Manhattan’s Upper West Side is renowned for its luxury real estate market and is one of the most highly sought-after New York City neighborhoods amongst buyers and investors worldwide. Full of architectural landmarks and nestled between Central Park and Riverside Park, the Upper West Side also offers an abundance of museums, schools, five-star gourmet restaurants, buzzing nightlife, and high-end shopping. All of that has naturally contributed to the strength of the Upper West Side’s ultra-luxury market, both in resale and new development, with properties boasting some of the most iconic park, river, and city views New York City offers.

Given the desirability and dynamism of the neighborhood, many factors impact market values, from rising interest rates to fluctuations in inventory, and from stock market performance to geopolitical climate. Like any other market segment, the uppermost end of the luxury market is an ecosystem. Let’s closely examine the ultra-luxury market in New York City.

When considering the best real estate in New York City, it’s helpful to examine the city’s ultra-luxury market in contrast with the market for resale properties. We can also consider how different types of ultra-luxury properties are represented.

The West Side (generally 59th St. to 110th St., Hudson River to west of Fifth Ave.) saw 18.2% resales (percentage of the total market) in the second quarter of 2023. For area condos, the average price per square foot was $1,578 — 7% lower than last year but still a high premium for space. Meanwhile, the median price for the most valuable resale properties on the West Side (i.e., those with three-plus bedrooms) was $2.65 million. That median is in line with figures throughout Manhattan.

When we talk about the ultra-luxury market, though, we’re setting our sights higher. The Manhattan ultra-luxury market has a higher ceiling than most comparable markets worldwide. We’re looking at properties whose owners are asking prices well over a few million dollars. In 2022, there were 244 super-prime (over $10 million) and 43 ultra-prime (over $25 million) residential real estate transactions in New York, putting the Big Apple ahead of runners-up Los Angeles and London in ultra-luxury real estate.

Part of what makes the Upper West Side unique is that it has several kinds of ultra-luxury properties available. You can find pre-war co-ops, recently developed condos, and brand-new developments throughout the neighborhood. As we will see, the RLS has dozens of properties above $10 million, representing various architectural styles and time periods.

Now that we know the kind of properties to look for, let’s look at what you need to know about NYC’s ultra-luxury real estate market. The number of closings rose sharply in the second quarter of 2023, a result of seasonality. April and May are the most robust selling months for the NYC housing

market.

Examining the market, there are a few causes for optimism as we enter the second half of 2023. Average and median sales prices have risen in recent months. The reduction in inflation bodes well for the city’s economy, including luxury real estate. Inventory is another excellent sign for luxury buyers: As of August 2023, over 250 properties were listed at $5 million and above in the Upper West Side.

Naturally, the market has cooled since the peak levels of activity we saw in 2021 and 2022. These statistics and data findings are indicators of NYC’s market cooldown since 2020, as several factors aid in foreseeing a demand slowing down and what spurred this change. Keying into why exactly Manhattan’s market is seeing a cool-down trend, a significant factor is increasing interest rates and the vast number of new developments in the area. The ultra-luxury market calls for new developments. When interest rates rise, monthly payments rise as well on new loans.

Manhattan has been in a “buyer’s market” since around September 2022, but what does this mean?

A real estate market is considered either a “buyer’s market” or a “seller’s market,” with the former being a descriptor of the current New York City real estate market. Whether the current market is considered the buyer’s or the seller’s indicates which party has the upper hand in the sale. In the case of NYC, Manhattan, and the Upper West Side, buyers are currently in that position. When it is a buyer’s market, the buyer has control over negotiations and can set the terms because there are more homes for sale than potential buyers.

When real estate is a buyer’s market, sellers tend to take below the asking price, cater to the buyer's desires, and offer better deals. This phenomenon goes hand-in-hand with a cooling market, as when the market is slower, there is more leeway for buyers to capitalize off of the advantages of high supply and low demand as sellers want to finalize the sale as quickly as possible.

Essentially, this means that the housing market is slowing down regarding the number of deals getting done, the prices at which trades are occurring, and overall buyer appetite. Traditionally, we see activity in Manhattan climax in the spring and then slow in the summer months each year.

The pandemic took us away from that seasonality for a time when the market virtually froze for most of 2020, only to explode in the second half of 2021 and the first half of 2022. That time after the pandemic saw record-setting activity levels as pent-up demand, attractive mortgage rates, and a strong stock market created an ideal buyer climate. That all changed around June of 2022 when interest rates began to rise, and headline after headline referenced rising inflation, a tumbling stock market, and foreign conflict. The result was a significant pullback in demand.

The Upper West Side of Manhattan continues to make a name for itself as one of the most luxurious neighborhoods in the borough. With so many advantages and amenities, it’s no wonder the Upper West Side real estate market is hot.

Simultaneously, real estate values in upstate New York remain high, with deficient supply and robust demand. Both New York State and City real estate markets favor the seller, and they are exceptions to the cooling market nationwide.

In Manhattan and Brooklyn, new development sales are beginning to dominate the market, especially in light of resales. Buyers prefer new development sales despite relatively high interest rates and the monthly payments that come with purchasing new development real estate.

In fact, ultra-luxury rentals have been flying in and off the market, demonstrating a potential upward turn in the housing market as the United States economy continues to recover from the economic recession of 2020 and 2021. While the market has been decelerating — beginning to shift in favor of buyers — the Upper West Side continues to dominate the ultra-luxury real estate market in New York City and Manhattan.

For those wishing to take on the luxury real estate market of The Upper West Side, having a reputable and knowledgeable real estate agent is essential in ensuring buyers save time, money, and hassle. Realtors know the ins and outs of the industry, allowing buyers and sellers to rely on their expertise to navigate the New York City luxury real estate market in the most efficient way possible.

Daniella Schlisser has over 22 years of experience in the Manhattan real estate market. She specializes in luxury real estate in specific NYC neighborhoods, ensuring her clients only receive the most exact knowledge for certain areas. Contact Daniella and her team to learn more about buying and selling in the ultra-luxury Upper West Side housing market.