Issue 110 – Summer Real Estate Outlook: Partly Sunny with Brighter Skies Ahead 

While the real estate market traditionally slows down from Memorial Day to Labor Day, well-priced and carefully curated and marketed properties will still rise to the top — no matter the season. Summer will be a time of clarification, allowing us to head into a very active fall.

Although it is still late spring, home sales remain steady. Buyers continue to be active right now, but we will soon transition past the peak of the spring frenzy as we head into summer. Nothing about this is unusual.

According to the Olshun Luxury Market Report, released in mid-May, the market has been productive. Thirty-one contracts, each for more than $4 million, were signed in Manhattan. Condos outsold co-ops at a ratio of 15 to 12, and four townhouses were in the mix. That said, for the first time since the summer of 2021, the top two sales were co-ops. This is all great news!

While mortgage rates have mostly been flat, the market has experienced steady movement. According to Urban Digs, Manhattan’s active inventory was 7,260 listings in mid-May. New listings were down 24 percent week-over-week, indicating we may have reached a sort of market-movement solstice, which is par for the course each year.

I think the summer will be a time when people try to ascertain how all factors will play out — not just in real estate, but in the world. Overall, I’d say that while the market will certainly not crash, it will merely seek to maintain stability.  On the bright side, when the market direction is unclear, it often creates an opportunity that can be just as lucrative as when we have a firmer grasp of where the market is heading and what is available.

For example, if U.S. currency weakens, New York City real estate becomes more cost-effective for foreign investors regardless of the season, sparking even more global interest. Traditionally, even in times of severe strife, such as a recession or a significant downturn or catastrophe, NYC real estate manages to recover incredibly quickly and end up soaring.

Well-priced properties in highly sought-after neighborhoods will always attract buyers, while those in fringe areas, particularly in the summer slowdown, will suffer. The properties that rise to the top generally boast good bones, thoughtful renovations, and a top-tier marketing plan.  Intentional buyers are ready to scoop up these refined listings no matter the season, and it’s a big win if they get to do so when more casual buyers are busy having fun in the sun.

More good news for sellers: A recent study by The Happy City Index, created by the Institute for Quality of Life to measure and rank cities based on various factors related to well-being and happiness (including public services, education, environment, and inclusive policies), ranked New York City as the happiest place to live in the country. NYC was also ranked 17th worldwide, putting it among the happiest cities globally, alongside Copenhagen, Stockholm, and Zurich.

As Bankrate aptly summarized, “The continued combination of high mortgage rates, steep home prices and insufficient inventory levels points to 2025 being another tough year for buyers and sellers,” but ultimately leads to more growth in 2025 than 2024. With the right strategies and insights, both buyers and sellers can navigate this unique landscape successfully. The future holds promise, and those who engage thoughtfully with NYC’s market — which is notoriously resilient — may find their efforts rewarded in ways that are fruitful and fulfilling.

Issue 127 – The Price Isn’t the Price

A new calculation is changing what a New York apartment is actually worth. For decades, NYC real estate has been obsessed with price per square foot. However, now we may be entering the era of cost per year.

Consider two apartments of the same size, price, amenities, light, view, and location. If one has $6,000 in carrying costs and the other $11,000, are they really worth the same amount?

Increasingly, I would argue they are not because buyers aren’t simply purchasing apartments anymore. They are purchasing the economics of the buildings they’re in, which are starting to matter enormously. Think: insurance, labor, utilities, repairs, taxes, assessments, energy compliance, staffing, capital improvements, and reserves. While monumentally important, none of these photograph well, but all determine whether an apartment is easy to own — and eventually sell.

We have always understood that certain characteristics affect value: a lower floor trades differently from a higher one, an awkward layout matters, a protected view commands a premium, and poor light equals a discount. However, I contend another discount is related to the aforementioned carrying costs.

The sexiest amenity in New York real estate may soon be a healthy balance sheet. That sounds less exciting than a lap pool, unless you are the one writing the checks. Operating costs in New York have been rising, putting pressure on building budgets and making previously deferred capital projects harder to ignore.

The 2026 New York City Price Index of Operating Costs — which tracks expenses for the city’s rent-stabilized building stock — illustrates the broader pressure. Over the five years through 2026, insurance costs in that index increased more than 80%. Maintenance increased 29%, utilities more than 26%, administrative costs more than 21%, and labor nearly 16%.

Those figures aren’t a direct proxy for every condominium or cooperative in Manhattan. But they illustrate something anyone involved in operating New York buildings already understands: buildings are getting more expensive to run.

One mistake buyers can make is falling in love with the apartment and treating the building as secondary. In New York, you aren’t just buying four walls; you’re buying into a small economy. You’re inheriting its management decisions, staffing structure, physical plant, reserve philosophy, insurance exposure, and capital planning.

A building that deferred maintenance may appear inexpensive today because it hasn’t yet charged owners for the work it needs. That doesn’t necessarily make it inexpensive. It may mean the bill hasn’t arrived yet. Conversely, a building that recently completed an expensive façade project, replaced major mechanical systems, or invested in energy efficiency may initially appear less attractive because owners have already absorbed those costs. We need to consider which building presents the greater risk over the next decade. The answer isn’t always obvious from the monthly maintenance number.

Buyers understandably love low carrying costs, and brokers value them because they make a property easy to market. But low monthly charges deserve as much scrutiny as high ones. A good broker asks: Why are they low? Is the building extraordinarily well managed? Does it have other income? Are the reserves substantial? Or has the board resisted increasing common charges while postponing expensive work?

An important distinction exists between efficient and underfunded. A well-run building with appropriately funded reserves may ultimately be far more economical than one with artificially low monthly charges followed by recurring assessments. It’s not just the number that is meaningful, but the story behind it.

Few words cause more anxiety in a New York transaction than “assessment.” Even here, context matters because not every assessment is a red flag. An assessment financing a necessary capital improvement can actually strengthen the building. A new roof, elevators, façade work, upgraded mechanical systems, or energy improvements may protect long-term value.

The more important questions a sales pro considers are: What is the assessment for? Why didn’t reserves cover the expense? Is it part of a thoughtful capital plan or the latest in a recurring series of emergencies? And, perhaps most importantly, what comes next? A $500 monthly assessment with a clear end date concerns me considerably less than a building with no assessment, minimal reserves, and several million dollars of foreseeable work.

New York’s environmental requirements add another layer of complexity. Local Law 97 places emissions limits on many large buildings and creates increasingly stringent requirements over time. The encouraging news is that the overwhelming majority of covered privately-owned buildings are currently meeting the applicable limits.

But buyers should still understand what their particular building is facing; Has the Board commissioned the appropriate studies? What capital improvements may eventually be required? Has money been allocated? Is compliance incorporated into long-term planning? The concern isn’t whether a building faces a penalty today; it’s whether the building has a credible plan for tomorrow. That, increasingly, is part of due diligence.

New development creates its own version of this problem. Buyers are understandably attracted to pristine buildings with spectacular amenities and, sometimes, surprisingly reasonable initial common charges, but what will the building actually cost to operate when it is fully functioning?

Pools, spas, private dining rooms, screening rooms, landscaped terraces, playrooms, fitness centers, and mechanical systems all require staff, maintenance, and money long after the sales office closes.

The glossy brochure tells you what you’re getting. The budget tells you what you’re buying — both matter.

This conversation also requires nuance when comparing co-ops and condos. A co-op’s maintenance can initially look dramatically higher because it often incorporates expenses that a condo owner pays separately, including the shareholder’s proportionate share of the building’s real estate taxes. A condo may show a lower common-charge number while property taxes sit alongside it.

So, comparing maintenance to common charges without understanding what each includes is meaningless. The correct question isn’t: Which monthly number is lower? It is: What is my total cost of ownership, and what am I receiving in return? I believe strong building economics will increasingly become an amenity in their own right.

Brokers spend an immense amount of time learning how to talk about marble, appliances, ceiling heights, views, and finishes. We should be equally capable of explaining the financial health of the building we’re selling, because that is a big part of valuation.

None of this means price per square foot is irrelevant. It’s still an important metric. But like any metric, it becomes dangerous when used without context.

I’ve spent my career watching New York buyers pay premiums for things that cannot easily be replicated, including light, views, ceiling height, architecture, location, outdoor space, great proportions. But I always add another thing to the list: financial soundness. That may not command the same emotional response when someone walks through the front door. But increasingly, it may command something just as valuable – confidence, which matters in uncertain markets.

For years, we’ve asked buyers how much apartment they can afford. Now we need to start asking them how much building they can afford.  Because in New York, you don’t just buy the apartment — you inherit the economics beneath it.

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