If you followed the headlines in 2025, you might have expected Manhattan’s housing market to slow under the weight of political uncertainty, rate speculation, and constant noise. But the fourth quarter told a very different story. Manhattan didn’t pause—it pushed forward, closing out the year with its strongest fourth quarter in three years and reaffirming the durability of buyer demand heading into 2026.
As Pamela Liebman, President and CEO of Corcoran, observed, “while the conversation focused on headwinds, the market itself focused on results. Sales rose, pricing strengthened, and marketing times shortened. Contracts increased for the seventh consecutive quarter, marking the longest stretch of annual gains in more than 15 years—a clear signal that confidence has not only returned, but endured”.
Q4 2025 at a Glance
Closed sales in the fourth quarter rose 3% year-over-year to approximately 2,800 transactions, making it the strongest Q4 for Manhattan since 2022 and the fifth straight quarter of annual sales growth. Just as important, days on market declined by 8% to 108 days, confirming that deals are moving with greater velocity. This is not a market limping forward; it is one demonstrating results over rhetoric.
Inventory: Up Slightly — But Not Where Buyers Want It
Inventory, while technically higher, remains constrained in ways that matter. Total listings rose 4% year-over-year to just over 6,100 homes, marking a second consecutive quarter of annual gains. Even so, supply remains historically lean for a fourth quarter—and critically, the increase is coming almost entirely from resale properties. New development inventory has fallen to a near ten-year low, with new development listings introduced in Q4 running roughly 50% below the historical average. For buyers seeking larger or luxury homes, particularly downtown, this shift has quietly redirected demand toward the resale market.
Pricing: Influenced by What Sold, Not Across the Board
Pricing reflected this change in composition. The Manhattan median price rose 7% year-over-year to $1.18 million, while average price per square foot dipped slightly to $1,849. At first glance, that divergence can appear contradictory, but the explanation is straightforward. Sales above $3 million increased at triple the pace of the overall market, pushing the median higher, while the absence of last year’s ultra-luxury outliers—particularly along Billionaires’ Row—pulled down the average price per square foot. This was not a weakening of values, but a recalibration of what actually traded.
The $3 Million Divide Persists
This dynamic underscores a clear divide within the market which carried throughout 2025. Compared to last year, closings under $3 million declined by 9%, while sales above $3 million rose 14%. The sub-$3 million segment remains more sensitive to mortgage rates, which have stayed elevated, placing downward pressure on pricing and activity. Above that threshold, buyers tend to be better capitalized and more decisive, and that confidence has translated into stronger demand and tighter inventory. Supply in the $3–5 million range declined by 2%, while inventory above $5 million fell 7%. Meanwhile, resale condo inventory under $3 million rose 13%, while inventory above $3 million declined 4%, reinforcing where demand is most concentrated.
Bedroom Count: A Quiet Constraint
Bedroom mix added another layer of constraint. While studios, one-bedrooms, and two-bedrooms offered more choice, three-bedroom inventory declined by 2%—despite remaining one of the most sought-after segments. Buyers who need space and hesitated this year may find that waiting carries a cost, particularly as competition intensifies for limited supply. Many buyers have historically found three-bedroom homes and larger residences with modern layouts, finishes, and conveniences in new developments. With that pipeline now shrinking heading into 2026, options in this segment are becoming increasingly limited.
Co-ops vs. Condos
Property type also shifted. Resale co-ops increased their share of the market by 3%, while resale condos declined by the same margin. Many buyers appear to be prioritizing value, opting for co-ops over the convenience of condos. This trend was evident throughout last year as buyers focused on relative pricing. Because condos typically trade at higher prices and co-ops come with more constraints on ownership, this shift suggests a buyer mindset oriented toward longer-term ownership and calling New York City home.
Neighborhood Snapshot
At the neighborhood level, strength was uneven but telling. On the Upper East Side, the median price rose 14% to $1.4 million, driven in part by sales at 200 East 75th Street. The Upper West Side followed with a 12% increase to $1.288 million, influenced by sponsor closings at 50 West 66th Street and 111 West 57th Street. Inventory increased modestly on both sides of Central Park, offering buyers slightly more choice without undermining pricing.
Midtown remained remarkably steady, with little change in pricing or inventory over the past year. Downtown, however, told a different story. Dwindling inventory reduced condo and new development sales volume by 15%, even as resale co-ops posted strong annual gains. In the Financial District and Battery Park City, sales jumped 20%, fueled by a 50% increase in new development closings, though the area still recorded the longest days on market in Manhattan at 134 days—up 9% year-over-year.
Upper Manhattan faced the most pressure this quarter, with sales declining 10%, largely due to fewer new development closings. Excluding 2020, this marked the slowest fourth quarter for the area since 2009. Low inventory, combined with a buyer pool that is more mortgage-dependent, weighed on activity and pricing. That said, a persistent shortage of three-bedroom homes in the $2–3 million range in other parts of the city could set the stage for renewed demand in the neighborhood if supply does not improve.
What This Means Heading Into 2026
Taken together, Q4 2025 reinforced Manhattan’s resilience. Despite political uncertainty, a heated mayoral race, and ongoing rate conversations, buyers did not retreat—they adjusted. Seven consecutive quarters of contract growth, faster marketing times, and continued strength at the upper end of the market all point to a city operating with sustained momentum.
As we move into 2026, opportunity will be shaped less by broad market direction and more by positioning within specific segments. For buyers, selective inventory, uneven pricing across tiers, and a shrinking new development pipeline may create openings for those who are prepared to move decisively and evaluate opportunities at the micro-market level. For sellers, success will increasingly depend on understanding who the active buyer is in your segment—and how they are financing—so pricing, presentation, and timing align with real demand. Manhattan remains a market where confidence is earned through knowledge, not noise.
Written by Julia Boland, a 24+ year NYC Real Estate Advisor specializing in Manhattan condos, co-ops, and new development, with deep expertise in Harlem and Upper Manhattan.
Manhattan Real Estate Q4 2025 — Key Questions Answered
Is Manhattan real estate slowing heading into 2026?
No. Manhattan ended Q4 2025 with its strongest fourth quarter in three years, faster days on market, and seven consecutive quarters of contract growth. Demand remains durable, though activity varies by price point and property type.
Are Manhattan home prices rising or falling?
Pricing is uneven. The median price rose year-over-year due to increased sales above $3 million, while average price per square foot declined because there were fewer ultra-luxury closings. This reflects sales mix, not broad price declines.
Why is the $3 million price point so important in Manhattan?
The market above and below $3 million is behaving differently. Purchases under $3 million are more mortgage-rate sensitive, while buyers above $3 million tend to be better capitalized, resulting in stronger demand and tighter inventory in higher price tiers.
Is inventory increasing in Manhattan?
Inventory rose modestly year-over-year but remains historically low for a fourth quarter. Most new supply came from resales. New development inventory is near a ten-year low, particularly downtown.
Are co-ops or condos performing better?
Resale co-ops gained market share in Q4 2025, while resale condos declined slightly. Many buyers are prioritizing value and long-term ownership, making co-ops more attractive despite stricter ownership requirements.
What is happening with three-bedroom apartments?
Three-bedroom inventory declined despite strong demand. Fewer new development projects are coming to market, limiting supply of larger homes with modern layouts and amenities heading into 2026.
Are there opportunities for buyers in 2026?
Yes. Opportunities exist for buyers who are prepared, understand micro-markets, and can act decisively. Uneven pricing and selective inventory create opportunities at the neighborhood and building level rather than across the market as a whole.
What should Manhattan sellers focus on in 2026?
Sellers should identify the active buyer in their price segment and understand how that buyer is financing. Correct pricing, presentation, and timing are critical in a selective market.
Is now a good time to buy or sell in Manhattan?
There is no universal answer. Manhattan remains a segmented market where outcomes depend on price point, property type, location, and financing. Strategy and local insight matter more than headlines.
