January – 2025 Market Update

We at the LevinKong Team hope you are staying well and keeping warm. Although the city has been experiencing frigid temperatures, our market has started to warm. Demand was uncharacteristically robust last month, a trend that has continued throughout January. Winter is typically a slower real estate season in NYC. However, buyer participation is up while inventory levels remain constrained.

The finance sector significantly fuels New York City’s real estate markets. Over the last few years, many of those would-be sellers and buyers have remained sidelined. There has been a hesitance to make large purchases ahead of what many predicted was an imminent recession. High interest rates and expectations of lower rates also held many buyers back. Homeowners have been reluctant to list their homes, stemming from the same root causes. The trade-up would entail giving up historically low interest rates to move into a significantly higher rate on a more costly property.

A lot is changing. The recession talk has lessened, and lenders are hesitant to lower mortgage rates due to continued inflation concerns. As expected, the Fed has opted to keep its benchmark federal fund rate steady. However, there is now a palpable acceptance of the current rate environment. At the same time, the waiting game has maxed out the utility of many current homes, particularly so given our apartment-heavy housing stock. Higher finance sector bonuses are also fueling market engagement. The impact can be felt across the market at all price points. The luxury segment is rebounding particularly well.

Inventory levels in both Manhattan and Brooklyn are tight, particularly in the new development condo space. In Manhattan market-wide, supply is down 5.5% from this time last year, while demand is up over 30%. In supply-starved Brooklyn, a modest 2% increase in inventory is doing little to offset the appetite for new homes. Expect modest price increases to start the year. Market dynamics are shifting,

With the LevinKong Team, you can confidently navigate the complex and evolving real estate market. Our decades of experience and a data-driven, research-based approach are invaluable assets in this environment. We are committed to helping you achieve your goals, protect your investments, and address any questions or concerns you may have about the market or your decisions. Our steadfast dedication to your success reflects how much we value and care for our clients.