In 2025, New York City’s housing market found its footing. Buyers and sellers re-engaged in equal measure, inventory expanded, sales activity picked up, and pricing proved resilient, with many homes trading near their most recent asking prices. The luxury market performed better than the base market.
On the rental side, however, conditions remained challenging as low vacancy rates and strong demand continued to push rents higher—an ongoing effect of the city’s long-standing housing shortage and the return-to-office era.
Looking ahead, the pace of NYC’s sales market is expected to accelerate, creating new opportunities for both buyers and sellers. Renters, meanwhile, may face continued upward pressure on rents, even as new development comes online. With affordability concerns shaping decisions across the city, adaptability will be key.
A New Mayor Is Sworn In: After months of speculation, New York’s real estate industry now has clarity: Zohran Mamdani has officially taken office as mayor.
Mamdani enters City Hall with a housing agenda that’s already drawing close attention—particularly his pledge to freeze rents on stabilized apartments for four years. While rent increases are set by the Rent Guidelines Board, mayoral influence has historically shaped its direction, and last-minute board appointments by the prior administration add complexity.
Mamdani has acknowledged that a rent freeze alone won’t fix the housing shortage. His broader policy agenda includes overhauling the city’s property tax system, supporting litigation that challenges current assessments, and exploring state-backed insurance alternatives to ease rising costs for owners—though many of these changes would require state approval.
He has also signaled support for higher corporate and income taxes to fund his priorities and plans a tougher stance on problem landlords, including reviving the Office to Protect Tenants and targeting distressed multifamily buildings with chronic violations.
For property owners and investors, the new administration brings both uncertainty and the possibility of meaningful structural change—much of it dependent on Albany.
Manhattan Luxury Market Recap - A Standout Year: Manhattan’s luxury market delivered a strong year, with 1,436 contracts signed at $4M+—an 11% increase over 2024. Total sales volume reached nearly $12B, making 2025 the second-best year for luxury sales since 2006, trailing only the 2021 post-pandemic surge.
Activity was supported by improved pricing, as average asking prices declined 4% year over year, alongside a strong stock market that saw the S&P 500 hit new highs. Condos continued to dominate, outselling co-ops more than 3-to-1, with new development accounting for half of all condo sales.
The trophy market remained resilient, posting 284 sales at $10M+, the second-strongest result on record. Despite headwinds—from high mortgage rates to political and global uncertainty—Manhattan luxury real estate once again proved its staying power.
Brooklyn’s luxury market registered its highest Christmas week deal volume in five years. The borough saw 13 contracts — four condos and nine townhouses — signed from Dec. 22 to Dec. 28 for a total contract volume of $58 million
Mortgage Rates: The average for a 30-year, fixed-rate home mortgage reached its lowest point of the year on the very last day of the year. The rate fell to 6.15%, hitting its lowest point since October 2024.
Rental Market: New data from Miller Samuel suggests that renting in Manhattan continues to grow less affordable. Both average and median rents reached new record highs in November, underscoring sustained pressure on the rental market.
Average rent climbed to $5,686, a 13% increase year over year, while median rent rose to $4,750—up 13.1% from last November. Rents also increased month over month, and the average price per square foot moved closer to the $100 mark, up significantly from $86 a year ago. Together, these trends point to ongoing demand and tightening affordability across the borough.
Grateful for 2025: Thank you for the trust you placed in us this year. With your support, Compass continued to lead the industry in U.S. sales volume, delivered meaningful enhancements to our platform, and remained a strong advocate for Home Seller Choice—ensuring your home can be marketed in the way that best serves your goals.
We’re grateful for the opportunity to work with you and look forward to the year ahead.
Check out our video post here on selling a condo with feedback.
As always, please reach out with any questions.
