How Is the Luxury Market for Homes Performing in NYC?

The Weekly Recap

Good morning and happy Friday! Mortgage rates fell below 7% this week after five consecutive increases, Donald Trump was inaugurated again, speaking of Trump and interest rates- Trump demanded that interest rates come down, there is an LA exodus to NYC taking place, single women and rich millennials will control the luxury real estate market in 2025, TikTok is back for the time being, Jamie Dimon has been dropping the hammer at Davos and if you’ve ever wanted to rent a house with a 25ft shark sticking out of the roof now’s your chance.

If you missed last weeks newsletter What Does the NYC Rental Market Look Like, you can read that through the link.

How is the Luxury Market For Homes Performing in NYC?

New York City's luxury real estate market is experiencing significant growth and transformation led by a blend of economic recovery, evolving buyer preferences, and an influx of innovative development projects. The luxury markets resilience and adaptability have been key to its continued success, especially in the face of challenges such as increasing mortgage rates and shifting global dynamics. Several trends are shaping this important segment of the market.

Increased sales activity in the luxury housing market in Manhattan has seen an aggressive uptick with sales of properties priced at or above $20 million rising by almost 60% by the end of last year. This is indicative of the city’s everlasting appeal and the movement of ‘smart money’ in the space regardless of the rate of environment. Luxury properties have also performed very well in the resale space with an average sales price of $6.53m which makes a 6.5% increase from 2023 while sales on properties over $5m are up 12.5% since 2023. The upward trend shows the persistent strong demand in the high-end market.

There are several factors that are driving this growth which is also helping to keep prices high. Economic stability headlined by a strong economy and stock market have increased buyer buyer confidence which has encouraged investments in high-end properties. NYC is known for three things that other markets do not have. It’s known for its high track record of appreciation, its a flight to quality and its a safe haven of capital for international buyers. Manhattan continues to attract foreign buyers who view real estate as a safe and lucrative asset, contributing to continued demand in the luxury space. Limited inventory and a scarcity of premium properties in coveted locations also continue to keep competition high among buyers for inventory that is priced properly.

Innovative new development projects are reshaping the market by introducing properties that blend state-of-the-art amenities with sustainability and remarkable design. These projects cater to a clientele that prioritizes not only luxury but also functionality, wellness, and lifestyle integration. Features such as private outdoor spaces, advanced home automation, and wellness-focused amenities have become key selling points.

Looking ahead to the remainder of 2025, the outlook for the luxury real estate market remains promising. With ongoing demand, a focus on lifestyle-driven properties, and limited competition in the ultra-luxury segment, the market is poised for sustained growth.

Market Performance

Here are how some other indexes and asset classes have performed as of this morning’s opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past WEEK as well as newly signed contracts in Manhattan. More inventory has hit the market in the new year.

Mortgage Rate Update

After crossing the 7% threshold last week, the 30-year fixed-rate mortgage saw its first decline in six weeks. While affordability may remain a challenge, this is welcome news for potential homebuyers as there has been a corresponding uptick in purchase applications since the beginning of the year.

News You Can Use

• US Mortgage Rates Drop for the First Time in More Than a Month Bloomberg

• President Trump Says He’ll ‘Demand that Interest Rates Drop Immediately’ CNBC

• LA Wildfires Have Sparked An Exodus to NY NY Post

• CEO’s Ramp Up Deal Outlook, EY Survey Shows Reuters

• How Buffett and Munger Helped Americans Become Savvy Investors NY Post

• Single Women, Rich Millennials Will Fuel Luxury Sales Market in 2025 Bloomberg

• Wildfires and Hurricanes Could Make Parts of the U.S. Uninsurable Axios

• Jamie Dimon Says the US Stock Market is ‘Kind of Inflated’ CNBC

• Donald Trump Inaugurated as 47th President of the United States Bloomberg

• Home with 25ft Shark Sticking Out of the Roof Available for Rent NY Post

The Deep Insight

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