Data Confirms: No “Mamdani effect” on NYC Luxury Market

When New York’s luxury market continued to swell in the wake of Zohran Mamdani’s election in November, there were questions floating around about what was driving all those expensive deals.

Was it the wealthy doubling down on the financial and nightlife capital of the country? Or was it anxiety-ridden rich folks selling their homes at a discount to flee the city?

Based on data from real estate analytics firm UrbanDigs, it appears to be a surge of buyers casting bids of confidence in the market.

In the luxury market, defined as homes asking at least $4 million, contracts rose over 24 percent in the 60 days after Mamdani’s election compared to the 60 days before. The median listing discount fell to 6 percent from 6.5 percent in that same period.

“How much power buyers have, it’s best measured in discount,” said UrbanDigs co-founder John Walkup. If sellers are rushing to get out of Dodge or desperate for a deal, you would expect to see drastic price cuts to homes on the market.

“We just didn’t see it,” Walkup said.

Instead, what he witnessed was typical seasonality, where listings and contract activity all pick up in tandem with an increased buyer pool. Walkup said any effect from the mayoral election would have shown supply remaining elevated after the November election as sellers have a harder time moving their homes. But supply fell by over 3 percent in the 60 days after the election.

Compass’ Vickey Barron said that the luxury market’s resilience is a testament to the intangible qualities of owning property in the city. “They want an address in New York City, and if they didn’t want it, they wouldn’t buy it, because they have many options,” Barron said of luxury buyers.

A recent slew of record-setting deals has buttressed sellers from buyers trying to negotiate their way into a deal through current events.

In December, an unknown buyer signed a $129 million contract for a set of condos at 80 Clarkson Street, a new development project from Atlas Capital Group and Zeckendorf Development, which would set a record for the most expensive sale downtown. Nahla Capital and Legion Investment Group’s new development at 1122 Madison Avenue found a buyer for its penthouse, asking $90 million. “It only takes a few people to step in and sign contracts at these high numbers” for buyers to lose some of their perceived leverage, said Barron.

Elections in and of themselves have rarely had a tangible impact on the market, past research has shown. But policy changes, particularly those involving taxes, are a different story.

Last month, Mamdani put forward the possibility of a 9.5 percent blanket property tax increase or a tax hike on the wealthy to help cover some of the city’s multibillion-dollar budget deficit. Even if those politically precarious proposals fall through — the mayor’s office has already backtracked on the size of the budget deficit — Mamdani has also been a staunch advocate of reforming the city’s property tax code in an effort to shift tax burdens from multifamily properties to single-family homes and luxury condos and co-ops.

“A nine-and-a-half percent increase is massive,” said Douglas Elliman’s Frances Katzen of the latest tax proposal. “If you’re earning at a certain level, that’s a big hit. You’re going to have an exodus.”

Walkup pointed to the mansion and transfer taxes in the city that went into effect on July 1, 2019. “An amazing amount of transactions pulled forward to take advantage of that tax break,” he said. Similarly, a $10,000 cap on the federal deduction for state and local taxes was blamed for slow sales in luxury markets like the Hamptons in 2019.

“Once you have a real policy with a real timeline, and you can actually calculate hard and fast on the paper what it means, people will change their behavior,” Walkup said. “But until then, it’s just sort of, it’s been business as usual in the real estate market.”