New York City’s Luxury Real Estate Market in Flux

New York City’s luxury residential real estate market has everything: the country’s most expensive listing, stunning penthouses, condos rich with amenities, vintage brownstones, contemporary townhomes and chicly updated pieds-a-terre. What it doesn’t have now is certainty. Sales cooled off in the summer (as they always do seasonally) and real estate pros are anticipating an uncertain fall due to rising interest rates and inflation, coupled with recession fears.

Despite prevailing macro-economic conditions, prime Manhattan and Brooklyn real estate remains a portfolio must-have for industry talent and power players, while up-and-comers and below-the-line buyers venture further out to red-hot Brooklyn neighborhoods like Bushwick and Bay Ridge, and outer Queens (not Staten Island just yet). 

Predicting where the market will go next is difficult. Caution abounds. “It’s safe to say, whichever way the market heads, it won’t be nearly as dramatic as it has been or as dramatic as other markets,” says Sotheby’s International Realty’s Jeremy Stein of the Stein Group. He sees the market as being in neutral territory, and unlike 2021 and early 2022, neither buyers nor sellers are favored. This comes after a 16-month run that ended in May, where “the volume of sales was historic and epic,” says Stein. Blue- chip upscale properties still draw interest: His firm is representing a 5,919- square-foot penthouse in SoHo’s iconic Romanesque-Revival style Puck Building; the five-bedroom, five-and-a-half bath penthouse with more than 2,000 square feet of outdoor terraces is listed for $35 million.

“2021 was the greatest year in history of New York City real estate,” says Pamela Liebman, president and CEO of Corcoran, and not a year to benchmark for comparison, she contends (Liebman is a featured realtor in Netflix’s reality skein “Buy My House”). She points out that the city is still above 2019 sales numbers, even though climbing mortgage rates are already impacting sales. Liebman has seen an increase in interest-only loans while the luxury segment historically favors all-cash buys. “There are still bidding wars where there’s a scarcity of that type of property,” she finds, and no bargains when it comes to chasing the dream New York apartment. However, bidding wars are not the norm across the board: only 15% of deals in August closed above list price, says Liebman.

“I think people are looking — if they find what they really want, they are buying it. If there’s a lot of inventory in a certain price range, they’ll want a deal,” Liebman adds.

Buyers, she contends, can be bold; smart buyers will utilize their power right now.

She finds that talent is still considering buying in downtown Manhattan, preferably in “a sexy new development.” Penthouses continue to interest Los Angeles buyers who seek out the all-encompassing views and space for entertaining.

“Entertainment executive-types are attracted to top-of-the-line, midtown condos,” she says. Corcoran reps a triplex penthouse on three floors overlooking Central Park at 111 W. 57^th. The 7,130-square-foot residence is listed for $66 million in a boutique-sized, 60-unit building that checks all the boxes: full service, plenty of amenities, privacy, views and security. Condos also hold more appeal to celebrities and other high-net- worth individuals over co-op buildings, as financial statements are not required and there are fewer rules about renting, Liebman explains.

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