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.

January 2023

Q4 2022 Manhattan Market Report

Highlights Prevailing Trends

If you have questions about your own property or local neighborhood, don't hesitate to reach out.

Here's my recap:

• For much of 2022, inventory was at restricted levels, slowing dramatically with each successive Fed rate hike beginning in April as property owners held onto their low-rate “golden handcuffs” mortgages.

• Deal volume dropped significantly from the highs of 2021, and we’re back at 2019 pre-pandemic levels for pending sales—which were not so great if you recall.

• With inventory and pending sales both down, one would have expected a drop in prices, but sales prices for the most part remained stable last year.

• The only price bracket to see growth in 2022 was the uber luxury segment of properties priced $10-$20M which jumped 21.9% YOY in total sales.

• Average days on the market for 4Q was 147; however, more than 25% of properties took more than 180 days to go to contract.

• Approximately 50% of Manhattan purchases were all cash; those in a position to pay all had an obvious advantage as the cost of borrowing escalated.

• The 2nd half of 2022 was all about rebalancing.

• In 2023, the market will continue to recalibrate. If mortgage rates go down, as many speculate, demand will go up, along with prices and inventory. The first half of this year may just be the very best time to be a buyer.

  Reach out if you need help selling or buying real estate in New York City or anywhere across the country. We have a national network of top real estate partners.