Analyst explains why the New York condo market differs so much from the Sunbelt markets
Condo markets have had the attention of mortgage brokers throughout the summer and into the fall. Despite market headwinds, one area continues to see prices increase in spite of challenges.
Manhattan resale condo prices hit a record in August, the kind of number that would normally point to a market on fire. Mortgage rates are still sitting near 7%, and transaction volume has been muted because of the elevated rates.
That combination of high prices, higher rates, and lower sales doesn't fit the usual playbook, where higher rates are supposed to cool both buyer demand and prices at the same time. A record like that normally points to a market full of bidding wars, with buyers lined up and deals closing fast. Manhattan right now looks nothing like that.
One analyst says brokers need to keep an eye on what’s happening in the Big Apple to understand why the numbers are so strange.
John Walkup (pictured top), co-founder of UrbanDigs, said even his own team was caught off guard by how the numbers came together.
"We tend to look at resale condos because that's sort of the best apples-to-apples measure we have," Walkup told Mortgage Professional America. "It's less about necessarily the number itself and more about the direction. And I think what surprised us is, even though we've been talking about it for a year, the market didn't really go down. In fact, it's starting to tick up. It's like watching a battleship turn, but it is making that turn, which is interesting to watch."
Supply still struggling
Median price per square foot for Manhattan resale condos hit $1,500 in August, the highest monthly reading UrbanDigs has recorded since it began tracking the market in 2008. The third quarter is tracking even higher so far, at $1,508 per square foot, above the previous quarterly high of $1,472 set in the second quarter of 2025.
Walkup said Manhattan's path to that record looks nothing like what happened in the Sunbelt markets that boomed and then cooled over the past few years.
"You look at what's happening in a lot of the Sunbelt states, including Florida, and you had just an influx of demand, and prices went exponential," he said. "We never really had that real burst up in terms of prices. In fact, only now are we starting to see record prices. We never saw the nuttiness that a lot of the southern markets, the suburban markets saw. So we're starting to kind of come into our own."
He said that slower build has coincided with a supply picture that keeps getting tighter rather than easing into the fall, when new listings would typically start showing up.
"The fall is when you usually start building supply. We're still down, down 15% year over year still," he said. "Behind the scenes, there's a lot of stuff happening. You definitely have some battles here and there. But supply is still down. And when buyers compete, sellers tend to win. That's sort of the mechanism that we're seeing."
Four very different markets
The borough-wide record obscures how differently prices are moving depending on the neighborhood. Resale condo prices per square foot are up 6.0% year over year on the Upper East Side so far in the third quarter, compared with 2.8% in Midtown, 2.0% Downtown and just 1.2% on the Upper West Side, according to UrbanDigs.
A client buying on the Upper East Side is facing a meaningfully different loan amount than the same borough-wide average would suggest. Walkup said assuming that it’s the same across the area is where deals can get into trouble.
"That's why broad market statistics are useful context, but dangerous pricing tools," he said. "Neighborhood matters. Building matters. Floor, view, layout, condition, renovation quality, outdoor space, timing, competing inventory, and the circumstances surrounding recent sales all matter."
For a broker, the numbers in the market are another example of how prices can vary even from one street to the next. Walkup said those advising clients in NYC will need to be mindful of what’s happening in Manhattan, but also be aware of what the market’s like where a client is buying.
"The record Manhattan PPSF absolutely belongs in client conversations," he said. "But neither side should use $1,500 per square foot as the number that determines what an individual apartment is worth. That requires working down from the neighborhood to the building, the line, and the relevant comparable sales. That final layer is where pricing decisions actually happen."
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