Issue 113 - Where is the Real Estate Market Heading? The Big Questions

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Issue 113 – Where is the Real Estate Market Heading? The Big Questions

September 1, 2025

As we head into fall, I am often asked about where the real estate market is heading. This year, numerous competing issues are making it difficult for me to predict exactly what will unfold. The spotty movements of this past summer raise some very big questions that we need to have answered before knowing how everything will shake out.

In general, since the pandemic, people generally value their downtime much more. Summer is a time of respite for many, eager to take a break from the stress and intensity of work—and news of all the executive orders, proposed legislation, global politics, and world wars.

Post-pandemic demand for real estate was fueled by one of the biggest run-ups in history, resulting in the typical selling times for property no longer existing and being seasonally defined. However, inflation and mortgage rate hikes have forced people to wait on the sidelines.

I think many sellers are hoping that the president’s consideration of eliminating the capital gains tax may provide a significant opportunity for those who have been sitting on properties for decades to reap a solid return on their investment.

As such, it would allow them to cultivate true wealth creation by saving on considerably high capital gains, which in turn becomes the catalyst for people to be able to buy and sell with a higher profit. As with all political maneuvers, it remains to be seen how this will ultimately play out.

CNBC breaks it down this way:

Under current law, property sales are subject to capital gains taxes once profits exceed $250,000 for single filers or $500,000 for married couples filing jointly.
Since 1997, those thresholds have never been indexed for inflation, and more home sales are subject to capital gains as property values rise.

“Homeowners who have lived in a home as their primary residence for at least 24 months in the five years before the sale receive an exemption on the first $250,000 of gains for individuals and $500,000 for married couples filing jointly,” Newsweek reports.

The National Association of REALTORS’ research has found that nearly 29 million homeowners, roughly one-third of the market, already face potential capital gains taxes if they sell, “and that number is expected to climb sharply over the next decade.”

“These tax burdens create a ‘lock-in effect,’ especially for seniors, discouraging people from selling and keeping much-needed homes off the market,” Newsweek summarizes.

This proposal aside, at the end of the day, we are dealing with a much more fundamental issue in NYC: the mayoral race. Until it is decided who is elected, we won’t know what is going to happen here, especially whether the potential new legislature could lean towards socialism or capitalism. Ultimately, who is in power will determine how the city values real estate as an asset.

If the Democratic nominee, Zohran Mamdani, wins the election, potential real estate impacts involve rent stabilization and affordability, such as a rent freeze for rent-stabilized apartments. This could potentially disincentivize property owners from investing in maintenance and improvements, impacting the quality of NYC housing stock.

Mamdani also claims to want to invest in 200,000 publicly subsidized affordable housing units over a 10-year period. Some experts suggest this large-scale construction effort would be wrought with challenges.

More importantly, according to CNN, Mamdani’s real estate proposals are sending jitters through the NYC luxury real estate market. His proposed “millionaire tax” would prompt luxury home buyers and owners to consider moving out of state, which could significantly impact this market segment. Additionally, developers and investors would also face reduced incentives.

Fox Business concurs, citing a real estate expert who reports, “Consumers are taking a step back to wait and see how this plays out, because if a socialist is elected mayor of New York City, I don’t think it’s going to be good for the long-term health of our local economy and the real estate industry.”

While Andrew Cuomo and current mayor Eric Adams are still duking it out as NYC’s independent frontrunners, a win for Cuomo would ostensibly mean prioritizing and streamlining development processes, potentially leading to faster approvals and fewer regulatory roadblocks. He is also a proponent of zoning changes, which can lead to gentrification in some areas. As such, Politico suggests the well-heeled industry is rallying around his bid for mayor.

And lastly, if Adams secures a win, he would likely continue to keep housing supply a central focus, particularly with his “City of Yes” initiative, which aims to build up to 80,000 new homes in 15 years, and his “Manhattan Plan” to add 100,000 new homes in that borough over the next decade. Like Cuomo, his plans would include zoning changes, massive conversions, and encouraging development around transit hubs. Adams also supports allowing accessory dwelling units (ADUs) and eliminating parking mandates for new construction to facilitate the creation of housing. According to a NY1 segment this summer, “Mayor Eric Adams may be the new favorite candidate of the city’s business and real estate community.”

If Adams is successful in increasing housing supply and affordability, he could possibly slow the rapid real estate appreciation NYC has seen lately, especially in the luxury market, according to NY1. “Some wealthy New Yorkers have expressed concerns about potential tax increases or changes in policy under a different administration, potentially accelerating their plans to move outside of NYC.”

Lastly, the Republican candidate, Curtis Sliwa, would likely modify or repeal Adams’ “City of Yes” initiative and revert zoning to its previous state. This could mean a slowdown or halt to development projects already in motion and deter others from starting at all.

Sliwa does suggest ending unfair property tax increases on working-class owners and forcing large corporate landlords to pay more. He might also repeal the 2019 laws targeted at rent-stabilized landlords.

According to the New York Post, in essence, “a Sliwa victory could lead to a shift in real estate priorities, with a stronger emphasis on local zoning control, fair taxation for homeowners and renters, and the revitalization of existing housing stock, possibly impacting large-scale development and corporate real estate interests.”

As we watch all this play out, eager buyers and sellers are sitting on the sidelines, ready to cast their lines once the direction of potential changes and local initiatives becomes clear. Only time will tell, but one thing is already clear: The real estate market in NYC is always a key focal point, not just locally, but nationally and globally. All eyes will be on NYC this fall, keen on seeing what transpires and how real estate experts guide clients to maximize their value.

Issue 125 – The $5 Million Question: What’s Actually Worth Owning in New York Right Now?

September 1, 2026

The New York real estate market is entering a period where the old rules of valuation are becoming less reliable. Price per square foot and comparable sales still matter, but buyers are weighing those factors differently — rewarding some attributes while quietly discounting others. The question is no longer simply, “What did the apartment downstairs sell for?” It’s “What are buyers willing to pay a premium for now — and what have they stopped paying for?”

I could identify at least seven factors being repriced in Manhattan right now: outdoor space, views/greenery, turnkey condition, monthly carrying costs, new development versus resale, second-home ownership, and the increasingly important distinction between a great apartment and a great building.

Confusing matters for buyers is that the NYC market is sending contradictory signals. Manhattan inventory is changing by price band, mortgage rates remain challenging nationally, and NYC’s new pied-à-terre tax is creating another potential dividing line in how buyers assess ownership costs.

In the luxury zone, one way to test those shifting valuations is what I call “The $5-Million-Question.”

I can take $5 million and show clients what that buys today in six completely different versions of New York: Think:

$5M on Central Park West
$5M downtown
$5M in Brooklyn
$5M in a new development
$5M in a great prewar co-op
$5M for something compromised but spectacular

Same amount of money. Same city. Radically different value.

The questions to ponder are:

Which one would I buy?
Which one would I avoid?
Which one has the greatest upside?
And which one will be easiest to sell five years from now?

That comparison is more revealing than a market-wide statistic because it shows what the same $5 million actually buys — and what it might be worth to the next buyer.

On the surface, the questions are simple. In practice, answering them requires a sophisticated analysis — price per square foot, carrying costs, taxes, liquidity, buyer pool, neighborhood trajectory, architectural quality, and exit strategy. Buyers should seek out an expert broker not only for information but also for interpretation.

For a long time, value was assessed through familiar metrics: price per square foot, comparable sales, neighborhood, floor, light, views, condition, and building pedigree. Those factors still matter. But buyers are now weighing them differently. We are in a repricing phase — not necessarily of New York City as a whole, but of the individual components that define its value.

At Central Park West, $5 million typically trades square footage for permanence: park frontage, architectural significance, scarcity, and long-term stability.

Downtown, the same budget may secure a more contemporary product — larger windows, amenities, and outdoor space — but often at a higher price per square foot and with higher ongoing costs.

In a new development, $5 million buys condition, services, and immediacy. The question is how much of that price reflects a “new development premium,” and whether the resale market will recognize it when the time comes to exit.

In Brooklyn, the same capital can deliver scale, outdoor space, and architectural character that would be significantly more expensive in Manhattan.

None of these is inherently superior. The real questions are: What are you actually buying, and who will want it next? That second part is often underweighted: Which market is offering more rewards?

Based on buyer behavior, several attributes are becoming more defensible:

Light and views are not replicable. While layouts can be changed, exposure and outlook cannot be transformed.

Functional outdoor space is valuable. Usable terraces connected to living areas are materially more valuable than secondary or awkwardly accessed outdoor areas.

Strong floor plans are key. The pandemic reinforced that usability matters as much as size. Proportion, flow, and flexibility are now critical.

Condition has always mattered — now more than ever. High construction costs and uncertainty have increased demand for finished product. However, there is a ceiling — buyers will not indefinitely overpay for someone else’s design choices.

Low carrying friction is persuasive. Taxes, common charges, assessments, and long-term building health are now central to valuation. High monthly costs can materially impact resale liquidity.

Scarcity can be the tipping point. A strong apartment does not need to be perfect. It needs to be difficult to replicate.

So, where would I be most cautious today?

I would be disciplined about paying a premium purely for newness. New does not hold value on its own — architecture, location, and scarcity do. I would closely evaluate buildings where carrying costs are disconnected from underlying asset value. I would avoid trophy pricing unless there is a true trophy attribute. And I would be careful about pricing that is anchored primarily to renovation cost.

A $2 million renovation does not translate into a $2 million increase in value.

The market does not reimburse cost. It prices outcome.

If I were allocating funds at this level, the guiding principles should be: light over finishes, proportion over decoration, irreplaceable views over amenity packages, and ultimately, best-in-class units in proven buildings over average units in trending ones.

The strongest purchases do two things at once: they function as exceptional homes today and remain desirable assets tomorrow. That means thinking about the exit before the entry — and recognizing that New York isn’t one market, but a collection of micro-markets defined by neighborhood, block, building, floor, and orientation.

While real estate is inherently emotional, value is what remains when emotion fades.

Whether the budget is $1 million, $5 million, or $25 million, the question is ultimately the same: What is actually worth owning?

That is the question the next phase of the market will answer — and it will reward analysis over generalization.