I was away for my children’s spring break when my phone started to blow up.
By the time I got to a real estate conference a week later, the news had already circled the globe twice. It was even hastily added to three different slide decks in the presentations I attended.
The topic everyone in New York is currently losing sleep over? The Pied-à-Terre Tax.
If you listen to the news, certain frantic brokers, or anxious friends, you’d think the sky isn’t just falling; it’s being taxed on the way down.
But what are we even talking about? Frankly, no one knows for sure. It could be a $5,000-per-million surcharge for every dollar over $5M, or it could be something far less onerous—or more. We’re currently basing our panic on a 2019 proposition that went nowhere in the State Legislature. We might as well be throwing darts at a map.
Of course, Governor Hochul pulled out this unbaked proposal right before the residential spring market kicked in. Her timing couldn’t have been better—if her intention was to throw a wrench into the gears of the city’s favorite pastime: buying and selling real estate.
But let’s take a breath and look at the actual math.
By the Numbers: What Are We Actually Talking About?
We love a good boogeyman, but the data tells a different story:
- The Needle in the Haystack: Right now, there are roughly 6,000 active listings in Manhattan. Of those, only about 750 units are even being positioned or considered for part-time use.
- The Inventory Crunch: Meanwhile, overall inventory is sitting at a five-year low. We aren’t exactly drowning in options.
- The Luxury Slice: Only 5–7% of all properties are priced over $5 million (the threshold where this tax would even kick in).
So, 93% of the market doesn’t even qualify for the tax, whatever it might be. Even if we assume two-thirds of those $5M+ homes are secondary residences—which they are—we’re still obsessing over a tax that impacts roughly 4% of the total available inventory.
We are letting the tail wag a very large, very expensive dog. It’s like looking at a single $100M trophy sale and thinking it sets the pace for a studio in Yorkville. I assure you, it does not.
we put these worries on a pedestal.
The Graveyard of Things That Didn’t Matter
I call these issues Real Estate Rocking Chairs. They give you something to do, but they don’t get you anywhere.
If you look back, the New York market is a graveyard of things people swore would kill the business forever. Remember the panic over:
* The SALT deduction caps? (Which, by the way, just got a bump to $40k—life goes on).
* The Increased Mansion Tax?
* The Reduced Mortgage Tax Deductions?
* The COVID “death knell”?
Each time, experts predicted a mass exodus. Each time, New York did what New York does: it adapted. People still wanted to live here. They still wanted a piece of the most vibrant island on earth.
Reasons vs. Results
In the end, you’re either looking for reasons or you’re looking for results.
For every person freaking out about a tax that hasn’t even been fully fleshed out yet, there’s someone else quietly licking their chops at the opportunity. For every worrier, there’s an investor looking at their stock portfolio—up roughly 4% year-to-date—realizing that waiting for the perfect moment is usually just a polite way of saying missing the boat.
This is why I keep getting this question at every dinner table, at every coffee, and on every phone call: “Why does it seem like the market is so active?”
My Advice?
Stop paying so much attention to the news cycle. It’s designed to drive you crazy because Everything is Fine and the Market is Normalizing doesn’t get clicks. Heck, maybe I’m shooting myself in the foot writing this... but I won’t let that stop me.
In my book, The Pursuit of Home, I bust many myths. Here’s one that we must dispel, again and again and again. You cannot time the real estate market.
The secret truth? It’s not about timing the tax code. It’s about vision. It’s about knowing what a home is worth to you, not to a headline.
It’s spring in New York. The trees are budding, the listings are tight, and the sun is out. Don’t let a rocking chair keep you from the finish line. There will always be a reason to wait—but in this city, the results belong to those who move.
Scott Harris is the founder of Magnetic, a New York City–based residential real estate firm focused on thoughtful strategy and disciplined execution. He is the bestselling author of The Pursuit of Home: A Real Estate Guide to Achieving the American Dream and has spent more than two decades guiding buyers and sellers—and agents—through multiple market cycles, borrowing money, finding homes, and navigating the psychological journey inherent in everything real estate
