As we prepare to bid farewell to 2024, it's time to dust off our crystal ball and gaze into the real estate opportunities awaiting us in 2025. Drawing on the trends from Q4 2024, here are four predictions that we believe will define the year ahead for New York City's real estate market:
More Buyers
This past fall ended as the most active fall season since 2021, after two and a half years of sluggish contract signed activity, triggered by high mortgage rates and market volatility, 2025 promises market stabilization and growth. Liquidity, measured by the rolling 30-day pace of contracts signed, finished November 36% higher than last year and 33% higher than 2022, suggesting the return of buyers to the market is not just a temporary fad. With 2024 finishing on a high note, expect spring 2025 to continue the resurgence of buyers.
Inventory will remain limited
A flood of inventory in 2025 seems unlikely. While spring, traditionally the busiest season for new listings, will naturally bring an uptick in activity, the lukewarm listing trends seen in Q4 2024 suggest the volume of new sellers will likely hover around the typical seasonal average. If demand outpaces supply, leverage could shift firmly toward sellers.
Co-ops will make a comeback
Amid high asking prices and low inventory, 2025 will likely see buyer interest surge for co-ops and the opportunities they present. This year, NYC condos sold for 26% more on average than co-ops with similar square footage and amenities. With fewer new co-op listings for sale compared to condos, co-op owners looking to sell next year should be well-positioned to do so.
Reno-YES-vation
With costs and construction timelines stabilizing, rising prices could make fixer-uppers increasingly attractive. The renovation premium, which soared to nearly 30% during its post-pandemic peak, has been gradually returning to its historical average of around 14%. Buyers may be recalibrating their priorities, as they recognize that there could be a good value play.
Looking ahead, the 2025 real estate market in NYC is set to be one of growth and opportunity for buyers and sellers alike.
Happy holidays! Wishing everyone a peaceful year full of health, happiness and prosperity.
