New York City’s new development market is expected to face a significant inventory shortage in 2026. While some recent projects have sold well and maintained pricing, the pipeline of new buildings for buyers to tour is shrinking due to high financing costs and fewer opportunities for site assemblage. This trend is anticipated to continue into next year, according to data from new development teams and city analysts.
In Manhattan, the number of unsold units dropped to 3,600 in the second quarter of this year—a 10-year low—according to Corcoran Sunshine Marketing Group. Only five additional buildings are projected to deliver a total of 245 units in Manhattan by the end of this year, as reported by Brown Harris Stevens Development Marketing.
“It’s surprising to me that it’s taken so long for so many people to actually catch on, because this has been in the making for quite some time,” said Kelly Mack, president of Corcoran Sunshine Marketing Group.
Daniel Pupke of Reuveni Development Marketing noted that the market is experiencing a lull in inventory delivery. “We’re in between two eras of cycles,” he said. The first era followed the pandemic, when developers quickly acquired parcels with low-cost financing and brought successful projects to market over the last 18 months. However, rising interest rates heading into 2023 paused much of this activity unless contracts and financing were already secured.
Robin Schneiderman, managing director at BHSDM, identified available equity as a major factor limiting new project launches: “The biggest factor in why we have less new projects today on the market is available equity. That, to me, is what sort of drives the market overall.”
The reduction in equity has coincided with higher land prices and regulatory changes from the 2019 Housing Stability and Tenant Protection Act, which made converting rental buildings into condominiums more challenging.
From mid-2025 through year-end, only about 1,450 units are expected to come onto the market annually—a decline of nearly 29 percent compared with historical averages. Additionally, sales of new developments outpaced project launches by 60 percent this year.
One exception is Manhattan’s Upper East Side, which is forecasted to bring more units than usual through late 2026. Related Companies’ conversion project at The Strathmore (400 East 84th Street) will add 144 units priced below $1,800 per square foot—a rarity amid rising construction costs. Mack explained that “with new projects harder and more expensive to build and finance, most new projects are coming in at higher price points than we’ve historically seen.” She added that average annual deliveries for sub-$1,800 per square foot units will drop by over 60 percent through late 2026.
By contrast, development opportunities on the Upper West Side are scarce; only about 30 new units are expected there through late 2026. According to Mack, “Across the park, the Upper West Side is bereft of development opportunities.”
Other large upcoming projects include Rotem Rosen’s Malabar Residences (126 East 57th Street), set for sales launch this year but recently losing its sales director; Brodsky Organization and Sorgente Group’s planned condo conversion at the Flatiron Building; Grid Group’s boutique Chelsea building; Elad Group’s condo conversion at 419 Park Avenue South; and Continuum Company’s project at 26 East 35th Street.
Downtown developments remain focused on boutique offerings catering to sustained buyer demand—such as Grid Group’s Chelsea project or recent quick-selling properties like The Katharine.
Brooklyn faces similar constraints but on a smaller scale: while nearly 1,000 units are planned next year (well above its historical average), most projects are small-scale brownstone conversions or modest ground-up developments averaging just 17 condos each.
Projects like Charney Companies’ upcoming Fort Greene building (182 units) and Urban Development Partners’ Downtown Brooklyn site (71 units) illustrate ongoing activity outside Manhattan.
With limited competition expected for several years ahead due to reduced launches—and hundreds of unsold condos remaining at properties such as One Wall Street or The Greenwich—existing inventory may benefit from increased attention from buyers.
Pupke believes conditions may soon shift: “I think that if you today presented a B+ or better site with views, you could be extremely successful if you deliver in three to five years.” He noted an uptick in developer acquisitions after a period marked by inactivity: “You wouldn’t see action following the conversations that were happening… Speaking to the same groups, you’ll read three months later that the site closed.”
Despite these prospects for eventual recovery, Mack cautioned against expecting a swift turnaround: “It’s going to take at least five years to turn that picture around,” she said.
