Rising Luxury Costs and Brokerage Wars - What’s really scaring us this month
October 31, 2025
Hello & Happy Halloween.
This month, from a beautiful, slightly haunted-looking New England early-20th-century mansion. Designed in 1903 by architect William Cromwell Jr., this magnificent 12,000-square-foot country estate blends Italianate Renaissance Revival, Palladian, Neo-Gothic, and French Empire influences.
Inflation of all things...
This past month, Compass announced a $1.6B acquisition of Anywhere Real Estate (parent of Corcoran, Sotheby’s, and Coldwell Banker), creating the largest residential brokerage network in the U.S.
It’s a funny twist where Elliman, once the “big player”, has now (without really shrinking) become the boutique alternative. As the luxury segment becomes the dominant driver of activity, buyer access is becoming more concentrated — which is exactly why Compass moved to absorb Anywhere: control of distribution now matters as much as inventory. For Douglas Elliman, this shift is actually a tailwind — the premium end of the market increasingly favors expertise, curation, and brand distinction over mass-scale brokerage.
$3,000 is the new $2,000 per square foot: and luxury is the dominant segment.
After several years of price stagnation, Manhattan’s new development pipeline is re-emerging at a much higher baseline. Rising land costs, construction expenses, and elevated finishing standards have effectively reset the price floor for luxury inventory: where ~$2,000/SF was once standard entry pricing, $3,000+/SF is now the norm.
This shift is especially visible in Midtown East — historically not the city’s top-priced neighborhood — with projects such as 520 Fifth Avenue, 126 East 57th Street, and the upcoming 133 East 55th Street all launching at materially higher pricing than pre-2022 cycles. It’s a clear signal of both developer confidence and a new valuation era for top-tier condo living in NYC (In all fairness, building and delivering quality product for less, is no longer feasible).
Many say all of this depends on the upcoming mayoral election — but having lived here more than twenty years and having seen what this city has already weathered, I suspect NYC will do what it always does: adapt, reset, and rise. Don’t you?
Wishing you a great fall,
Ariel and the team
