Welcoming a Strong Spring Market

The flurry of contract activity that closed out 2024 has carried over into the new year, setting the tone for what appears to be a more confident and balanced market. As we turn the page on the first quarter of 2025, we’re seeing measurable momentum and renewed buyer confidence.

Manhattan’s residential real estate market performed well in Q1. After navigating a perfect storm of elevated mortgage rates, political and economic uncertainty, and shifting industry dynamics, the market responded with notable resilience. Some key year-over-year highlights:

• Sales volume rose by an impressive 13.2%.

• The median sale price climbed to $1,189,000—marking the highest quarterly median in the past decade.

• Contracts signed in the $1–2M range declined by 10.3%.

• Inventory improved modestly, with 3.4% more active listings than a year ago and a 17.1% increase from last quarter. However, this varies by neighborhood; the Upper East Side was the only submarket to see a decline in active listings, down 6.9% year-over-year.

• Properties priced at $5M and above saw a staggering 49.2% increase in closed sales.

• The ultra-luxury segment—homes priced at $20M and above—posted its highest sales volume since 2019.

Importantly, this resurgence in activity wasn’t confined to specific areas or price points. While Downtown maintained its perennial popularity with 26.5% of all sales, the Upper West Side posted the most substantial year-over-year growth of any submarket, with sales rising 25.3% and the median price increasing 16.3% to $1,338,000. Its appeal lies in a mix of housing stock, proximity to parks, and excellent transit—hallmarks of the quintessential Manhattan lifestyle.

Additionally we saw a number of notable trends.

• The Return-to-Office Effect: A fascinating Q1 trend was the noticeable impact of corporate return-to-office policies. Areas within walking distance of Midtown offices experienced a 21% year-over-year increase in signed contracts. This marks a shift away from pandemic-era preferences, when remote work had many buyers seeking space farther from Manhattan’s business core. As employers increasingly mandate in-person work, housing priorities may continue to realign accordingly.

• A Remarkable Comeback for the Luxury Market:  If one segment truly stole the spotlight, it was the luxury market. The sharp rebound in luxury sales signals renewed confidence among high-net-worth buyers, many of whom view Manhattan real estate as a secure investment amid broader economic uncertainty. Largely unaffected by mortgage rates and motivated by long-term diversification strategies, these buyers moved boldly in Q1. Echoing this trend, the townhouse market closings rose 30% year-over-year. These prized properties—known for privacy, scale, and architectural distinction—commanded a median price of $8,025,000 in Q1, up 28.8% from the same period last year.

• Among Property Types, Co-ops Lag Over Condos: The condo preference continued to shape the market, with condo sales rising 25.9% year-over-year, well ahead of the 4.5% growth in co-op transactions. With an average price of $3,071,535, condos remain the go-to choice for buyers seeking newer construction, modern amenities and fewer board restrictions.

• The New Era of Buyer Representation: A major industry change took hold in Q1: as of January 13th, all REBNY member firms began requiring formal buyer representation agreements. This represents one of the most significant shifts in brokerage practice in decades. Buyers and sellers have largely embraced the new model, which offers greater transparency. Most sellers continue to understand the importance of offering competitive buyer agent commissions as a key component in attracting well-qualified buyers and achieving optimal results.

What Lies Ahead for Spring 2025?

While mortgage rates remain elevated and uncertain, previously sidelined buyers are acting. Increased activity in the $500K–$1M range, in particular, suggests that first-time buyers are adapting creatively rather than waiting. Despite broader economic concerns—including the impact of global tariffs—we expect a vibrant spring season, which traditionally sees heightened buyer engagement. The lack of urgency in today’s marketplace isn’t new, but it reinforces what we’ve long believed: strategic pricing is the most effective marketing tool.

Let’s talk about how current market dynamics affect your property’s value or your need for housing. Having an experienced local advisor on your side can make all the difference.

As spring in New York begins to blossom, we at The Shirley Hackel Team hope these next few months bring a sense of renewal in every aspect of your life. If one of those aspects includes real estate, please don’t hesitate to reach out with any questions you might have.

As January Goes, So Goes The Year.

The old Wall Street adage suggests that January’s market performance very often sets the tone for the rest of the year. If that’s true, then 2025 is off to a promising start. We were busier than usual last November and December with a steady pace of contracts signed, and this January’s numbers are equally strong. In fact, signed contracts were up approximately 12% compared to the same month in 2024. Among luxury properties priced over $4 million, during the first five weeks of this year, 104 contracts were signed--the same as in 2024, underscoring the current market’s stability. We're seeing performance across certain metrics that we haven't seen since 2022 during the pandemic recovery, showing clear signs of a comeback now.  

Noah Rosenblatt, whom I’ve followed since 2005 when he founded the UrbanDigs website, provides real-time analytics and insights into the Manhattan and Brooklyn real estate markets. He tracks and measures consumer sentiment and activity, using a variety of statistical tools and analytical charts. Following are a few Leading Indicator Charts for January 2025. 

Monthly Price Cuts: At first blush +87% more price reductions in January over December may seem high, but that’s actually 5.1% less than this time last year. More sellers are adjusting their expectations to align with current market realities.

Climate Index: This looks at the ratio of successful to unsuccessful listings, more specifically the ratio of signed deals to listings removed from the market. When more listings succeed than fail, the index rises, and means selling is easier and prices can stay higher. A decreasing ratio indicates a more challenging environment for sellers where they might need to price lower to get buyers interested. This index has risen 35.4% from the past month and 4.7% from this time last year, and hasn’t been this high since 2022. 

Monthly New Supply: This has risen 148.2% from the past month and 15% from this time last year. A wave of new listings will come to market beginning in March and April, the traditional optimal times to list a new offering. Competition will ensue among sellers and among buyers.

Net Inventory Trends: While the Monthly New Supply shows all new inventory additions, Net Inventory Trends shows the pace of new inventory after subtracting contracts signed and units removed from the market. This has risen 101.8% from the past month and 110% from this time last year. This is the first January since 2020 that this score has been in positive territory. 

Buyers are definitely back but they are as risk averse as ever and seeking value. Having made their peace with higher interest rates, they are encouraged to engage the services of an experienced Buyer’s Agent not only to stay informed, but so they may act decisively when the right opportunity arises, and put themselves in the best position to win competitive bidding as the best properties continue to attract multiple offers.

For sellers, the current market presents an opportunity to list strategically. Well-priced properties with strong fundamentals, such as location, condition and amenities, are moving relatively quickly, while overpriced listings continue to linger. Sellers are cautioned not to test the market, but appreciate that an inflated asking price not only diverts bidder attention but fails to capture the possibilities presented in the first few weeks of marketing. With limited new development inventory in the pipeline, competition for move-in-ready homes is expected to remain high. 

If the past is prologue and January’s momentum is any indication, then the early strength we’re seeing signals a year of opportunity. For buyers, sellers and investors alike, the spring season holds lots of promise. For those looking to make a move—whether buying, selling, or investing—there is every reason to feel optimistic and energized about what lies ahead.

Here at The Shirley Hackel Team, we hope your 2025 looks as promising as these market indicators. If you have any questions, it would be a privilege to help you achieve your real estate goals.

2024 Challenges End on a High Note

2024 was largely a year of disappointment for Manhattan real estate. Buyer demand was stifled by elevated mortgage interest rates, while lenders grew disheartened by the flurry of preapprovals that failed to convert to real loan commitments. Sellers, too, faced frustration from reduced showing and bidding activity for their often-overpriced properties. All the while, experienced brokers persevered knowing that–as with all cycles–this too shall pass. And wonder of wonder, miracle of miracles 🎵, the holiday season notwithstanding, we’re finishing the year with a surge of nearly 200 signed contracts for properties priced over $4M since the first Monday of November, including 19 signed during the shortened Thanksgiving week–well above recent averages. 

Looking Ahead: Five Predictions for 2025

• Buyer Resurgence Across All Markets
We anticipate a resurgence of buyers for both resale and new development properties. Even mortgage-dependent buyers are adjusting to today’s rate environment with rates likely to hover around 6% for the next couple of years. The pandemic-induced 3% interest rate of 2020-2022 is now a historic anomaly.

• Tight Inventory Will Persist
Inventory levels are expected to remain low. With fewer new development projects in the pipeline, and many sellers waiting for 2026 in hopes of stabilizing and rising values, supply will likely remain constrained. 

• Stable to Modestly Rising Prices
If buyer demand increases while inventory stays tight, prices should hold steady or improve modestly providing some stability in the market. 

• Renovation Opportunities
John Walkup of Urban Digs forecasts more value in apartments needing work. He notes, “The renovation premium, which soared to nearly 30% during its post-pandemic peak, has been gradually returning to its historical average of around 14%.” As an agent with several “good boned” properties waiting for their moment in the spotlight, I say cheerfully: bring it on!   

• Strong Financial Markets Driving Cash Buyers
A robust stock market and anticipated high bonus season should keep cash buyers active, especially at the upper end of the market.

My Crystal Ball is Round
Uncertainty remains about what comes next. Inflation is unlikely to disappear and may even tick upward. Tariffs, labor shortages and the policies of a new, unconventional Washington administration could also impact housing. As my friend and client Gregg S. Fisher said in a recent letter to Quent Capital fund investors (of which I am one): "Entrepreneurs are not just business owners; they are visionaries and relentless optimists who believe deeply in the possibility of a better future.” Experienced brokers share the same optimism. A better Manhattan real estate market will come. 

I ❤️ NY (Townhouses) - Part 1

While much of the world comes to New York to marvel at its towering structures of steel and glass, reaching skyward to breathtaking heights, I find the city's true architectural beauty in its limestone, brownstone, and red brick townhouses. These treasures aren’t found along the iconic skyline, but tucked away on the historic, residential streets of neighborhoods like Park Slope, Carnegie Hill, and the West Village. Here, the hustle and bustle are more intimate, with neighbors perched on stoops, catching up in a way that feels quintessentially New York.

Whether you call them townhouses, rowhouses, or collectively refer to them as “brownstones,” there’s no denying that few residences in the world are as charming and desirable as a New York City townhouse. A simple stroll down these streets reveals a journey through eras, art, and culture, expressed through the many architectural styles and intricate details.

The Landmarks Preservation Commission offers a free Rowhouse Manual, which highlights the styles you're likely to encounter. After two decades of living in “Brownstone Brooklyn,” I’ve become familiar with many, from Neo-Grecs to Italianates. Here are a few standout styles that catch my eye whenever I pass by:

Queen Anne

Symmetry can be overrated. The irregular facades of Queen Anne homes create an engaging tension that makes them a delight to admire.

Second Empire

I’m a sucker for a mansard roof, the hallmark of this mid-19th century style. Wide stoops, typical of these homes, are ideal for a morning coffee or a friendly chat with neighbors.

Federal

As their name suggests, these red brick, two-to-three story homes harken back to the early days of our nation. You can almost imagine colonial New Yorkers warming themselves by the fire, penning letters with quill and ink.

Neo-Classical

Though rare, the Neo-Classical homes I’ve seen are nothing short of spectacular—and so is their value.

Here are some recommended blocks for townhouse peeping:

• 70th Street between Park and Lexington Avenues, Manhattan

• 64th Street between Fifth and Madison Avenues, Manhattan

• 2nd Street between 7th and 8th Avenues, Brooklyn

What are some of your favorite townhouse blocks? Let us know here, and next month, we’ll be back to discuss townhouses as real estate investments.