Manhattan luxury real estate sales remained strong in June, with 126 contracts signed for apartments priced at $4 million or more, up from 124 during the same four-week period last year, according to Olshan Realty. The resilience came a month after New York Gov. Kathy Hochul and the state legislature approved the pied-à-terre tax on May 27, a measure that real estate agents and developers predicted would trigger immediate market declines and wealth flight to Florida. Brokers attribute the continued demand to liquidity from recent initial public offerings and soaring asset prices, which have outweighed concerns about the new tax on second homes valued by the city at more than $1 million.
The Real Estate Board of New York stated soon after the measure passed that "the tax on second homes will dampen market activity, reduce property values, hurt new development and weaken the city's economy." Many in the industry cited what they called "the Mamdani effect," referring to New York City Mayor Zohran Mamdani and potential wealth flight from taxes.
Manhattan Luxury Sales Post Strong June Performance
The average price of a Manhattan apartment reached its second-highest level ever during the second quarter, up 5% over the past year to roughly $2.2 million, according to Brown Harris Stevens. Sales of condos priced between $10 million and $20 million surged 55%, according to Compass. Sales of condos over $20 million were up 33%, with average asking prices up 14%, the real estate brokerage said.
June transactions included an $80 million duplex penthouse in a new condo building near Manhattan's West Village, a $26 million condo downtown and a $22 million co-op on the Upper East Side. Lauren Muss of Douglas Elliman, who had a $17.5 million condo listing go to contract in June, said, "The amount of money out there is insane. We're seeing big things come to us every day. It's only getting stronger."
Scott Hustis of Paradigm Advisory at Compass listed a $16.5 million penthouse duplex in Madison Square Park Tower on April 8. One buyer expressed immediate interest but pulled back when Hochul announced the proposed tax a week later. By late May, as the details of the tax started becoming more clear, buyers came back into the market. The penthouse went into contract on June 6.
The pied-à-terre tax, imposed on non-primary residences valued by the city at more than $1 million, was first proposed in April, approved in May and officially took effect this week. It applies to residences that fit the tax criteria as of Jan. 5, 2026. While Hochul and Mamdani have said the tax will raise $500 million a year, the New York City Comptroller estimates it will raise about $340 million to $380 million.
Low Inventory Pressures Buyers Amid Tax Implementation
Jonathan Miller, CEO of appraisal and research firm Miller Samuel, said luxury inventory is down 40% compared to last year and is now at the lowest level he's seen since he began tracking it in 2004. The inventory shortage is adding pressure to buyers in the Manhattan market.
Marc Palermo of Douglas Elliman has a listing for a $19 million, 4,700-square-foot apartment at 565 Broome St., the glass condo tower whose buyers have included tennis great Novak Djokovic, Uber co-founder Travis Kalanick and niece of the president Mary Trump. In the fall of 2025 and early 2026, the listing attracted several offers for 20% or 25% below the asking price, Palermo said. Yet the building held firm to its price.
By late spring, with markets overcoming Iran war fears and the SpaceX IPO and other offerings creating massive liquidity events, the Manhattan market sprang to life, brokers said. Palermo said he got a "strong offer" for the $19 million apartment and it went to contract at the end of June. While he declined to comment on the buyer, he said they already own a unit in the building and wanted to expand. Since the buyer isn't a primary New York tax resident, they will likely owe a pied-à-terre tax.
"People took a breath, they settled into the new reality and the smart ones charged in," Palermo said. He said the other two early bidders for the Broome Street listing also ended up closing on other apartments recently — one for a $15 million apartment and the other for a $17 million apartment. He said virtually all the high-end buyers in Manhattan are paying cash, without mortgages.
Wealth Transfer and Cash Buyers Drive High-End Demand
Along with the stock market gains and boom in finance, the so-called great wealth transfer is also driving demand in Manhattan. Palermo said he's doing a number of high-end deals with buyers under the age of 40 in which the parents or a family office or trust is the underlying buyer.
"We're seeing a lot of gifts coming in from parents," he said. "If you're under 40 and you're buying in New York City, chances are you're not making enough to buy on your own."
Hustis said ultra-wealthy buyers are more concerned about buying at the right time in the market cycle rather than paying an added tax. "Right now, they're seeing things go into contract and prices not coming down and they decide to execute," he said.
FAQ
What happened to Manhattan luxury real estate sales after the pied-à-terre tax passed on May 27?
Sales remained strong in June, with 126 contracts signed for apartments priced at $4 million or more, up from 124 during the same four-week period last year, according to Olshan Realty. The average price of a Manhattan apartment reached its second-highest level ever during the second quarter, up 5% over the past year to roughly $2.2 million, according to Brown Harris Stevens.
How much inventory is available in Manhattan's luxury real estate market?
Jonathan Miller, CEO of appraisal and research firm Miller Samuel, said luxury inventory is down 40% compared to last year and is now at the lowest level he's seen since he began tracking it in 2004.
What are the details of New York's pied-à-terre tax?
The tax is imposed on non-primary residences valued by the city at more than $1 million. It was first proposed in April, approved on May 27 and officially took effect this week. It applies to residences that fit the tax criteria as of Jan. 5, 2026. While Gov. Kathy Hochul and Mayor Zohran Mamdani have said the tax will raise $500 million a year, the New York City Comptroller estimates it will raise about $340 million to $380 million.
