New data released today by Brown Harris Stevens Development Marketing paints a striking picture of New York City's new development market heading into the second half of 2026. Contracts signed for new condos in Manhattan asking $10 million or more nearly doubled in Q2 2026 compared to the same period last year — rising from 21 to 38 — marking the second consecutive quarter where the high-end market made up roughly half of all new development deal volume. At the same time, overall contract activity in the quarter fell 17% year over year to 311 deals, and analysts point to dwindling new development inventory as the primary reason the broader market has stalled.

That split — record luxury activity running alongside a broader slowdown — is the defining story of NYC's new development market right now, and it reflects dynamics that extend well beyond any single quarter's numbers.

What Drove the Luxury Surge

The concentration of activity at the top of the market didn't happen by accident. It's the product of a specific set of conditions that have been building throughout 2025 and into 2026. During the first 16 weeks of 2026 alone, there were 126 sales above $10 million in Manhattan — a 40% year-over-year increase — driven in significant part by Wall Street bonuses hitting a new high with an average payout of approximately $250,000. "People made a lot of money last year, in the last couple of years, on Wall Street," said Donna Olshan of Olshan Realty. "The rich got really, really rich."

That wealth concentration among Manhattan's core luxury buyer demographic — finance professionals, international capital, and ultra-high-net-worth individuals seeking a stable store of value — has kept the top end of the market moving at a pace that is disconnected from the mortgage rate sensitivity that affects everyone below the $4 million tier. Contracts signed for new condos asking $10 million or more made up 55% of total new development contract volume in Q1 2026 — the 56 contracts signed in Q1 were the highest for any period this decade, up 87% from Q1 2025, and nearly triple the ten-year average. "Those two factors — Mamdani's tax proposals and the war in Iran rattling the economy — get squashed when you see so many $10 million plus properties transacting," said BHSDM president Stephen Kliegerman.

Specific buildings are driving outsized activity. Related Companies' The Strathmore at 400 East 84th Street and Two Trees' One Domino Square were among the top-selling buildings in Q2, with One Domino Square scoring a $7.8 million contract on a penthouse in June that would be a sponsor sale record for Williamsburg if it closes at that price. An $80 million deal at 80 Clarkson, signed in June but not included in the BHSDM tally, underscores just how large individual transactions have gotten at the very top.

Why the Broader Market Is Slowing Despite Strong Demand

The 17% overall decline in Q2 new development contracts isn't a demand story — it's a supply story. New development analysts have cited the city's dwindling new development inventory as the main culprit behind the lackluster broader market. For units asking $3 million or less, months of remaining supply sits near just four months — an indication that weak contract numbers for less expensive new buildings are a function of supply issues, not weak demand. "We need some new inventory to see what the state of the market is," said Robin Schneiderman of BHSDM, adding that when well-priced new condos enter the market they "get absorbed at a healthy pace."

That supply constraint at the lower end of new development is a direct consequence of the pipeline dynamics that have played out over the last several years. The 421-a tax abatement expiration in 2022 halted many projects, the replacement 485-x program came with more onerous affordability requirements, and construction costs have risen enough to make sub-luxury new development financially difficult to pencil in most Manhattan and prime Brooklyn locations. The result is that the new development pipeline has skewed heavily toward high-end product — which is exactly what the current data reflects.

Brooklyn and Queens told different versions of the same story in Q2. Brooklyn saw contract signings slip slightly from 230 to 222, but contract volume rose to $450 million from $391 million as buyers gravitated toward luxury offerings. Supply expanded in the borough as 331 new units launched outpaced contracts signed. In Queens, contract signings were down by more than half to 40, as buildings that had launched sales in prior years — like Vesta and The Austin — have been the main drivers of activity without significant new launches to replace them.

The Pied-à-Terre Tax Question Hanging Over the Luxury Market

The remarkable resilience of the $10 million-plus market is happening against a backdrop of active political pressure that most analysts expected would suppress it. Mayor Mamdani's proposed pied-à-terre tax — which would apply to non-primary-residence properties valued at $5 million or more — has drawn fierce opposition from the real estate industry and high-profile figures including Ken Griffin, who has publicly cited the tax as a reason to direct investment toward Miami rather than New York. Despite those warnings, high-end real estate sales in Manhattan continued to increase even as the proposed tax dominated headlines, with 133 contracts signed for apartments priced at $4 million or more between April 14 and May 10 — compared with 130 during the same period last year, with total dollar volume up 10% to $1.12 billion.

The market's refusal to respond to the tax threat the way critics predicted reflects something consistent about how ultra-luxury buyers in New York behave: they buy when the product is right, regardless of the political noise around it. That same dynamic is playing out in the ultra-luxury rental market, where demand for high-end properties has become "off-the-charts," with owners of properties asking $10 million or more routinely receiving rental inquiries before sale inquiries — and tenants offering well above expected rates to secure turnkey trophy homes.

What This Means for the Market Going Forward

The second half of 2026 sets up as a period where the new development market's performance will depend heavily on whether new well-priced inventory enters the market at the sub-$3 million tier. At the top, demand is demonstrated and supply is the constraint — new launches in prime locations absorb quickly when they hit the market at credible prices. Below that tier, the same supply constraint that is limiting activity now is unlikely to resolve quickly given the development economics that have reshaped the new construction pipeline over the last three years.

For buyers in the new development market, the current environment offers a counterintuitive opportunity at the upper end of the co-op and resale condo market, where the supply constraint affecting new development hasn't fully translated into comparable price pressure. Co-ops in particular are trading at a 20–30% discount to comparable condos on a price-per-square-foot basis, with contracts down 15% year over year — giving buyers who can navigate the board approval process access to a less competitive segment of the market than anything in the new development pipeline.

For investors tracking where capital is moving in New York City's residential market, the Q2 data confirms what Q1 suggested: the smart money at the top is not deterred by political headwinds, the middle of the new development market is supply-constrained rather than demand-weak, and the outer boroughs — Brooklyn especially — are seeing luxury demand rise even as overall contract volume moderates. At Dover Property Group, we track these dynamics across the city and across price points because they directly shape where the best opportunities are and where the risks are concentrating. If you want to talk through what the current new development picture means for your portfolio or acquisition strategy, our team is glad to help.

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Sources: The Real Deal — Luxury Market Leads NYC's New Dev Market in Second Quarter · The Real Deal — Luxury New Development Deals Climb to 10-Year High Q1 2026 · The Real Deal — NYC's High-End Buyers Keep Leverage Despite Sales Boom · CNBC — Manhattan Luxury Real Estate Sales Rise Despite Pied-à-Terre Tax · The Real Deal — Why NYC's Ultra-Rich Are Renting Apartments · DeFalco Realty — Manhattan Real Estate Market 2026

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About the Author
Dover Property Group is a New York City property management firm working with building owners and tenants across all five boroughs. Our team tracks market conditions, compliance requirements, and neighborhood-level trends to help owners protect their assets and tenants navigate one of the most complex rental markets in the country.