The Luxury Market Vs. The “Non” Luxury Market:
A Market Split in Two
In Manhattan (and Brooklyn), the real estate market is showing cautious signs of improvement. Contract activity is up modestly, and buyers appear to be slowly returning. However, beneath those headlines lies a much more interesting picture. The dividing line isn’t about neighborhood or property type—it’s about price.
In Manhattan, the luxury market is generally defined as $4 million and above, while in Brooklyn it is $2 million and above. This year, Manhattan has seen several weeks and even months come close to breaking luxury market records—or surpassing them altogether. Just a few weeks ago, Downtown Manhattan recorded its highest-priced sale in its history, when the No. 1 contract featured the most expensive apartment or townhouse ever sold in the area. It surpassed the $80 million spent by Amazon founder Jeff Bezos in 2019 on a townhouse and two adjacent apartments, as well as the $72.5 million sale of a townhouse at 138 W. 11th Street in January 2024. The record-setting deal was for PH8 at 140 Jane Street, listed at $87.5 million.
The luxury market also came close to breaking additional records. During the week of May 19, 55 contracts were signed for properties priced at $4 million and above—marking the busiest single week in this segment since November 15, 2021. July also saw strength, with 29 contracts signed in a single week, making it the strongest third week of July since 2021, when 39 contracts were signed. For the month of June, 153 contracts were signed at $4 million and above—making it the third-strongest June since record-keeping began in 2006.
While the luxury market is breaking records, the rest of the market is having a much more subdued year. The main factor driving the division between the two markets is interest rates. In mid-2021, nearly 60% of Manhattan purchases were financed; today, 69% are all-cash. Since the Federal Reserve began raising rates in 2022, mortgage costs have risen sharply, adding hundreds of dollars per month to payments on apartment loans. This has cooled demand among financed buyers, while cash-rich luxury buyers remain largely unaffected and are capitalizing on developers and sellers eager to offload their properties.
One can see the divergence in contracts signed activity: In Manhattan, deals under $4 million have slowed, while transactions over $4 million have remained steady and in some months, (aforementioned) broke records. Looking at the division from a listing-supply perspective, Manhattan property over $4 million is down 16% year-over-year, while “non”-luxury inventory has grown 4%.
Pricing and price reductions also highlight the split: In Manhattan, listings under $4 million are seeing 11% more price cuts than a year ago, while luxury listings have seen 9% fewer. This suggests that sellers in the “non”-luxury market are feeling more pressure to adjust to buyers’ tighter budgets, while luxury sellers retain a bit more negotiating power—depending on other factors.
Price per square foot data offers perhaps the clearest view of this dynamic. In June’s resale condo market, Manhattan homes over $4 million saw a 3% year-over-year increase in PPSF, while those under $4 million were unchanged. Luxury properties are not only holding their value despite higher interest rates—they’re appreciating—while non-luxury homes are struggling to keep pace.
For buyers under the luxury threshold, this may present an opportunity. The somewhat softer demand and more price reductions could result in more motivated sellers and offer attractive value for buyers willing to accept today’s higher interest rate costs. There is also talk of future rate cuts that could help the “non”-luxury market rebound this fall and into spring. But for now, the luxury market is enjoying one of the strongest years on record.
Local Happenings
NYC Broadway Week
SEPTEMBER 4-17, 2025
Enjoy a special 2-for-1 ticket offer across nearly two dozen shows, making theater more accessible to audiences. The biannual event, held each winter and fall, gives theater lovers the chance to enjoy Broadway at a fraction of the cost. Click HERE to learn more!
The Feast of San Gennaro
September 11-21, 2025
The Feast of San Gennaro returns to Mulberry Street, filling Little Italy with festive lights, live music, parades, and Italian specialties. This 11-day celebration honors the patron saint of Naples while showcasing the heart and flavor of NYC’s Italian-American heritage. Click HERE to learn more!
Team News
Supporting Our Teammate Selene After a Devastating Loss
Our dear colleague and friend, Selene Varnel, and her family have suffered an unimaginable loss—their apartment was destroyed in a fire on August 15th. While we are deeply grateful that Selene and her young son are safe, the fire took nearly everything they owned.
A GoFundMe page has been established to support Selene and her son as they begin the process of rebuilding their lives. Any contribution—big or small—will make a meaningful difference as they replace essential items, find stability, and work toward recovery.
Thank you for your support.
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