Buyers searching for luxury homes in Manhattan are short on options.
Listings for high-end condos and co-ops fell 27 percent annually in the first quarter, hitting the lowest level in nearly two decades, according to a report by appraiser Jonathan Miller, backed by data from StreetMatrix.
Inventory in the luxury sector — defined in the report as the top 10 percent of the market — sharply declined late in the first quarter, beginning when the U.S. entered its war with Iran. Miller said listing levels, in small part, were likely also affected by a flurry of activity at the end of last year and early this year.
“It’s a combination of a robust high-end market in 2025 and product is being sold out,” said Miller. “But I also think the weight of uncertainty caused luxury market sellers to take a breath until they get their arms around what’s happening.”
Listings also declined across the market overall, with the number of available co-ops and condos falling 17 percent year-over-year, while the supply of townhouses dropped more than 33 percent to its lowest level in four years.
He added that he expects inventory at the upper end of the market to rebound, but the lower end will be bogged down by factors like the war’s effect on mortgage rates.
The decline of mortgage rates in recent months sparked a burst of condo and co-op deals at the “lower end of the upper half,” Miller said. Condo and co-op deals between $3 million and $4 million — a price tranche that is typically more reliant on financing compared to higher-priced segments — rose 40 percent last quarter compared to the same period last year.
But deals of that caliber likely won’t be as robust in the second quarter, as mortgage rates have been on the rise since the war broke out at the end of February. Before then, the average rate for a 30-year fixed mortgage was trending below 6 percent, compared to roughly 6.6 percent at the time of publication.
“I suspect that’s going to take a lot of wind out of the sails of the spring market,” Miller said.
Between January and March, co-op and condo sales rose modestly in Manhattan, as prices also edged higher. The number of transactions increased 3 percent year-over-year, while the median sale price rose more than 5 percent to $1.2 million. For luxury apartments, the number of sales increased 3 percent, while the median sale price remained at $6.9 million.
Deals for one- to three-family homes in the borough declined 9 percent in the first quarter, while the median sale prices for the property type skyrocketed 69 percent annually to $6.5 million.
Miller attributed the uptick to the size of the townhouses that sold during the period, which had an average square footage of roughly 5,500 — compared to the decade average of 4,400 square feet.
The price jump “had a lot more to do with the product mix than price appreciation,” Miller said.
Manhattan’s sparse pipeline of new residential buildings continues to squeeze the borough’s stream of new development deals. Closed transactions in the sector dropped 28 percent last quarter compared to the same period last year, while the median sale price dipped roughly 17 percent to just under $2 million.
Listings for new development condos and co-ops also fell sharply, down 37 percent year-over-year.
“New development is tightening because less product is coming in,” Miller said. “The pipeline is constrained.”