The New York City luxury residential market has changed significantly since the pandemic, with buyers seeking different features and developers facing new obstacles. These shifts have opened opportunities in outer boroughs, while traditional Manhattan markets struggle with slower sales and increased caution among affluent buyers.
A Personal Experience Shapes a New Approach
Navigating New York’s complex real estate process is especially challenging for international buyers. For Mukul Lalchandani, Managing Broker at Undivided, this challenge became personal when his own family’s overseas property purchase in New York turned into a costly ordeal.
“My family had bought a property in New York City from overseas many years ago, and the experience was terrible,” Lalchandani recalls. The transaction required two mortgages, with the second carrying a 16% interest rate. After a six-hour closing, the agent “walks in with his fur coat, picked up a six-figure check, and walks right out, does not apologize.”
This experience influenced Lalchandani’s professional philosophy. After 15 years as an agent at various firms, he launched Undivided in 2023 to guide international clients through the process. “I look at myself as an advisor to help bridge the differences between [international clients] and the local community and help to make the deals happen,” he says.
Development Pipeline Slows as Costs Rise
New construction, once a major driver of New York’s luxury market, is now hampered by rising interest rates and construction costs. Since 2022, borrowing has become more expensive for developers, and material costs have climbed.
“Right now to build, it’s very expensive. It’s not lucrative or profitable for many developers,” Lalchandani explains. “The pipeline has slowed down considerably. There are still smaller developments coming and popping up all across the city, but there’s certainly no trend happening or no real up-and-coming neighborhoods.”
This shift marks a departure from pre-pandemic years, when new developments were launching in multiple neighborhoods and driving local growth. Unless borrowing costs come down, Lalchandani expects the pace of new projects to remain slow.
Buyers Want Flexible, Lifestyle-Oriented Homes
The pandemic has changed what luxury buyers expect from their homes. Before 2020, most focused on traditional amenities like doorman service, laundry, and rooftop access. Now, buyers want features that support remote work and private living.
“Consumers want a home office space where they can convert a room for Zoom calls, like we’re doing now,” Lalchandani notes. “A lot of buyers want outdoor space. They want homes that cater to their lifestyle that has changed in the last few years.”
High-net-worth buyers are also requesting in-home gyms, preferring private fitness spaces over shared amenities. “They want a room they can convert into a gym. So like Peloton became a very popular thing during COVID. Now, they just want to have a gym in their home. They don’t want to have to leave the home.”
Lalchandani’s clients—often professionals in technology, medicine, finance, or consulting—are especially focused on these features. They are also interested in eco-friendly upgrades and smart home technology, aiming to balance modern amenities with value.
Regulatory Barriers Add to Market Uncertainty
New York’s complex regulatory environment adds further challenges for developers and buyers alike. Projects must secure approvals at the state and city levels, obtain building permits, and receive clearance from the Attorney General before closing.
“Any one of them that holds it back will delay the project,” Lalchandani says. “So developers can only estimate a closing time frame, but they cannot guarantee because it’s out of their control.”
This uncertainty can be a deal-breaker, especially for out-of-state and international buyers not used to such delays. Lalchandani recounts losing a deal because a buyer was unwilling to accept an estimated rather than fixed closing date, even though the project closed within the expected timeframe.
New Commission Rules Change How Agents Work
Recent legal settlements now require buyer agent commission agreements, prompting initial concerns among agents. While some newer agents worried about explaining commission payments to buyers, experienced professionals have found that the new rules clarify expectations and improve compensation.
“Now that the buyer’s agent has these consultation conversations with the buyer, it helps to weed out the buyers that are not serious and just looking versus the ones that are actually ready to get a deal done,” Lalchandani says.
He also notes that the new rules have allowed him to negotiate better commission terms. “I’m actually able to get more commission now than I was before, because now I put it in the contract that I have to get my guaranteed 3% commission,” he explains. Previously, agents often had to accept whatever commission the seller offered.
Outer Boroughs Outperform Manhattan
While luxury sales in Manhattan have slowed, outer boroughs are attracting more buyers looking for value and space. Lalchandani points to Brooklyn neighborhoods south of Prospect Park—such as Flatbush, Prospect Lefferts Gardens, Windsor Terrace, and Kensington—as well as Long Island City and Astoria in Queens, and Mott Haven in the Bronx, as areas where luxury sales are strong.
“Long Island City in Astoria, in Queens is also doing really well. And in a part of Bronx, which is above Manhattan, neighborhood called Mott Haven, it’s also growing a lot,” he adds.
These neighborhoods provide high-end amenities without the price premiums of Manhattan, attracting buyers who want luxury finishes and features while remaining cost-conscious.
Political Concerns Are Overstated
Recent political changes in New York have made some luxury property owners nervous, fearing that new leadership could negatively impact the high-end market. However, Lalchandani believes these concerns are exaggerated.
“He’s not going to touch anything to do with free market homes, luxury condos are not going to be affected,” Lalchandani says, referring to current policy discussions. “This is really going to affect rent stabilized homes, lower income housing, and his desire to build more housing, but it’s not going to affect homes that my clients have.”
For most luxury buyers and owners, policy changes are unlikely to impact property values or sales.
Technology Drives Market Education
Lalchandani has invested in creating YouTube videos to educate clients, seeing video as a key tool for reaching today’s buyers. Unlike platforms focused on quick entertainment, YouTube allows for more in-depth, educational content.
“If a consumer is searching for certain key terms that are specific to my target market, and they keep seeing my videos show up again and again, they will immediately connect me with what they’re looking to purchase or sell,” he explains.
This approach reflects a broader trend: luxury buyers now use digital research to vet both properties and agents, expecting detailed information before engaging in a transaction.
What’s Next for New York’s Luxury Market
New York’s luxury market is adjusting to post-pandemic realities. Buyers are focused on flexibility, technology, and lifestyle amenities, while Manhattan faces slower absorption and the outer boroughs attract value-focused clients.
For real estate professionals, success depends on understanding these new preferences and navigating the city’s regulatory complexity. As Lalchandani’s experience shows, combining market expertise with a commitment to client advocacy is critical for building trust and closing deals.
Today’s market rewards buyers and agents who are flexible, well-prepared, and realistic about both timing and location. Recognizing these new dynamics is essential for anyone seeking to succeed in New York’s changing luxury landscape.
