Jan 23, 2025
After nearly three years of slow growth, the New York City real estate market is poised for a significant rebound in 2025. Trends from late 2024 signal renewed energy, with Manhattan and Brooklyn leading the way. Here are five key predictions for the year ahead:
2024 ended on a high note, with the most active fall season since 2021. Indicators like the ratio of successful listings and the pace of contracts signed showed steady improvement throughout the year. November’s rolling 30-day contract activity was up 36% from 2023 and 33% from 2022, signaling strong buyer confidence. This momentum is expected to carry into spring 2025, with more buyers entering the market.
Spring is typically Manhattan’s busiest season for new listings, but a surge in inventory seems unlikely in 2025. Many sellers remain cautious, preferring to wait for more stable demand before listing.
At the same time, strong buyer activity is expected to outpace supply, shifting leverage toward sellers. This dynamic will make the market more competitive, especially for well-priced or renovated homes. Buyers should be prepared to move quickly on desirable properties.
With rising home prices, buyers may turn their attention to fixer-uppers. Renovation costs and timelines are stabilizing, making properties with potential more attractive. The renovation premium—the added cost for move-in-ready homes—has dropped from 30% during its peak to a historical average of 14%. Buyers willing to invest in homes with “good bones” could find the best value in 2025.
The FARE Act, which shifts rental broker fees to the party hiring the broker, has sparked hopes of cooling the rental market. However, without significant new rental supply, high rents are here to stay. Demand will remain strong, particularly in Manhattan and Brooklyn, driving competitive bidding wars for desirable units. Renters should start their search early and act fast to secure a home.
2025 is expected to bring steady price growth for Manhattan and Brooklyn real estate. Renewed buyer activity and limited inventory are aligning with improved market sentiment. While price increases are unlikely to be dramatic, they reflect a healthier, more stable market. Sellers can expect reasonable timelines and pricing, while buyers gain clarity and confidence in market direction.
After years of challenges, 2025 is shaping up to be a year of revitalization for NYC real estate. Buyers and sellers alike can look forward to increased market activity, rising confidence, and new opportunities. While challenges like high mortgage rates and limited inventory persist, the market’s growth signals a brighter year ahead.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
