By Serj Markarian, Licensed Associate Real Estate Broker
The newly released Q1 2025 Manhattan Apartment Market Report reveals a sharp 29% year-over-year increase in apartment sales, with the total dollar volume soaring to $5.7 billion—up 56% from the same period in 2024. This dramatic growth was fueled largely by the luxury sector, as high-net-worth individuals turned to real estate as a safe investment amid market uncertainty. Several key factors contributed to this surge:
- Falling mortgage rates: Between May and October 2024, mortgage rates dropped by just over 1%, drawing many buyers back into the market.
- Weak prior-year comparison: Closings in Q1 2024 were the lowest for any first quarter since 2009, making this year's gains appear even more substantial.
- Strong financial markets: The S&P 500 rose 23% in 2024, while the Nasdaq jumped nearly 30%. Combined with a record $47.5 billion in Wall Street bonuses, these gains helped propel luxury sales significantly higher.
- Return of affluent buyers: Back-to-office mandates from major banks and companies are drawing high-earning buyers back to the city more permanently. Those wealthy buyers who relocated during the pandemic but are now returning, contributing to the boost in sales activity.
Since ultra-wealthy buyers often purchase in cash and are less affected by interest rates, they remained active in the market. Overall, 58% of all Q1 sales were all-cash transactions—with that number rising to 90% for apartments priced over $3 million. Luxury sales saw particularly strong growth:
- Sales of apartments over $5 million rose 21%
- Sales over $10 million climbed 63%
- Sales over $20 million surged by 150%
It’s important to note, however, that these gains don’t necessarily reflect rising values across the board. The report only includes apartments that sold, and the mix of sales can significantly influence the data. A spike in high-end closings—like the one seen this quarter—can push up average prices and make the overall market appear stronger than it may actually be.
Not all segments of the market performed equally well. The mid-market—properties priced between $1 million and $3 million—was the weakest, with signed contracts down 10% year over year. Still, the overall outlook remains positive. Signed contracts in March were up across the board, and for apartments priced over $10 million, they more than tripled—an encouraging sign for what’s ahead in the remaining quarters of 2025.
As noted last week, Brown Harris Stevens CEO Bess Freedman remains optimistic about Manhattan’s housing market. Corcoran CEO Pamela Liebman echoed that sentiment, stating, “Manhattan’s market is not just holding steady — it’s thriving.”
If you have any questions about the Q1 report or would like to talk through your real estate goals and how these trends may impact your decisions, I’d be happy to connect.
