With election season wrapping up, we’re about to see the future makeup of the White House, Congress, and Senate. While some may be satisfied with the results and others less so, the end of this uncertainty will bring clarity, enabling consumers and businesses to plan more effectively. As we head into 2025, several factors are likely to shape the economic landscape: a robust bonus season, potentially lower interest rates, strong economic growth, low unemployment, high replacement costs, possible inflation pressures, and a continuing surge in New York City’s rebound. We’re also seeing a significant transfer of wealth to younger generations. Together, these trends set the stage for exciting changes and opportunities ahead.
Fall Market: New York City's fall home-shopping season is kicking off strong, marking the best start since 2021. In September, 1,676 homes went under contract—a 26.4% increase from last year, according to StreetEasy. The post-Labor Day surge was the largest in three years. If we do see sharp declines in mortgage rates, that would result in a hotter-than-usual spring market in 2025, and buyers in the spring will face heightened competition.
Mortgage Rates: Mortgage rates have climbed for the fifth straight week, hitting their highest level since early August. With key events on the horizon—the jobs report, the 2024 election, and the Fed’s rate decision—volatility is expected to continue. However, it seems rates are peaking and are unlikely to reach this year’s previous highs.
If the Fed takes a more aggressive approach and cuts rates faster than expected, we could see a "refi wave" in the mortgage market—a period when homeowners rush to pre-pay their mortgages. This wave of pre-payments can disrupt capital markets as older bonds are partially or fully retired, increasing new issuances and leaving investors with principal to reinvest. For investors in mortgage-backed securities, managing prepayment risk becomes a key factor in determining value, as it directly impacts returns and portfolio stability.
Luxury Market: 26 contracts were signed last week in Manhattan at $4 million and above, the same total as the previous week. Condos outsold co-ops 21-4 with one condop in the mix.
The top of the Brooklyn luxury market continued to be dominated by townhouses last week. For the fifth straight week, the top Brooklyn contracts asking at least $2 million went to townhouses. Townhouses accounted for the seven most expensive contracts last week and 10 contracts signed overall, with condos making up the remaining 11 deals signed last week.
Rental Market: As expected, as we get deeper into the Fall, we are feeling a cooling rental market. Concessions are reemerging for tenants, with negotiability and days on market increasing. This should be the trend until the Spring.
Compass Outperforms Market: Compass grew 18% faster than the market, powered by Compass agents closing 55,872 transactions in Q3 2024, an increase of 16.1% year-over-year while the market declined 1.9% for the same period. Our national quarterly market share increased to 4.80% during Q3 2024, up from 4.31% in Q3 2023.
Karp Dagan Team: Fueled by passion and expertise, our journey began as a duo and has now expanded into the Karp Dagan Team—8 top agents and a dedicated support crew. We deliver seamless real estate experiences across Manhattan and Brooklyn, using creative strategies and data-driven insights to cover every angle. Please give us a follow on instagram and check out our latest reel here.
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