Because of their financial resources, these buyers can afford some of the priciest real estate.
However, those homeowners tend to be in higher income brackets.
High earners well exceed that median, often buying properties worth $1 million and up.
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Market Shifts During 2018-2023
This period saw significant shifts.
In the late 2010s (20182019), the housing market was relatively stable with gradually rising prices.
Record-low interest rates in 20202021 fueled a homebuying boom, while higher rates in 20222023 cooled the market.
During 2021, as the city recovered from the worst of the pandemic, Manhattan saw record sales volume.
Upsizing vs.
Downsizing
Most wealthy buyers between 2018 and 2023 were upsizing or upgrading their homes.
In New York, the upsizing trend was especially pronounced during 20202021.
Downsizing did occur for some high-income households, particularly empty nesters and older retirees.
Upsizing, Downsizing, or Additional Homes?
Upsizing (Buying Larger Homes)
Upsizing was very common in this period, especially during 20202022.
Many high-income families in New York City chose to trade up for more square footage.
The pandemic intensified this desire: people wanted home offices, bigger yards, or more personal space.
This led to a surge in luxury suburban sales.
Downsizing (Moving to Smaller Homes)
While less common, some high-income households did downsize.
Typically these were older homeowners or couples whose children had grown up.
The ability to work remotely led many affluent city dwellers to seek country getaways or beach houses.
Nationally, demand for second-home mortgages jumped to record highs in 2020 and 2021.
Many of those buying second homes were high earners (often Gen X age).
Likewise, rural regions like the Hudson Valley and Catskills upstate saw unprecedented demand.
By 20222023, the vacation home trend cooled off somewhat.
In summary, from 2018 to 2023 high earners were primarily buying larger or additional homes rather than downsizing.
Even among high-income buyers, New York Citys home prices are a challenge.
By 2020 and 2021, we saw rollercoaster changes.
In 2020, when COVID-19 hit, many wealthy Manhattanitestemporarily left the city.
Rental vacancy in NYC hit a record high in 2021 (over 4.5%) as people moved out.
This exodus was evident in the property market: Manhattan sales and prices dipped in 2020.
But the decline was short-lived.
), parts of Brooklyn (Brooklyn Heights, Park Slope, Williamsburgs luxury waterfront condos, etc.
), and select areas of Queens.
Interestingly, a lot of high-end transactions in the city became all-cash deals.
This suggests that wealthy buyers who remained in the market in 2023 were extremely affluent.
Westchester and Hudson Valley: Once the pandemic hit, Westchester sawsoaring demand.
Many listings got multiple offers above asking.
Further north in the Hudson Valley, a similar story played out in 20202021.
Real estate agents described frenzied bidding wars on properties that previously might have sat on the market.
By late 2022 and 2023, as interest rates rose, the suburban and upstate markets started to cool.
The frenzy of bidding wars calmed down.
Even so, prices generally remained higher than pre-pandemic, and inventory stayed relatively low.
After the initial rush, the Hamptons market began to stabilize.
Overall, the Hamptons remained one of the most popular regions for high-income buyers throughout 20182023.
In these areas, home prices are much lower and households earning $500k+ are very rare.
But nothing as dramatic as the downstate region.
Manhattans high-end market was somewhat insulated initially, and the outer boroughs saw prices drop first.
By 2010 home values in NYC had been pushed to what would now seem bargain levels.
For example, the median NYC sale price in early 2010 was around $384,000 much lower than today.
Starting around 2013, the market recovered strongly.
Market Saturation by Mid-2010s
By around 20152017, the NYC luxury market showed signs of over-supply.
Developers had built many high-priced condos, and not all were selling quickly.
High-income buyers had plenty of choice and often negotiated prices down on expensive units.
Economically, 20082017 saw a slow recovery in jobs and incomes.
By the mid-2010s, the stock market was rising significantly, which boosted the wealth of the rich.
However, nothing in that decade matched the sudden pandemic-driven relocation wave of 2020.
Thats roughly a 26% increase over the whole decade (not accounting for inflation).
So the recent period had faster growth, largely due to the 20202021 surge.
Regions like the Hudson Valley and the Hamptons saw record spikes in sales and prices due to this influx.
Compared to the previous decade, the 20182023 period was more erratic but also saw faster short-term growth.
