Manhattan's high-end property market falls sharply after the new pied-à-terre tax is implemented.

Manhattan Luxury Real Estate Market Stalls

Last week, Manhattan’s high-end real estate market hit a standstill. Only one home was listed for over $10 million, and brokers suggest that Mayor Zoran Mamdani’s remarks about wealth and the proposed pied-à-terre tax are driving wealthy buyers away.

Between July 6 and July 12, 29 homes in Manhattan, each priced at $4 million or more, went under contract. However, just one sold for more than $10 million, according to a report. Normally, agents say they see three to five deals at this price point each week.

This solitary sale marked the worst week for the $10 million-plus segment since late December. In contrast, the overall luxury goods market appears to be holding steady. During the same week, 19 condominiums, six co-ops, and four townhouses above $4 million were also contracted, with a significant number of transactions under $6 million.

Compass broker Victoria Steiner pointed out that this economic slowdown reflects the increasing concerns among affluent buyers regarding New York’s political climate and tax implications. “It was shocking in a really bad way,” Steiner noted, saying buyers at this level are stepping back to reassess the situation.

She emphasized that these wealthy clients are now scrutinizing whether New York is still an appealing option for a second home, saying, “I think buyers over $10 million are educated buyers. They’re really doing their homework.”

Summer usually presents a lull in the Manhattan market, but Steiner mentioned that the current numbers seem unusually low. “Summer is slower, but not this late,” she explained.

Jonathan Miller, founder of appraisal firm Miller Samuel, noted that the sluggish high-end market aligns with broader trends seen in the second quarter. “It’s consistent with what we saw,” he stated, pointing out that the market for properties over $10 million is down, whereas the segment below it is performing better.

While some blame Mayor Mamdani’s rhetoric for diminishing demand, Miller noted that there’s “no concrete evidence” indicating wealthy buyers are fleeing New York because of the new administration. He added that the uncertainty surrounding the pied-à-terre tax could be a significant factor in the current stagnation.

The one contract over $10 million last week was for a condo at 1122 Madison Ave., which had an asking price of $21.8 million. The next transaction was a Chelsea condo that went for just under $10 million.