Manhattan Q2 Market Holds Steady, Thanks to Luxury

Despite a rocky start to the second quarter—fueled by new tariffs, rising mortgage rates, and escalating tensions in the Middle East—Manhattan’s residential real estate market managed to hold its ground, thanks largely to the strength of the luxury sector.

In her letter accompanying the newly released Q2 2025 Manhattan Market Report, Brown Harris Stevens CEO Bess Freedman notes, “Even with the rising level of uncertainty, the Manhattan apartment market had a decent second quarter as both prices and sales ticked up slightly compared to a year ago.”

The average apartment price rose to $2,157,641, and overall sales increased by 1% year-over-year. But the real headline this quarter was the performance of the luxury and new development markets. Many of the closings stemmed from contracts signed back in January—well before market volatility took hold—highlighting the long lead times and resilience of high-end transactions.

Cash deals dominated, accounting for a record 65.2% of all co-op and condo sales. With mortgage rates continuing to climb, wealthy buyers are increasingly relying on liquidity to bypass borrowing altogether. In doing so, they are essentially “propping up” the Manhattan market during an otherwise uncertain period. The new development sector benefited especially from this trend, with median prices rising more than 11% from the previous quarter.

Jonathan Miller, CEO of Miller Samuel Inc., observed that most buyers who did finance their purchases included mortgage contingencies—an indication that the market is moving at a slower pace. “In a tight market that doesn’t exist,” he explained, describing the second quarter as “highly polarized.” He added that “the market is getting wider in terms of behavior. Cash buyers are less dependent on mortgage rates, so rates being stuck doesn’t seem to be a big issue.”

What we’re seeing is that strong financial market performance is fueling all-cash purchases, while high borrowing costs are holding back buyers who depend on financing.

On a broader level, CNBC’s Diana Olick recently reported a rise in mortgage delinquencies—even among borrowers with strong credit scores. While still at historically low levels, it’s a trend worth watching as it could signal growing financial pressure nationwide.

It remains to be seen how the rest of the summer unfolds and what impact continued market anxieties will have on the real estate landscape. If you have questions about the Q2 2025 Manhattan Apartment Market Report—or about your own real estate goals—I’m always happy to connect.