Wishing you and your family a joyful and prosperous start to 2025! The past year presented its fair share of challenges, but as we step into 2025, the world seems to have a clearer understanding of key trends shaping the real estate landscape.
Historical trends suggest continued sales growth in 2025, buoyed by increasing buyer confidence following the presidential election and the recognition that life cannot remain on pause. Signed contracts in Q4 2024 were up 6% compared to the previous year, indicating robust activity that will likely carry into Q1 2025.
As wealthy buyers seek diversification and expectations of drastically lower rates fade, Manhattan’s real estate market appears poised for sustained strength across all price points.
Q4 Recap: Manhattan’s residential real estate market closed out Q4 2024 with impressive momentum as sidelined buyers re-entered the market. Despite elevated mortgage rates and limited inventory, gains in equity markets and growing acceptance of current conditions fueled a 10.6% year-over-year increase in apartment sales. The median price climbed to $2.07 million, marking a 2.7% rise compared to Q4 2023—a clear testament to Manhattan’s enduring allure.
Ultra-Luxury Properties Lead the Pack: The ultra-luxury segment performed exceptionally well, with sales of properties priced at $20 million and above jumping 58.3% year-over-year. This surge was driven by robust demand for Manhattan’s most exclusive residences, supported by significant wealth creation and intergenerational transfers.
The New Normal Mortgage Rates: With rates likely to hover around 6%, this is a more sustainable "normal" compared to the historically low 2–3% rates, which were temporary measures to stave off economic turmoil. While some may view higher rates negatively, they often reflect a strong economy with stable employment and rising wages.
Condominium Market Shines Bright: Condo sales surged by 21.5% year-over-year, with the average price approaching $3 million—its highest level since 2018. This segment, less impacted by rising mortgage rates, saw strong demand for turnkey properties featuring modern amenities. Meanwhile, co-op sales posted a modest 2.8% increase, though the average price experienced a slight decline.
Where Will The Value Be In 2025?: Buyers are increasingly willing to pay a premium for move-in-ready, brand-new homes. Meanwhile, homes requiring renovation may present some of the best opportunities for savvy buyers in 2025. For those buyers looking for a deal, look into doing some work. For those looking to sell at top dollar, make sure to present your home in its best light.
Wishing you and your loved ones a happy, healthy, and successful 2025. Let’s make it a year to remember!
