Some Manhattan Sellers Are Losing Money on Properties Held for a Decade as Brooklyn Demand Strengthens

Written by:

Alejandra Rodriguez

Date:

09 Sep 2026

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In most American markets, holding a property for ten or twelve years builds a cushion of equity. In Manhattan, that assumption no longer holds across large segments of the market, according to Nikolay Afanasyev, Founder & CEO of CITY SPHERE Property Group, a boutique brokerage covering Manhattan and parts of Brooklyn. Rising building carrying costs, driven by inflation, labor, and mandated efficiency upgrades, have eroded gains to the point where some long-term owners are selling at or below their purchase price. One recent apartment sale in a prime Manhattan location closed approximately 25% below the sellers’ original purchase price, with high and rising building carrying costs contributing to weaker buyer demand and resale value.

That dynamic is reshaping buyer and seller behavior across Manhattan and parts of Brooklyn, creating a market where demand is migrating across the East River and where the gap between move-in-ready inventory and everything else has become the defining feature of the sales landscape.

Transactions Are Shifting From Manhattan to Brooklyn

Contract activity has increased in both Brooklyn and Manhattan, but Brooklyn has recently been growing faster. Afanasyev attributes part of the shift to lifestyle preferences, but also to a tax policy affecting higher-end buyers. The new pied-à-terre tax on qualifying non-primary residences may also be influencing some higher-end buyers to consider lower price points or other boroughs.

“I think there’s a chance that more people are choosing the lifestyle and conveniences of Brooklyn over Manhattan, contributing to longer days on market in parts of Manhattan and faster absorption in parts of Brooklyn.” Afanasyev says,

The result is a bifurcated market: Manhattan’s luxury segment above $4 million remains active, while buyers in the under-$1.5 to $2 million range have grown more selective. They want updated units with manageable carrying costs, and that inventory is scarce.

The Condition Gap Is Defining What Sells

Across both boroughs, the market has split along a simple line: move-in-ready properties attract demand, while those needing renovation linger. Based on Afanasyev’s analysis, roughly a third of Manhattan listings do not sell during their initial listing period and are eventually relisted.

“People are more conscious. They want something that’s fairly updated, not very high carrying costs,” he says. “And that type of inventory is fairly scarce. There’s a lot of inventory that needs work, and it’s a little bit hard to sell it.”

The renovation challenge compounds the problem. Labor costs in New York City have risen, and buyers who might once have taken on a project are now factoring in carrying costs on top of construction budgets. For sellers sitting on outdated units, the math has shifted, and more are agreeing to concessions or price reductions as a result.

Afanasyev attributes the growing willingness to negotiate to sustained economic uncertainty, persistently elevated interest rates, slower economic growth, and geopolitical instability. Some sellers initially expected conditions to be temporary, but persistence has forced adjustment.

Where Activity Is Concentrated

Not every neighborhood is cooling equally. West Village stands out in Manhattan for its structural supply constraint; its limited ability to build vertically keeps inventory capped while demand remains high. In Brooklyn, Cobble Hill, Boerum Hill, and Brooklyn Heights are among the strongest-performing neighborhoods.

The rental market tells a different story than sales. Rental values have increased significantly across many Manhattan neighborhoods, creating a market that is simultaneously overheating on the rental side and cooling on the ownership side.

“I usually suggest that every neighborhood, every street and every building should be approached differently,” Afanasyev says. “You can be on the same block, two buildings, and they can be selling for a completely different price.”

What Investors Should Consider

For investors looking to deploy capital, Afanasyev recommends focusing on multifamily properties with free-market rents, where cap rates have risen, and prices have come down. For condo or co-op purchases, he advises either buying updated units or negotiating significant discounts on properties needing renovation, because the cost and time to renovate in New York City remain substantial.

First-time buyers and those stretching to maximize space are increasingly looking beyond Manhattan toward New Jersey, Westchester and Long Island, where they may encounter fewer building-specific liquidity and debt-to-income requirements than in many Manhattan co-ops.

Why Manhattan Still Draws Buyers Long-Term

The forces sustaining Manhattan’s underlying demand have not weakened, even as near-term transaction activity has slowed. Afanasyev points to three factors: The New York metro area now has a larger tech-talent workforce than the San Francisco Bay Area—394,300 versus 375,730, according to CBRE; access to top universities, including NYU, Columbia, and Baruch, that supply employers with talent; and cultural density. New York City also accounts for a disproportionately large share of national employment across cultural and creative industries.

That combination continues to draw people into the city, which supports the case for resilient long-term demand even as current conditions favor buyers.

“Now is an opportunity to get discounts,” Afanasyev says. “You have an opportunity to purchase property at a discount compared to what people were buying it for 10-plus years ago in many segments.”

For buyers who believe in that long-term trajectory, the current moment offers entry points that did not exist during the previous decade. For sellers holding outdated inventory with rising carrying costs, some sellers could face additional pressure if elevated carrying costs and economic uncertainty persist, particularly if interest rates and economic uncertainty persist through the next year.

About the Expert: Nikolay Afanasyev is Founder and CEO of CITY SPHERE Property Group, a boutique brokerage covering Manhattan and parts of Brooklyn.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.