Name: Why Manhattan Condos Are Selling At A Loss
Uploaded: 2026-03-22T17:43:22.000Z
Duration: 7 min 46 s
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Past simple

Over the past year, one in three condo owners in Manhattan who sold, sold at a loss.

Modal verbs - A2

Now, with the election of Mamdani, there are reports that the wealthy could flee even more, going to the suburbs or places like Florida or Texas.

Gerund

But the real reason why Manhattan real estate has been flat over the past decade and what the wealthy are really doing is a bit more nuanced.

you're reading about $100 million transactions, but those are largely detached from everyday New Yorkers.

Condominiums have often been looked at as a way for overseas investors to park money.

The individual ROI you get on an investment unit is trivial, to be perfectly honest.

I mean, hello, if we pan out and look at the Manhattan Market over 10, 20 years, what's happened with prices over that time?

Especially when you compare it to some of the hotter markets?

Yeah, I think Manhattan has pretty much been flat.

I don't think that people have, like, cashed in, sold their apartments and made money.

Investors track prices per square foot to compare properties.

In 2015, one square foot of space cost over $1500 in Manhattan.

By 2025, prices had fallen to around 1100 per square foot, according to Redfin data.

That's still quite high compared to the rest of the country.

it's got a beautiful outdoor space and the maintenance here.

I mean, you'll probably make a little bit of money, possibly depending on what you buy.

I mean, they want to buy something that maintains its value, and

hopefully when they sell it, they can make a little bit of money.

Today, 72% of condos sold in Manhattan are selling under list price.

There's only so much of a demand pool that exists out there for these properties.

Now, if you go look at these tall skyscrapers, where's your demographic there?

You've had a significant decline over the years in foreign capital coming in.

It's still coming in, but not in the droves that it was, you know, back in the day.

You know, most people care about mortgage rates.

They have to get a mortgage to buy their home.

We're fortunate in that a lot of people are able to buy their homes with cash.

And that's why the market didn't decline as much as the rest of the country.

Since the fed pivot in 2022, pushing rates higher.

What we are seeing is a tremendous amount of affluent buyers coming into New York City.

And the affluent aren't relying on interest rates, they're relying on cash.

Most Manhattan condos are purchased all cash.

It shows you that we are in such a discretionary market.

They say if you leave New York City, you have to live in America.

And I think that's true because this is a different environment.

Buyers who need a mortgage to purchase in Manhattan are looking at rates over 6%.

This leaves many of them waiting on the sidelines.

I would equate the last three years of low activity solely due to interest rates.

Most consumers who rely upon, you know, obtaining financing acquire a home were priced out of the market because the price appreciation, along with the record level debt service just made it completely cost prohibitive for them.

And that's actually why rents went up so much, because people couldn't afford to buy.

The losses in Manhattan condos may be one reason that even the wealthy are choosing to rent.

First time home buyers today, the average age is 40 years old.

That's, you know, it's heinous that that's what we've come to.

The buying side, I'm seeing more of that people in their early 30s and they're getting a little bit of help from their parents as well.

Condo buyers pay transaction costs, maintenance fees and property taxes, all of which eat into returns.

So in New York City, our closing costs are tremendously high.

And part of that is to disincentivize flipping of properties.

You have brokerage commission between 5 to 6% and you pay New York City transfer tax of 1.425%.

And a lot of buildings have exit fees as well.

You know, you're talking north of 10% and that's before you get to paying any gains taxes.

So you have to make a decent return in order to even just cover the exit fees, you know, from a return on investment.

I think there's probably more upside over the next 10 years than the last 10 years.

With elevated interest rates, we're going to see a lower level of production of condominiums, especially luxury condominiums, which is going to make them more expensive New York is more dependent than ever on the very wealthy.

The top 1% of earners pay more than 40% of all income taxes.

The average sale price for Manhattan real estate is nearly $2 million.

Most condos sold sell for over $1.5 million.

Tell us about who those luxury buyers are.

New, you know, there are New Yorkers who are going from uptown to downtown, empty nesters, some of that.

Younger families moving from places from California to New York, a little bit of that, not so much international.

The luxury market has done so well this year and I think people made a lot of money.

Wall street calls it the K shaped economy.

Lower income Americans are cutting back while while the wealthy are doing most of the spending.

I'm shocked by the level of luxury buying and commitment to the city.

We were hearing about this seismic shift post Mamdani, and that didn't happen.

New York City Mayor elect Mamdani promises to tax the rich and freeze the rent.

You're looking at three to four years of zero rent increases for rent stabilized tenants.

There's about a million two rental units that are open market.

And so what that's going to cause landlords to do is push expenses on the buildings they control as an entity, push rents higher for open market tenants.

19% of New Yorkers plan to leave the city over the next five years.

The top factors, housing affordability, crime and safety, living space, taxes, amenities and job opportunities.

That said, 55% of New Yorkers polled before the election plan to stay.

So I think people buy things depending on their situation.

Has somebody pass away and then they decide what they're going to do.

And that's really real estate in a nutshell.

People don't go, mmm, it's a good time, let me invest my money.