Listen to What the New York City Multifamily Market Is Trying to Tell You

Markets don’t turn when pricing bottoms. They turn when people start doing deals again.

That’s the real story buried inside New York City’s multifamily numbers coming out of the fourth quarter of 2025. On the surface, the data looks contradictory. Transaction volume rose meaningfully, while total dollar volume pulled back. Average deal size shrank. If you’re only watching pricing metrics, it’s easy to conclude the market is still stuck in neutral.

But, if you’ve lived through enough cycles in New York, you know better. Velocity always comes first. Pricing follows later.

In the fourth quarter, New York City recorded 286 multifamily transactions encompassing more than 6,600 units — a 15 percent increase quarter-over-quarter and nearly 35 percent year-over-year in unit count. That kind of activity doesn’t happen in a market that’s frozen. It happens when buyers and sellers finally start agreeing on reality.

What we’re seeing right now isn’t weakness. It’s repricing.

Total dollar volume fell roughly 31 percent from the third quarter, but that decline had very little to do with demand and everything to do with composition. The prior quarter was inflated by a handful of oversized, institutional-grade trades. Strip those out, and the fourth quarter tells a far more important story: Deals are getting done again, just at today’s check sizes and today’s underwriting.

This is exactly how recoveries start.

After two years of capital market whiplash — rising rates, regulatory uncertainty, lender pullback — participants didn’t need clarity on where prices would be in 2028. They needed confidence that the bid/ask spread could finally close. The fourth quarter showed that it can.

The strongest signal came from large-scale assets. Properties that we track with 20 or more units saw transaction counts jump more than 24 percent quarter-over-quarter and over 66 percent year-over-year. That doesn’t happen unless institutional and quasi-institutional capital is comfortable underwriting New York risk again. They may not be paying 2021 pricing, but they’re very much back in the game.

At the same time, smaller and mid-market transactions continued to provide liquidity across the boroughs. Manhattan posted more deals but far fewer mega-trades, driving dollar volume down sharply while activity ticked up. Brooklyn rebounded meaningfully, with dollar volume surging over 34 percent quarter-over-quarter, led by renewed interest in larger properties. Queens and the Bronx, meanwhile, continued to attract capital priced out of Manhattan and core Brooklyn, with large-unit deals dominating activity.

The takeaway is simple: Capital isn’t sitting on the sidelines anymore. It’s just moving with discipline. That distinction matters heading into 2026.

Historically, New York multifamily cycles follow a familiar pattern. First, transaction velocity increases as buyers recalibrate expectations. Then pricing stabilizes as comps form. Finally, once confidence returns to the debt markets, cap rates compress — often faster than people expect.

Right now, we’re firmly in Phase 1.

The ingredients for Phase 2 are already lining up. Supply remains constrained, with new construction starts at multi-decade lows. Regulatory uncertainty has largely shifted from “unknown” to “known,” allowing investors to underwrite risk instead of guessing at it. Rental fundamentals across Manhattan, Brooklyn and northwest Queens remain resilient, with tight vacancy and steady rent growth supporting cash-flow assumptions.

And, importantly, global capital is re-risking New York.

We’re seeing foreign and all-cash buyers re-emerge not just in Manhattan, but across the boroughs, targeting well-located free-market and mixed assets. These buyers don’t need rates to drop another 100 basis points to act. They’re underwriting long-term fundamentals — and they view today’s basis as compelling relative to replacement cost and global alternatives.

That’s why the fourth quarter’s surge in unit volume matters more than the headline decline in dollar volume. Deals getting done at scale create price discovery. Price discovery creates confidence. Confidence brings competition.

By the time pricing metrics start flashing green, the window will already be narrowing. Looking ahead to 2026, the opportunity set will reward early movers — both buyers and sellers — who understand where we are in the cycle. Buyers who lock in basis before cap rate compression shows up in the comps will look prescient in hindsight. Sellers who prepare assets now, price to today’s market, and bring clarity to their story will benefit from a deeper buyer pool than we’ve seen in years.

The mistake would be waiting for perfect conditions. New York never gives you a bell at the bottom or the top. It gives you signals. The fourth quarter of 2025 sent a clear one: The market is moving again. Velocity is back. Pricing will follow.

What matters: Deal activity is the leading indicator, not pricing. The last three months of last year confirmed that New York City multifamily has entered the early innings of its next cycle — and 2026 will favor those who act before the crowd does.

Lev Mavashev is the founder and principal of Alpha Realty, a New York brokerage focusing on multifamily.