How are escalating common charges and insurance costs affecting demand for luxury condos versus co-ops in New York City, and where are buyers drawing the line?
Omer Sultan
DANIEL GALE SOTHEBY’S INTERNATIONAL REALTY
WILLIAMSBURG
Escalating common charges and insurance premiums — which have surged by over 20% in some markets — are fundamentally shifting the NYC luxury value proposition. While luxury condos typically command a 10–30% pricing premium for their flexibility, fewer restrictions, and ease of resale, purchasers are beginning to scrutinize the underlying health of building budgets and question their long-term sustainability as carrying costs balloon. On the other hand, co-ops are experiencing a quiet resurgence as value plays. Since co-op maintenance fees include property taxes and operating expenses, the post-tax impact often feels more manageable. However, purchasers are drawing a hard line at buildings with rising underlying mortgage rates, insurance costs, and assessment fatigue, which can begin to narrow the price advantage co-ops traditionally hold. At the end of the day, purchasers are focusing less on fixed dollar amounts and more on perceived value and predictability. Transparent budgets, healthy reserves, and a clear explanation for increases can preserve demand, while ambiguous finances or sharp year-over-year surges are increasingly becoming dealbreakers — even in the luxury market.
Dennis Cusack
SERHANT.
SOHO
Buyers in today’s market are far more focused on monthly carrying costs than they were just a few years ago. Insurance costs alone illustrate why: it used to represent about 3-5% percent of a building’s budget, but in many NYC buildings today it’s closer to 8-10%, and those increases flow directly into higher maintenance and common charges. Amenities also play a role. In Manhattan, a full-service condo with a doorman and extensive amenities can easily run 50% higher in common charges than a simple non-doorman building. Amenities don’t just increase staffing costs; they can also significantly increase insurance costs, particularly when features like pools, gyms, and spas are involved. Buyers still want services and amenities, but they are scrutinizing which ones they really need. Do we really need a rock-climbing wall? Co-ops face an additional dynamic. If property taxes rise across the board, co-ops feel the impact more because the city taxes them as if they were rental buildings, which often results in higher effective tax rates. When those taxes increase, the higher building-level burden flows directly into maintenance for shareholders. Ultimately, buyers still want well-run buildings with good services, but they’re becoming more disciplined and gravitating toward buildings where the monthlies feel justified—and where they’re not paying for amenities they know they won’t use.
Tara King-Brown
THE CORCORAN GROUP
EAST SIDE MANHATTAN OFFICE
Rising operating costs — utilities, insurance, labor and materials — affect both condos and co-ops. Recent annual bumps of 5–7% in maintenance or common charges matter, but they haven’t slowed the market in a meaningful way. The luxury segment, generally $4–5 million and up, remains exceptionally strong despite higher carrying costs. That strength is driven by broader financial confidence: record market performance, robust Wall Street bonus payouts, and buyers’ ongoing commitment to being in New York for work, school, or lifestyle. Lower interest rates help at the margins, though this segment is still dominated by cash buyers. When advising clients, we compare buildings on a true apples-to-apples basis: co-op maintenance (including taxes) or condo common charges plus taxes, divided by square footage. This allows us to determine the per-foot carrying cost. Factoring in size, amenities, and level of service, this number is an indicator of a building’s financial health. It gives clients a much more holistic view to make well-informed decisions. For example, if a condo’s total carry cost is over $4-$4.50/ft, or a co-op’s is over $3-$3.50/ ft, many buyers will draw the line and pursue the property only if the price is lower to reflect these higher-than-average monthly expenses.
Aroza Sanjana
DANIEL GALE SOTHEBY’S INTERNATIONAL REALTY
BROOKLYN
Buyers in today’s New York City market are highly informed when evaluating the cost differences between luxury condos and co-ops. Roughly 95% of buyers are represented by buyer’s brokers, which adds significant depth to their understanding of pricing, monthly carrying costs, and long-term financial exposure. Attorneys also play an important role during due diligence by reviewing board minutes and financial statements to identify potential future assessments or capital projects that could increase monthly costs. Some recent studies about rising monthly costs can be misleading because they rely primarily on closed sales data. Co-ops with unusually high maintenance — often driven by assessments — tend to sell more slowly or fail to trade at all. As a result, the visible data set may underrepresent buildings experiencing the greatest financial pressure. Buyers also recognize the structural differences between condos and co-ops. Condominiums typically offer more amenities and flexibility, which results in higher common charges. Co-ops, while often less expensive monthly, come with stricter approval processes and restrictions that remove them from consideration for many buyers. Rising costs for insurance, labor, utilities, and building maintenance are increasing expenses across the city. Older co-ops may feel these pressures more acutely, although New York City’s tax structure keeps co-op property taxes lower than comparable condos. Conclusion: Buyers generally accept higher costs when they are predictable and supported by amenities or strong building finances. Demand weakens when monthly charges appear unstable or when future assessments seem likely.
Burt Savitsky
BROWN HARRIS STEVENS
EAST SIDE OFFICE
I am currently representing a beautiful, former nine-room co-op apartment in a top Park Avenue building. We happen to have very reasonable monthly maintenance, so we are able to maintain a higher “value” price for the unit. There is always a correlation between a property’s monthly common charges (condo) or monthly maintenance (co-op). The higher the monthly carrying costs, the lower the price. What scares buyers about monthly common charges or maintenance is that they almost never go down. They are subject to escalating labor costs (note: most building staff are members of a union) and ever-increasing monthly insurance premiums. When it comes to repairs, the better buildings have healthy reserve funds. These funds help keep monthly costs from increasing. They are used to cover capital improvements and emergency renovations and repairs. The best way to evaluate higher-than-normal monthly carrying costs is to look at the amount that is over and above what is normal for comparable apartments, and multiply that amount by the number of months/years you expect to own that property. Then take one half of that number, and reduce the asking price by that amount. Another way to approach high monthly carrying costs, but not reduce the asking price (and ultimately the selling price), is for the seller to contribute a portion of the maintenance overage (for an agreed period of time), at closing. Willingness to negotiate is always the key!
Keren Ringler
DOUGLAS ELLIMAN
NEW YORK CITY
Escalating monthly charges are beginning to affect both condominiums and co-ops in New York City’s luxury housing market. Much of this increase is being driven by rising building insurance premiums and higher operating costs. In new luxury condo developments, these rising expenses — combined with the expansive amenity packages that now define many buildings—have pushed common charges in some ultra-luxury properties to as much as $7 per square foot. Despite this, demand remains strong among affluent buyers, many of whom purchase with cash and prioritize high-end amenities and the ownership flexibility that condos provide. However, buyers are becoming less willing to absorb steep monthly fees in buildings that fail to deliver these lifestyle features. Luxury co-ops, which typically offer fewer amenities, have faced growing competition from newer condo developments. In 2025, Manhattan condos outsold co-ops by roughly three to one, even though co-ops account for nearly three times the available inventory. Still, co-ops may be regaining some ground. While many have raised maintenance fees to cover higher insurance, operating costs, and capital improvements, their monthly charges remain significantly lower than those of comparable condos. As a result, luxury co-ops are beginning to reclaim some of their appeal by offering “more bang for your buck.” For certain buyers, this combination of lower monthly costs and traditional “old-world” prestige can outweigh the flexibility and amenity-driven lifestyle associated with modern luxury condominiums.
This article appeared in the March issue of Behind The Hedges in Dan’s NYC. To read the full digital edition, click here. For more New York City real estate news, tap this link.
