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.