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New York City’s story is one of resilience. Though real estate growth lagged in the wake of the pandemic, Manhattan now stands on the brink of a resurgence.

Manhattan's moment: why the borough is set to break through an 8-year property price ceiling

New Yorkers are tough. Their economy is too. If history serves as any guide, Manhattan’s economy doesn’t just recover from times of crisis – it comes back roaring. Take the 2008 financial crash. Less than a decade later, unemployment hit a historic low. And two years after the 9/11 attacks, the city’s GDP had rebounded, growing to $500 billion in 2003.

So why has its real estate market been so slow to rebound post-pandemic? While the rest of the nation saw residential property prices skyrocket – jumping 47% since 2020 – Manhattan’s prices have barely budged, increasing only 3% since 2017. On paper, it might look like stagnation. But for managing director at Elegran | Forbes Global Properties, Jared Antin, it’s a coiled spring.

“New York City is resilient,” says Antin in a recent market insights article, “and its time to shine is again on the horizon. For investors and homebuyers alike, the current landscape offers a unique opportunity to capitalize on a market finally poised for appreciation.”

While the rest of the country sprinted ahead, Manhattan stayed cool, calm and collected. Currently undervalued, Manhattan, long regarded as an enduring and countercyclical market, is now uniquely positioned to break through an eight-year price ceiling, says Antin. A sleeping giant ready to wake up. 

As the long shadow of the pandemic begins to fade, Manhattan stands at a pivotal juncture—undervalued yet primed for a resurgence. (Shutterstock)

From peaks to pandemic

To understand Manhattan’s current trajectory, we must revisit its last market peak in early 2017. From 2009 to 2016, the city experienced a prolonged period of price growth, fueled by international capital, booming new development and relentless demand. But by 2016, the cracks began to show.

According to Antin, regulatory changes, such as China’s restrictions on capital outflows and the 2017 cap on state and local tax (SALT) deductions, tempered demand among high-net-worth and international buyers. Additional legislative shifts, including New York’s 2019 mansion and transfer taxes, further slowed market momentum.

The pandemic compounded these challenges, briefly turning Manhattan into a cautionary tale of urban living. Prices fell by up to 15% as buyers fled for the suburbs. However, what followed was a testament to the city’s pluck. Savvy buyers seized the opportunity created by discounted prices and historically low interest rates, laying the groundwork for the market’s eventual recovery. 

For anyone seeking a home that combines lifestyle, opportunity and potential, Manhattan’s real estate market represents a chance to secure a piece of one of the world’s most iconic cities, like this three-bedroom condo at 53 West 53 in Midtown listed for $10.5 million. (Elegran)

Why Manhattan is ready to break through

What makes this moment different? Several forces are converging to position Manhattan as one of the most promising real estate markets in the country.

Demand meets scarcity

Manhattan has always been a magnet. It’s a global financial hub, a cultural epicenter and a symbol of ambition. Now, with workers, families and investors returning to the Big Apple, demand is rising. Yet supply remains constrained. High construction costs, zoning restrictions and limited land have slowed the pace of new development. The result? A classic powder keg of high demand and low supply, ready to ignite price growth.

Renters turn buyers

The rental market is already booming. Rents have surged past pre-pandemic highs, and for many long-term residents, the math is starting to shift. Why pay record-breaking rents when homeownership offers stability and long-term financial benefits?

The return of foreign buyers

Manhattan real estate has long been a beacon for international investors, offering a stable, blue-chip opportunity even in turbulent times. The pandemic briefly interrupted this flow, but with travel restrictions lifted, foreign buyers are coming back. Drawn by the strength of the U.S. dollar, the city’s cultural prestige and the potential for capital appreciation, they are once again putting their money into Manhattan.

Regulatory winds may shift

While recent legislative changes dampened demand, future adjustments could reverse the trend. The reinstatement or expansion of SALT deductions, for instance, would ease financial burdens on property owners, making Manhattan real estate even more attractive.

Inventory will return

The “lock-up effect” – homeowners reluctant to sell because of favorable existing mortgage rates – is easing. As confidence in the market grows, sellers will feel more comfortable upgrading or downsizing. This increase in inventory, coupled with rising demand, is expected to unlock new opportunities for buyers and sellers alike.

Whether Manhattan’s real estate rebound makes a swift surge or a steady ascent remains to be seen. But its current market conditions, paired with rock-solid fundamentals—an attractive lifestyle, prime location and magnetic global appeal—certainly point to a promising upswing. (Elegran)

A “punishingly efficient” market

As Manhattan wakes up, Antin says sellers will need to be extra strategic. Unlike the frothy markets of years past, where fear of missing out drove buyers to overextend and overpay, today’s buyers are more measured. They’re not rushing but waiting for the perfect property and the right deal. While the market remains active and liquid, this newfound selectivity has created an interesting dynamic – not all sellers benefit equally, even in what might otherwise be considered a “seller’s market.”

“Manhattan’s market today is punishingly efficient,” Antin explains. “A dynamic where sellers of desirable, well-positioned and appropriately priced properties are rewarded with buyer interest and strong offers. However, sellers of overpriced, mispositioned or less desirable properties face significant challenges as buyers remain discerning and selective.”

With all these stars aligned, the window of opportunity for both buyers and sellers is opening. Surging demand, constrained supply and possible regulatory shifts all point to a market on the verge of a breakthrough.

The question isn’t if Manhattan will rise again – it’s when. 

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