Manhattan Co-op and Condo Sales Getting "Back to Normal"

Luxury co-op and condo sales in Manhattan rose nearly 30% in the first quarter compared to the same period last year, while the average sale price of a luxury home grew 37% year-over-year to $10.3 million — the highest quarterly average on record, according to new report from Douglas Elliman.

"Although sales surged by 28.8% annually to 2,560, they only surpassed the decade average for the first quarter by 1.1%," writes report author Jonathan Miller, an appraiser with Miller Samuel. This has led him to reiterate his earlier prediction that 2025 will be "The Year of Getting Back to Normal."

And the first-quarter sales compared to a year ago must be seen in perspective. "Early last year," Miller writes, "consumers paused as market participants anticipated a sharp drop in mortgage rates, which did not occur."

Buyers with mortgages are apparently becoming more comfortable with interest rates that are hovering around 6%. "Even though Manhattan was a 58% cash market in the first quarter of 2025, the growth of financed sales was double that of cash," Miller writes in his newsletter, Housing Notes. Cash buyers, on the other hand, appear to have been driven by a fear of the Trump administration's looming tariffs and the damage they would inflict on stock markets. Those fears became reality this week when Trump unrolled his tariffs — and markets promptly tanked.

"The S&P 500 tumbled more than 4%, a huge daily drop for the index, echoing sharp declines in Asia and Europe as investors balked at the tariffs," The New York Times reports. "China vowed to take countermeasures to 'safeguard its own rights and interests.' Its state media described the tariffs as 'self-defeating bullying.'"

It wasn't only the luxury market — the top 10% — that saw an increase in activity during the first quarter. Co-op and condo listings across the borough of Manhattan increased roughly 8% year-over-year, up from 6,900 to 7,400. Transactions and sale prices also ticked upwards last quarter, though Miller cautioned that the scale of the increases is “somewhat exaggerated” because the first quarter of 2024 was “unusually weak.”

It's not only prices that are rising. The monthly cost of living in co-ops and condos continues to set new records. "The average monthly maintenance for a co-op sale was $2,974, representing an 8.8% annual increase to $2.51 per square foot per month," the report states. "The average monthly common charge plus real estate tax for a condo reached its second consecutive record, rising by 16.3% annually to $4,802, or $3.28 per square foot per month."

In the end, the first-quarter sales "surge" merely brought the market back to where it began. As Miller concludes: "The moment finally arrived after three long years for the Manhattan housing market to get back to zero sales-wise. Cash is still a key driver of sales, but financed purchases have grown at a much higher rate."

If interest rates come down, as expected, financed purchases might grow at an even higher rate.