As one year closes and another begins, New York’s residential market reveals where value will concentrate next

Where We Stand

The fundamentals of Manhattan’s residential market remain remarkably resilient. As 2025 draws to a close, the data tells a story that should give prospective buyers and investors reason for measured optimism.

This has been a year of recalibration. Inventory levels have begun to rise for the first time since 2022, while sales volume has climbed in tandem. Homes are moving faster—median days on market declined to 68 this year, down from 72 in 2024—yet the market has not tipped into the frenetic competition that characterised the pandemic-era boom. What we are witnessing is something more sustainable: a market finding its equilibrium.

The rental market continues to underscore Manhattan’s enduring appeal. Median rents held firm at nearly $5,000 in November, representing an 11 per cent year-on-year increase, while vacancy rates remain below 2 per cent. These figures reflect a fundamental reality that those of us working in international real estate have long understood: New York’s scarcity of space, its role as a global economic and cultural centre, and its capacity for reinvention continue to support demand across market cycles.

The city itself reflects this duality of transition. New York has elected new leadership on an affordability platform whilst simultaneously welcoming the opening of JPMorgan Chase’s global headquarters at 270 Park Avenue. These seemingly contradictory developments make perfect sense to anyone who grasps New York’s essential character: this is a city that has always held space for complexity, ambition, and reinvention.

What Has Shifted

Several structural changes have redefined how value is assessed in Manhattan, and understanding them is essential for anyone entering this market in the year ahead.

The first is the growing primacy of monthly carrying costs in buyer decision-making. For years, headline purchase prices dominated negotiations. Today, sophisticated buyers—particularly those accustomed to different cost structures in markets such as Milan or Miami—are scrutinising what a property will cost them each month. Two apartments at identical price points can present vastly different value propositions once common charges, maintenance fees, and financing costs are factored into the equation. Buildings with strong reserves and disciplined financial oversight are commanding premiums, and rightly so.

The second shift concerns inventory composition. As new development activity has slowed, the pipeline of brand-new apartments has contracted. More buyers are consequently turning to resale properties, including homes that require cosmetic updating. This represents a meaningful departure from recent years, when turnkey condition was nearly universal in buyer requirements. For those with patience and vision, renovation-ready properties in classic prewar co-ops—particularly on the Upper East and Upper West Sides—offer value that fully renovated apartments simply cannot match in the current environment.

Co-operatives, long overshadowed by the flexibility and investor-friendliness of condominiums, are quietly regaining market share. Lower price-per-square-foot metrics, stronger financial governance, and the psychological appeal of community-oriented ownership structures are drawing buyers back to a segment that had fallen somewhat out of fashion. In periods of economic uncertainty, co-ops have historically demonstrated notable resilience—a consideration that carries weight in the current macroeconomic climate.

Townhouses and boutique buildings are also experiencing renewed demand from buyers prioritising privacy, outdoor space, and lower density. As inventory tightens in traditional strongholds, neighbourhoods such as Harlem, Hamilton Heights, and Carnegie Hill are attracting serious attention from space-driven purchasers willing to look beyond conventional boundaries.

What Lies Ahead

As the calendar turns, several indicators suggest 2026 will reward those prepared to act decisively.

Mortgage rates are forecast to moderate slightly, potentially averaging around 6.3 per cent—a modest decline from this year but sufficient to sustain buyer activity. More significantly, the spring market appears poised to arrive early. The traditional holiday slowdown has not materialised with its usual intensity; conversations with active buyers and sellers suggest that many who paused during 2024’s uncertainty are preparing to re-enter. By mid-January, we may well see increased contract activity mirroring patterns observed in 2013, 2016, and 2022, when economic momentum aligned with pent-up demand.

For international buyers—those who understand the value of diversifying across global gateway cities—New York continues to offer a compelling proposition. The 2026 market will reward those who understand nuance: who recognise that value in Manhattan is no longer determined solely by location and square footage, but increasingly by building quality, financial health, and monthly affordability.

Manhattan’s fundamentals remain unchanged: scarce space, resilient demand, and enduring value in well-located homes. The question entering 2026 is not whether opportunity exists, but whether one is prepared to seize it.

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Richard Tayar is the founder of Columbus International, an international real estate firm bridging markets between the United States and Italy, with focus on New York, Milan, Tuscany, and Miami.