Manhattan prices rose 6% in Q2 even as sales fell nearly 30%. A Coldwell Banker Warburg exec says geopolitical uncertainty was as big a factor as rates
Manhattan's spring market saw prices rise and sales fall sharply, a disconnect driven less by mortgage rates than by geopolitical uncertainty that had buyers waking up every morning to a new war headline.
The Coldwell Banker Warburg Q2 2026 Market Report captures a market navigating multiple headwinds. While elevated rates have some effect, a new factor could be pushing inventories higher.
One factor giving the market a push it did not have a year ago is New York City's pied-à-terre tax, which applies to non-primary residences above a certain value. Its advancing implementation is now moving second-property owners to reconsider whether to hold, downsize, or sell.
Kevelyn Guzman (pictured top), regional vice president at Coldwell Banker Warburg in New York, was born and raised in Manhattan and has been with the firm since 2008. She said the pied-à-terre effect has been causing property owners to pick up the phone.
"Inventory is still low," Guzman told Mortgage Professional America. "However, ever since the pied-à-terre tax announcement happened, our phones did start ringing. People just interested in selling or thinking about, ‘Do I actually need to have this second apartment anymore?’ And so we did have a few listings that we put on the market as a result of the pied-à-terre tax."
Why spring sales fell
Spring is typically the busiest season in the New York market, and the sales decline was steeper than rates alone would explain, Guzman said. Geopolitical uncertainty was one of the main causes of the decline.
"I would say the war was a big factor," she said. "Everyone was waiting to see what was happening there. People were concerned about investing. Every day you woke up, and it was a new story. Who are we bombing next? So there was a lot of uncertainty, and I think that that was a real driver in terms of sales. The springtime — and it's very unusual, springtime for us we're very busy — the war had a lot to do with it."
Reports of widespread layoffs compounded the hesitation, she said, adding another layer of uncertainty on top of geopolitical concern. While these headwinds are causing some hesitation, Guzman said they’re also forcing buyers to have a stronger game plan before heading into the market.
"We've heard a lot recently about all these layoffs happening, and so I think there's still a lot of uncertainty throughout," she said. "But we are seeing buyers that are being really strategic in their purchase. They're definitely negotiating more, that's for sure. They always have in the past, but we're seeing stronger negotiations now."
The market is in balance rather than tilted toward buyers or sellers, she said, and sellers who understand that are the ones moving product.
"The seller that is well informed and has a great agent that really understands what's happening in the market right now understands that positioning and the price and staging their property is key," Guzman said. "I wouldn't say it's a buyer's nor a seller's market. I think we're right in the middle."
A sluggish Q2, but a strong start to Q3
The report, which draws on UrbanDigs data through June 29, 2026, shows that closed sales in Manhattan were down 29.2% year over year to 2,424, while the median sales price climbed 6.1% to $1.3 million.
Properties sat on the market for an average of 95 days, up 21.8% from the same period last year. Inventory edged up 9.4% from the first quarter to 6,585 listings but remained 7.9% below year-ago levels.
Brooklyn tracked similarly, with closed sales falling 31.5% year over year to 1,965 and the median price rising 5.5% to $1.05 million. Days on market climbed 31.5% to 71, and inventory reached 3,824 listings, up 5.3% year over year and 13.5% from the first quarter.
The calls Coldwell Banker Warburg has been receiving are not all from owners who want to exit entirely, Guzman said. Some are rethinking the size of the property they hold.
"In some cases they're moving on, but maybe downgrading as well," she said. "They maybe might not need a property of that size anymore. Maybe they're thinking, maybe I'll be better off with a one-bedroom or a studio as opposed to a two- or three-bedroom."
While the spring was a bit sluggish, Guzman said the summer has started well, and she expects a strong third quarter.
"There is a lot of movement happening right now, so we should see a strong Q3," she said. "We have a lot of international buyers, believe it or not, and we have all-cash deals as well. We have definitely seen our summer has been really strong. We are definitely busy."
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