood trends, and talk about what they mean for buyers and sellers heading into the final stretch of 2025.
Strongest Third Quarter in Three Years
This was Manhattan’s strongest third quarter for closings in three years. Closing volume rose 5% year over year, hitting a three-year high. Signed contracts, a leading indicator of future closings, increased for the sixth consecutive quarter — up 1%.
Sales under $3 million rose 2%, while transactions over $3 million jumped 20%. That’s a key distinction. Buyers under $3 million often rely on mortgages, whereas luxury buyers frequently pay cash or have access to more flexible financing options. Rising mortgage rates simply don’t slow them down the same way.
While signed contracts climbed annually, they fell 22% compared to last quarter. Some of that slowdown is seasonal, but it also reflects limited inventory and buyer fatigue.
Inventory: Up Overall, But Down Where It Matters
Overall, Manhattan inventory ticked up 1% this quarter. But dig deeper and you’ll see the real story: the number of larger apartments — three bedrooms or more — fell 8%. Meanwhile, new development launches declined 35%.
That shortage of larger homes and new projects will likely put upward pressure on condo prices in the coming quarters, especially in the luxury segment where supply is already tight.
First-time buyers and renters, whose leases often renew in spring, tend to pause their searches in the fall. Many of those buyers will re-enter the market in early 2026, particularly if mortgage rates ease.
Pricing: Condos Drive Post-Pandemic Highs
Market-wide prices rose again in Q3, led by strong activity in the condo and new development sectors. The median price reached $1.225 million, up 7% annually, while the median price per square foot hit $1,792 — a post-pandemic high.
Co-ops continue to offer excellent value, trading well below condo and new development price points on a per-square-foot basis. For more on why that gap exists — and what it means for your investment — see my related post Real Estate’s Wake Up Call.
If you’d like a quick, no-contact estimate of your own property’s current market value, visit my website and use our free home evaluation tool.
Looking Ahead to Q4: Holiday Slowdown and Election Buzz
As we enter the fourth quarter, the usual holiday slowdown is right around the corner. Some sellers prefer to withdraw their listings during the season — especially if they’re entertaining or traveling — but I often advise the opposite. Buyers who are still shopping during the holidays tend to be serious and motivated.
This year, New York City will elect a new mayor on November 4th, and global uncertainty remains part of the backdrop. But none of that appears likely to derail the city’s housing market. As I said at the start, the fundamentals remain strong.
Neighborhood Insights: The Upper East Side Is Having a Moment
Is the Upper East Side the new West Village? Judging by social media, you might think so. Fashion influencers, art professionals, and downtown transplants are flocking uptown for more sidewalk space and less chaos.
Prices on the Upper East Side rose 3% in Q3, driven by luxury demand, while active listings fell 3% — the lowest third-quarter inventory since 2016. Over the past two weeks, luxury contracts signed on the Upper East Side have even outpaced downtown.
If you’re trying to get a table at Chez Fifi, good luck — that’s how hot this submarket has become.
Upper West Side: New Development Surge
The Upper West Side saw a 4% rise in overall sales, powered by a 41% quarter-over-quarter surge in new development transactions. That jump temporarily boosted both the median price and price per square foot, though resale pricing has remained relatively steady.
New development continues to drive attention and demand — and there’s more to come as some new projects prepare to open their doors in 2026.
Midtown: Smaller Units and Smart Buys
Midtown recorded one of the quarter’s biggest gains in new development activity, up 80% quarter over quarter. Studios and three-bedroom units led the charge, signaling renewed interest from both pied-à-terre buyers and those looking to house multiple people in central locations.
Downtown: A Brief Dip, Not a Downturn
Downtown was the only submarket where the median price declined this quarter, largely due to fewer new development closings. But don’t mistake that for a slowdown in buzz.
The highly anticipated conversion of the iconic Flatiron Building into luxury condos — represented by Corcoran Sunshine — has re-energized the conversation around downtown living. It’s an architectural marvel and a perfect example of how New York reinvents itself while preserving its history.
The Financial District and Battery Park City also rebounded, driven by contracts at 125 Greenwich Street, many of which were signed before Q3 officially began.
Uptown Advantage: Value and Opportunity in Upper Manhattan
Let’s talk about my home turf — Upper Manhattan. This region continues to offer some of the best value in the borough. Closings were down 16% year over year, the slowest third quarter since 2009, but that softness was concentrated in the resale market.
Many Upper Manhattan owners purchased less than ten years ago and hold mortgages with rates around 2.5% to 3%. That “lock-in effect” discourages them from selling, which limits supply — but it also creates opportunity for today’s buyers.
The average price per square foot in Upper Manhattan is $955 — an 88% discount from the borough-wide average of $1,792. Most of these condos were built in the last decade and feature full-service amenities, parking, gyms, and outdoor space.
Despite what some headlines suggest, Central Harlem hasn’t lost its appeal. The slowdown in new condo construction stems from the expiration of the 421-a tax abatement in 2017, which was never renewed for condominiums. While recent legislation introduced a version of the incentive, it mostly benefits rental projects, leaving a gap in condo development — especially in Harlem, where there’s still room to build.
For buyers, that scarcity can translate to future upside.
Stability Amid the Noise
Even with political headlines, mayoral elections, and shifting global sentiment, New York City remains one of the world’s most stable and enduring real estate markets. Co-ops continue to deliver strong long-term value, and luxury new developments are once again capturing global attention — particularly on the Upper West Side and Downtown, where notable projects are launching.
If you’d like to discuss your buying or selling strategy, I’m always happy to help. Visit TheBolandTeamNYC.com or email me directly at [email protected] to schedule a confidential consultation.
This quarter’s YouTube video was filmed at Residence 19D, Claremont Hall, a stunning one-bedroom designed by Robert A.M. Stern Architects in historic Morningside Heights.
FAQ: Manhattan Real Estate Q3 2025
Q: Why are Manhattan prices still rising despite higher mortgage rates?
A: The luxury segment, which is less sensitive to rates, remains very active. Cash buyers and international investors continue to see New York as a safe, long-term asset. Limited supply — especially in larger apartments and new developments — adds upward pressure.
Q: Is now a good time to buy in Manhattan?
A: Yes, particularly if you’re buying for the long term. Inventory remains limited, but seasonal slowdowns often create opportunities to negotiate, especially in Q4.
Q: What neighborhoods offer the best value right now?
A: Upper Manhattan — including Harlem, Hamilton Heights, and Morningside Heights — continues to deliver the best price-per-square-foot value with strong amenities and growth potential.
Q: Should sellers keep their homes on the market during the holidays?
A: In many cases, yes. Buyers who remain active during the holidays tend to be serious, and reduced inventory means less competition.
Q: What’s next for 2026?
A: Expect a busy first quarter as sidelined buyers return once leases expire and as new developments debut across the Upper West Side and Downtown. Manhattan’s fundamentals remain strong — and its story, as always, continues to evolve.
For a full breakdown of market data, visit TheBolandTeamNYC.com. To explore buying or selling opportunities, email me at [email protected] or reach out directly through the site.
