April 2025

April Newsletter —

We're now officially into Spring and into Q2. In this month's newsletter, we take a look at the state of the market, delve into the impacts of tariffs, and more.

Sales Market Update

The biggest takeaway from the Q1 market reports so far is that despite a new administration and economic uncertainty, the New York City real estate market appears to be in a "gradual recovery." The stabilization is pronounced enough that some think-pieces have compared the Q1 2025 numbers to pre-pandemic Q1 averages, noting that the market seems to be normalizing. After a period of uncertainty in early 2024, when buyer and seller activity slowed due to anticipated mortgage rate cuts that never materialized, the market has regained momentum. Now, with Q1 data more in line with typical seasonal trends, comparing today’s market to historical norms may provide a clearer picture of current conditions.

However, the robustness of Q1 2025 for Manhattan and Brooklyn isn't necessarily a solid indicator for the rest of the year. The State Comptroller's office reported that the average bonus in 2024 for employees of New York City’s securities industry increased by 31.5% from 2023. The bonus pool for those employees hit a record $47.5 billion, and Wall Street profits went up 90%. Those bonuses are often put back into circulation within the city's luxury real estate market, which accounts for some of the action in Q1 2025. However, the State Comptroller warned in the same report that we can't rely on that economic boost to continue into 2025 due to economic and policy uncertainty. This uncertainty may be further propelling the luxury market, as traders move their investments from a volatile stock market to the reliability of real estate. The securities markets have already begun to drop as of March.

In Manhattan, the bonus boost to the luxury market was especially pronounced. Sales of properties over $5 million increased 49.2% year-over-year, while properties in the ultra-luxury market (those priced at $20 million and above) saw the highest level of sales since 2019. These markets tend to be agnostic to mortgage rates, as their buyers can typically avoid financing. For instance, all cash deals accounted for 58% of Q1 sales and 90% of sales for apartments over $3 million. Manhattan is also seeing the effects of a rise in return-to-office mandates, which means New Yorkers who found suburban or country havens while remote work was the norm now have to rent or purchase homes in the city again. Meanwhile, sales between $1 million and $3 million declined 10.3% year-over-year, in part due to low inventory and high competition, but largerly due to risk factors like job loss and continued uncertainty.

The vigorous growth of Brooklyn's real estate market did not abate in Q1 2025, with a 13.4% year-over-year increase in sales. Houses accounted for 50.9% of all sales, up 16.7% year-over-year. As with Manhattan, the luxury market flourished in Q1 with contracts in the $2-3 million range growing 14.3% year-over-year, and contracts over $3 million increasing by 7.6%. While inventory is down 8.2% compared to Q1 2024, it's up 5% from Q4 2024, suggesting continued competition in the months to come, especially in the popular neighborhoods of North and Northwestern Brooklyn.

Let's take a closer look at the statistics from Manhattan and Brooklyn.

+8.1%

Quarter-Over-Quarter

+13.2%

Year-Over-Year

-4.4%

Quarter-Over-Quarter

-6.2%

Year-Over-Year

Days on Market (Q1 2025)

195

Average DOM

34.0%

Properties in Contract

after 180+ DOM

Inventory

+17.1%

Quarter-Over-Quarter

+3.4%

Year-Over-Year

Source: Compass Q1 2025 Manhattan Market Report

+10.0%

Condos

+3.5%

Co-ops

+3.0%

Houses

Contracts Signed (Quarter-Over-Quarter)

-13.0%

Condos

-0.5%

Co-ops

-15.2%

Houses

Days on Market (Q1 2025)

131

Average DOM

(Overall)

+21.0%

Properties in Contract

after 180+ DOM

Inventory (Quarter-Over-Quarter)

+15.3%

Condos

-2.1%

Co-ops

+0.4%

Houses

Source: Compass Q1 2025 Brooklyn Market Report

Rental Market Update

Before the pandemic, the NYC rental market could typically be expected to rev up around Mother's Day, but 2025 has already seen several consecutive months of record-breaking high rents. That predictable early May uptick in activity may be barely noticeable this year, as both mortgage rates and would-be buyers react to the uncertainty of potential tariffs.

In Manhattan, the net effective median rent was at an all-time high for the second month in a row, coming in at $4,471. Net effective median rent takes into account things like free months and other landlord concessions, which are becoming more and more uncommon. The median rent saw a year-over-year increase of nearly 10% to $4,495. While inventory did increase just over 23% year-over-year, there's little relief in sight—lease signings were up, and the market percentage of bidding wars in March was still among the highest on record.

Brooklyn's market is similarly tight, with an average price per square foot of $60.01, a record high for the third consecutive month. Inventory increased 26.1% year-over-year, but median rent increased 5.9% year-over-year to $3,700. Lease signings increased by nearly 10%, which is reflected as well in the second-highest month on record for bidding wars on new leases.

Conversations about the Rent Guidelines Board and the rent-stabilized housing system have already ramped up again. The RGB has released a report stating a 12.1% increase in revenues for landlords of buildings with rent-stabilized units. Tenant advocacy groups say this is grounds for a rent freeze, especially given that one in four New Yorkers is now living in poverty. On the other hand, NYU's Fuhrman Center presented data that many 100% rent-subsidized buildings, especially in the Bronx, are actively losing money. The only thing tenants and landlord advocacy groups seem to agree on is that the system needs to change.

Read the Compass March 2025 Rental Report here.

Deep Dive: Tariffs & Real Estate

Federal tariffs have been on-again-off-again with the last major enactment lasting about 12 hours. With the exception of imports from China, anyone whose finances or livelihood will be affected by the tariffs has been given a 90-day reprieve. There's been a lot of talk about how this impacts everyday items like coffee and fresh fruit, but we're also starting to see changes in New York City real estate.

So far there are two issues at the forefront: consumer confidence and construction costs. Consumer confidence is likely to be seen largely in activity levels, with both foreign and local buyers pausing their searches or waiting to list until there's a clear path forward. As we've been seeing for a few years now, the wait-and-see approach tends to lead to low inventory in the sales and the rental markets. This consumer caution can be seen in many large, luxury, or investment purchases, such as new appliances or home renovations.

Even before talk of tariffs, the costs for new construction and home renovations had skyrocketed. What might have cost a New Yorker $250-$300 per foot 15 years ago would, a few months ago, have cost at least $700. The tariffs on and from China alone substantially raise the cost of kitchen and bathroom upgrades like electrical supplies, plumbing, and other hardware. Many essential construction and design elements are sourced from many of the nations subject to the new tariffs, including plumbing fixtures, cabinetry, and windows, as well as raw materials like stone, lumber, aluminium, and steel.

What is there to be done? Some experts say that projects already in the construction phase are likely to be fine, as the source materials have probably already been purchased. They suggest that if you're in the mid to late planning stages of a renovation or improvement, now is the time to finalize and purchase supplies. Meanwhile, however, design firms are being encouraged not to hold price guarantees for more than one week. Other experts are wary of moving on anything right now, given that it will come with a significant price increase. They point to the volatile nature of these policies so far, and the hope that anything that happens will be relatively short-lived.

City Spotlight: Macy's Flower Show 2025

If you like fashion, flowers, and things that are free, check out the 2025 Macy's Flower Show. Its sprawling botanical displays will delight and inspire with vibrant colors and innovative artistry. Each year the flower show is done with a new theme and in partnership with brands like Dior, but the details of this year's show have yet to be announced.

Macy’s Flower Show will open at Macy's Herald Square on Sunday, April 27 and run through Sunday, May 11 during store hours.

Click here for more information.

Just Closed

Lenox Hill

530 East 72nd Street, Unit 14E

2 BD 2 BA $1,437,500

Extraordinary skyline and river views await in this spacious two-bedroom, two-bathroom home featuring sun-kissed interiors, generous storage, private outdoor space and a peaceful location in a full-service Lenox Hill co-op.

East Village

645 East 11th Street, Unit 1

Located in the East Village, this retail condo was formerly a dental office. There are three exam rooms and two street entrances.

In Contract

Upper East Side

1165 5th Avenue, Unit 2/3D

4 BD 3 BA 2,200 SF $2,250,000

Rarely available and on the market for the first time in over 40 years, this unique, house-like apartment is filled with natural light thanks to direct southern and eastern exposures.

Clinton Hill

110 Clifton Place, Unit 2A

1 BD 1 BA $4,350

Rented above ask!

At approximately 850 SF, this fully renovated prewar loft combines charm and modern convenience, featuring high-beamed ceilings, hardwood floors, and abundant natural light with treetop views from southern and northern exposures.

7 West 92nd Street, Unit 76

2 BD 1 BA $899,000

This top floor, fully renovated two-bedroom home is ideally located just steps from Central Park. With 9’ ceilings, an in-unit washer/dryer, three exposures with windows in every room, and charming details like exposed brick and a decorative fireplace, this home is not to be missed.

Just Listed

305 East 40th Street, Unit 5K

2 BD 2 BA $1,149,000

Bright and airy with southern and eastern exposures, this fully renovated home features an in-unit washer/dryer, abundant closet space, and solid oak floors throughout. With a low maintenance fee and no flip tax, it offers both comfort and value.

Coming Soon

Upper east side

Pre-War One-Bedroom

This charming prewar one-bedroom is quiet, with windows in every room and access to a range of building amenities, including a common courtyard, laundry facilities, bike storage, and a children’s playroom. Situated on 88th Street and Second Avenue, this residence offers convenient access to the 4/5/6 and Q trains, as well as the 86th Street crosstown bus.

Contact me for details.

NoMad

88 Lexington Avenue

2 BD 2.5 BA 1,541 SF $12,500/month

This luxurious east-facing split two-bedroom, two-and-a-half-bathroom home features oversized windows with open views, ceilings over 10 feet high, an in-unit washer/dryer, a separate office area, and central AC, all a building with more than 10,000 square feet of amenities.

Contact me for details.

Off-Market

Rental Buildings in Prime Locations

Four rental buildings available off-market, offered individually or as a package. Located on the Upper East Side, Upper West Side, and Gramercy, these properties feature a mix of rent-stabilized and free-market units, with all buildings fully occupied. Each building contains between 6 and 17 units. For more information, please contact me.

Lower East Side

265 East Houston Street, Unit 7

2 BD 2 BA 1,400 SF $9,995

Available short term (three months minimum) or long term, furnished, unfurnished, or partially furnished.

Ideally located in the heart of the Lower East Side, this expansive seventh-floor loft-style home offers unparalleled luxury living. Boasting exclusive elevator access and a private balcony, this residence features an array of modern amenities, including an in-unit washer/dryer.

Most Recent Mortgage Rates

Rates are from Citibank and are effective as of 4/21/2025. Rates are subject to change without notice.

Everyone’s mortgage needs are different. I have great relationships with mortgage brokers and loan officers from big banks and small banks who can help find the best loan for you. If you're looking for a lender you can trust, I'd love to help. Email me for more.

Rebecca's Resources

I'm an expert at successfully repositioning and selling homes that were previously listed without success. Click here for examples of how I have transformed listings to showcase a property's full potential, securing favorable deals where other agents could not.

Find out how Compass Concierge can help you prepare your home before coming to market by fronting the costs of upgrading, renovating, and staging at no interest.

I'm born and raised in New York City. If you've got a question, I've got you covered. For recommendations on anything, from the best family bakeries to maps of cherry tree blooms, it's as simple as sending me an email.

Licensed Associate Real Estate Broker

M: 917.952.0414

rebecca.orbach@compass.com