NYC Real Estate Outlook in 2026
NYC Real Estate 2026: What Industry Experts Are Predicting
The NYC real estate market enters 2026 at a crossroads after adjusting to post-pandemic conditions for several years. Forecasted by experts, 2026 will be characterized as a year of movement —not significant shifts —as opposed to previous years. Here’s what both data and experts say we can anticipate.
Prediction 1: Homes Will Sell Faster, But Not in a Frenzy
Street Easy reported homes entered into contracts in 2025 had spent a median of 68 days on the market, which is down 4 days from 2024. That trend is anticipated to continue in 2026.
However, as homes move more quickly, they’ll not be sold in the frenzied manner as seen in 2021-2022. The most interesting dynamic here is that the 35,048 homes were newly listed in NYC from January through October 2025 —the highest number since 2022 — while there’s more inventory available, along with faster sales, the market appears to be moving toward a more stable rather than a supply-critical environment.
Additionally, Zillow predicts that mortgage rates will stay above 6% until the end of 2026, which will keep buyer activity moving forward, but will also prevent the frenzied competitive bidding wars experienced during the 2021-2022 time frame.
Prediction 2: Manhattan Median Rent Will Exceed $5,000
While the national rental market is expected to slow down, the NYC rental market is experiencing a very different reality.
Miller Samuel and Douglas Elliman released their November 2025 rental report and indicated that median rent exceeded record highs in Manhattan in 10 of the past 11 months.
Based upon historical trends, real estate analyst Romain Sinclair expects median rent in Manhattan to exceed $5,000 in 2026 (approximately a 5% increase from median rent in November 2025), and that Brooklyn’s median rent will exceed $4,000.
The numbers show that since the pandemic, NYC has added thousands of new rental units; however, that amount of new rental stock has not even begun to address decades of rental housing shortages that date back to the 1990s.
The 2023 citywide vacancy rate was 1.4%, which is the lowest since 1968. As well, private sector employment is at historic highs, and NYC has attracted double the amount of recent college graduates than any other U.S. city between 2021-2024.
More individuals will be competing for a smaller number of available rentals, resulting in a 4.8% rise in asking rents from January through October 2025.
Prediction 3: Co-Buying With Friends Will Become Mainstream
As we mentioned previously, a 2025 Street Easy Survey revealed that 56% of prospective NYC homebuyers plan to purchase a home with a co-buyer. The percentage of prospective buyers who intend to purchase a home with friends, and those planning to purchase a home with relatives beyond a spouse, break down as follows: 9% with friends, and 6% with relatives.
Co-buying is not merely a trend; it makes sense given the present-day realities of persistently high borrowing costs. Multifamily homes with two or three separate units have become increasingly appealing to buyers looking to split closing costs and mortgage payments, yet maintain their own individual living spaces.
Demographically, the median age of NYC renters has risen from 45 to 47 between 2013 and 2023. Additionally, baby boomers account for 22% of prospective homebuyers — the second largest demographic behind 30-39 year olds — indicating that multigenerational co-ownership will become increasingly common.
Prediction 4: New Construction Rentals Become the Better Deal
Although somewhat counterintuitive, new apartment buildings are increasingly more affordable than existing units.
Between 2019 and 2025, rents in new construction rose 20.0% versus 23.1% in pre-war units. Among large rental buildings with 50+ units that were completed in the last three years, 61% currently include a resident lounge (versus 56%) and 63% feature a rooftop deck (versus 47% in older construction).
Many newer developments provide incentives such as one or more months of free rent to quickly lease available units. Although temporary, these incentives will help bridge the affordability gap for renters in the short-term.
Prediction 5: Office Buildings Will Outpace Residential Conversions
The office-to-residential conversion narrative garnered so much media attention; however, 2026 may produce a different reality.
Between January and October 2025, Manhattan recorded 30.2 million square feet of office leasing, representing a 9% increase over the prior year.
The overall availability rate dropped to 15.8% — its lowest level in more than four years. Trophy office leasing is presently running 36% ahead of pre-Covid averages.
Although the NYC Comptroller’s office has identified approximately 15 million square feet of obsolete office space for conversion to approximately 17,400 apartments, the discount needed to convert these obsolete office buildings into economically feasible residential properties is quite substantial.
Based upon this analysis, real estate analyst Romain Sinclair anticipates that developers will submit plans for more luxury office buildings (based on total square footage) than residential conversion projects in 2026.
In certain areas of the city, the net operating income per square foot achievable for office properties will exceed that for residential, and therefore developers will respond accordingly.
Prediction 6: Retail Sales Will Hit Record Highs
Retail in NYC enters 2026 with surprising momentum. Tourism to NYC reached around 64 million visitors in 2024, which is almost the same as the 2019 record of 66.5 million visitors. Retail leasing in Manhattan reached 3.0 million square feet for the first nine months of 2025.
The numbers do not lie: retail sales tax revenue collected in NYC has grown 32% since 2019, and reached $10.3 billion in 2025, according to the NYC Economic Development Corporation. NYCEDC forecasts retail sales tax revenue collected in NYC to grow to $10.7 billion in 2026.
There is some unevenness to the recovery — office-dominant neighborhoods continue to experience storefront vacancies due to hybrid work arrangements — however, there is no question about the upward trajectory of consumer spending.
Prediction 7: Mayor Mamdani's Agenda Shapes the Market
Mayor Zohran Mamdani took office in January 2026 with a comprehensive agenda focused on supporting tenants and promoting housing production. He immediately signed Executive Orders to protect tenants and expedite the process for constructing housing, visited a rent-stabilized tenant being harassed by her landlord, and announced the city would intervene.
Industry insiders anticipate that while Mayor Mamdani campaigned on freezing rents, he will ultimately fail to implement a rent freeze. Nevertheless, his administration will pursue all other avenues possible to limit rent growth and protect tenants, resulting in uncertainty for landlords and investors alike.
Prediction 8: Land Prices Get Complicated
Land values are entering a complex phase in NYC. Approximately 100% of the multifamily housing market in NYC is now governed by rent cap laws — 45% of which fall under the Rent Stabilization Law, and the balance of 55% falls under Good Cause Eviction.
In addition, the recently implemented 485-x tax abatement program (which replaced the lapsed 421-a) offers a strong incentive for developers to build projects consisting of fewer than 100 units, thereby avoiding wage mandates applicable to larger projects. This will result in a wide disparity in pricing for land in NYC based upon project size as follows:
Land for sub-100-unit buildings will become easier to sell, with prices rising from 2023/2024 figures
Land suitable for 198+ units (two buildings of 99 units each) may see renewed interest
Land for 100-197 unit projects will likely see price declines
Land in Qualified Census Tracts eligible for affordable housing funding may command premium prices
The Bottom Line
2026 will not involve dramatic price reductions or a boom cycle. Rather, it will be a year of strategic positioning. Timing and preparation will be crucial factors in determining success.
The fundamentals of the NYC real estate market remain solid: limited inventory, persistent demand, record employment levels, and a city that continues to attract young talent at rates unlike any other city nationwide.
Understanding these five distinct predictions — faster sale cycles, increasing rents, non-traditional forms of ownership, and shifting policies — provides a clearer vision of the future than simply relying on hope, or waiting for a crash that may never occur.
Sources:
Lee, Kenny. "5 NYC Housing Market Predictions for 2026." StreetEasy, 4 Dec. 2025, streeteasy.com/blog/2026-nyc-housing-market-predictions.
Miller Samuel and Douglas Elliman. "November 2025 Rental Report." Miller Samuel, Nov. 2025, millersamuel.com/files/2025/12/Rental-11_2025.pdf.
New York City Comptroller's Office. "Office-to-Residential Conversions in NYC: Economics and Fiscal Estimates." NYC Comptroller, July 2025, comptroller.nyc.gov/reports/office-to-residential-conversions-in-nyc-economics-and-fiscal-estimates.
New York City Economic Development Corporation. "State of the NYC Economy 2025." NYC EDC, Dec. 2025, edc.nyc/sites/default/files/2025-12/NYCEDC-2025-State-of-NYC-Economy_12-12-2025.pdf.
Sinclair, Romain. "NYC Real Estate Predictions for 2026." Romain Sinclair's NY Multifamily Newsletter, 5 Jan. 2026, rsinclair.substack.com/p/nyc-real-estate-predictions-for-2026.
Zhao, Chen, and Daryl Fairweather. "Redfin's 2026 Predictions: Welcome to The Great Housing Reset." Redfin, 2 Dec. 2025, www.redfin.com/news/housing-market-predictions-2026.
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