January 2025

January Newsletter —

As the new year begins, the city remains aglow with festive lights, welcoming the winter season. In this month's newsletter, we take a look at the state of the market, discuss the latest real estate trends, and more.

Sales Market Update

The real estate markets in both Manhattan and Brooklyn wrapped up 2024 with notable activity, reflecting resilience and steady growth in the face of challenges like high mortgage rates and limited inventory.

The broader economic environment has continued to influence both buyers and sellers. Despite this, buyer activity surged in Q4 2024, driven by a growing recognition that waiting indefinitely isn’t sustainable, and that taking advantage of refinancing opportunities when rates decrease is a better option than remaining on the sidelines. The conclusion of the presidential election has brought much-needed clarity to the market, encouraging buyers who had been waiting for political uncertainty to subside to move forward with their housing plans. As a result, despite higher borrowing costs, there has been a notable increase in transactions, particularly at higher price points, where buyers are less affected by high interest rates.

In Manhattan, buyer activity grew in Q4 2024, with apartment sales increasing by 10.6% compared to the same period in 2023. Despite tight inventory, the market saw strong demand, pushing the average price up 2.7% year-over-year to $2.07 million.

The condo market experienced the most significant growth, with sales rising 21.5% from Q4 2023, and average prices approaching $3 million—the highest in six years. At the top end of the market, sales of ultra-luxury properties (over $20 million) jumped 58.3% year-over-year, fueled by continued demand for Manhattan’s premier real estate. Co-op sales showed a more modest increase of 2.8% year-over-year, but average prices for co-ops edged down slightly.

Inventory challenges persisted, with listings dropping by 8.6% compared to Q3 2024 and 14.3% year-over-year. Entry-level homes priced below $500,000 saw a notable increase in sales, up 21.2% from Q4 2023, reflecting a broader willingness among buyers to move forward despite market constraints.

In Brooklyn, the market showed similar growth. There were 2,292 sales in Q4 2024, a 7.7% increase compared to the same period in 2023. Houses represented 51.4% of sales, while condo sales increased by 7.3% from Q4 2023, making up nearly 30% of total transactions.

Brooklyn saw positive movement in contract signings, with approximately 1,560 contracts signed, a 6.6% year-over-year increase and a 6.1% increase compared to Q3 2024. However, co-op contracts declined significantly year-over-year, primarily due to limited inventory. Inventory remained tight, with only 2,863 properties actively listed, a 4% drop compared to the same time last year. Condos were the only property type to see an increase in inventory, rising by 16.3% year-over-year, which contributed to more sales. Homes priced between $2 million and $3 million also saw an increase in inventory.

Despite the challenges posed by mortgage rates, both markets showed signs of optimism. The rise in Treasury yields and inflation concerns have kept rates elevated, but there’s cautious optimism that the gap between mortgage rates and Treasury yields, currently 1.3 to 1.4 percentage points, may close. This could lead to slightly lower mortgage rates in the near future. As a result, there is potential for more affordable home buying and refinancing opportunities in 2025.

-4.3%

Quarter-Over-Quarter

-3.5%

Year-Over-Year

+13.6%

Quarter-Over-Quarter

+6.0%

Year-Over-Year

Overall Days on Market

188

Average Days on Market

22%

Properties with 180+ DOM Pre-Contract

Inventory

-14.3%

Quarter-Over-Quarter

-8.6%

Year-Over-Year

Source: Compass Q4 2024 Manhattan Market Report

+3.4%

Condos

-17.0%

Co-ops

-0.4%

Houses

Contracts Signed (QOQ)

+14%

Condos

-2.0%

Co-ops

+0.9%

Houses

Overall Days on Market

124

Average Days on Market

16%

Properties with 180+ DOM Pre-Contract

Inventory (QOQ)

-21.7%

Condos

-29.1%

Co-ops

-20.0%

Houses

Source: Compass Q4 2024 Brooklyn Market Report

Rental Market Update

New York City is anticipating a surge in rental supply in 2025, but this influx may not be enough to prevent rent growth from continuing.

December marked the third consecutive month of annual rent increases, with rents climbing at an accelerating pace. In Manhattan, the average listing price for studios to three-bedroom units reached $5,722 in December, reflecting an 8% increase compared to December 2023.

In Brooklyn, rents increased both month-over-month and quarter-over-quarter, though the growth was more moderate compared to Manhattan. In December, the average listing price for studios to three-bedroom units in Brooklyn was $4,159, compared to $4,026 in December 2023, indicating a 3% year-over-year increase.

While more rental units are expected to come to market in 2025—New York City is projected to add a record 34,800 new rental units, an 85% increase over the previous year—this increase in supply may only slightly cool rents. Typically, more supply leads to higher vacancy rates, which can prompt landlords to reduce asking rents to stay competitive. However, unless mortgage rates decrease and the sales market picks up, any potential rent decreases may not be as significant as one might expect.

Read the Compass December 2024 Rental Report here.

In the News

The Real Estate Board of New York (REBNY) has launched a legal battle to block the newly enacted FARE Act, a new law designed to shift the responsibility for broker fees from renters to landlords.

The Fairness in Apartment Rental Expenses Act, which became law on December 14th, automatically passing after Mayor Eric Adams did not sign it within the required 30-day period, requires landlords to cover broker fees when hiring a broker to market their apartments. If they don’t, they face potential fines of up to $2,000. The law also mandates that the Department of Consumer and Worker Protection inform New Yorkers about the change through a public campaign.

For years, renters in New York City have borne the cost of broker fees, typically ranging from 10 to 15 percent of their annual rent, even when the landlord hired the broker. The FARE Act passed with overwhelming support in the City Council in November, securing a veto-proof majority with 42 votes in favor. However, REBNY immediately vowed to challenge the legislation, and on December 17th, filed a lawsuit in federal court in Manhattan to block it from taking effect in June.

REBNY’s general counsel, Carl Hum, criticized the law, arguing it would drive up rents and make housing harder to find for tenants. "This legislation will not only raise rents and make it harder for tenants to find housing, but it also infringes upon constitutional guarantees of free speech and contract rights," Hum said in a statement. "We look forward to our day in court."

The lawsuit claims that the FARE Act violates brokers' First Amendment rights, particularly their ability to publish open listings on various rental platforms. The lawsuit also contends that the law violates the U.S. Constitution’s contract clause by preventing brokers from entering agreements with landlords to advertise their apartments and receive compensation from tenants.

City Council member Chi Ossé, who introduced the FARE Act, criticized the lawsuit, calling it a “last desperate attempt” by the real estate lobby to maintain outdated practices. "This lawsuit is an effort to undermine the voices of city residents and keep in place an irrational practice that is no longer allowed in nearly every other major U.S. city,” Ossé stated.

In addition, the lawsuit argues that the state, not the city, should be responsible for regulating broker fees. The New York Department of State’s Division of Licensing Services currently oversees complaints against brokers and enforces real estate regulations.

This legal action is not the first time REBNY has sought to block changes to broker fee rules. In 2020, the group successfully overturned a decision by the Department of State that sought to eliminate broker fees under the 2019 rent reforms.

The FARE Act’s path to passage was not without controversy. First introduced in 2023, it failed to gain traction due to strong opposition from REBNY. But after a public push in 2024, including support from local celebrities, Ossé reintroduced the bill, leading to its eventual passage. During the process, brokers voiced concerns that landlords would increase rents to cover the cost of broker fees.

When the law passed in November, Ossé celebrated its victory, stating, “the era of the captive tenant may finally be over.” However, with REBNY’s lawsuit now in play, it seems the battle over broker fees is far from finished.

City Spotlight: Lektrik

Don’t miss 'Lektrik,' the enchanting light show at Queens Botanical Garden. More than 1 million LED lights illuminate a lush garden pathway, featuring giant lanterns and 40 breathtaking lamp scenes. Crafted by 150 artisans using 120 tons of steel and 150,000 feet of silk, the display is enhanced by acrobatic performers, stone carving, an artisan market, and ambient music.

Click here for more information.

Just Listed

Clinton Hill

110 Clifton Place, Unit 2A

1 BD 1 BA $950,000

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.

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.

Coming Soon

UPPER EAST SIDE

360 East 88th Street, Unit 20D

2 BD 2.5 BA 1,338 SF

This bright, corner home is newly renovated and offers unobstructed views from two different exposures, tons of closet space, a built-in home office, an in-unit washer/dryer, central AC, automatic blinds, two bedrooms (both of which can accommodate king-size beds), and 2.5 bathrooms. The apartment offers an open layout with hardwood floors throughout, recessed lighting, and south and east exposures with panoramic city and endless river views.

For more information, please contact me.

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.

In Contract

Lenox Hill

530 East 72nd Street, Unit 14E

2 BD 2 BA $1,175,000

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. Currently configured as a two-bedroom, this expansive layout can easily accommodate the addition of a third bedroom.

Lenox Hill

400 East 70th Street #3003

2 BD 2 BA 1,150 SF $1,999,000

Perched on the 30th floor with breathtaking views from three different exposures, this expansive home has been fully renovated, and not a single detail has been overlooked. Enjoy 75 square feet of private outdoor space, an open chef’s kitchen with top-of-the-line appliances and a large island, and laundry just down the hall, all in a full-service condo.

Upper West Side

150 West End Avenue, Unit 21H

1 BD 1 BA 900 SF $799,000

This spacious home is bright and offers stunning views of the building's garden. Set in an ideallocation on West 66th Street, this home is proximate to tons of dining options, transportation, and cultural institions.

Just Sold

Astoria

21-21 31st Street,

Unit 5C

1 BD 1 BA 702 SF

Offered furnished or unfurnished.

This newly constructed southeast-facing one-bedroom features oversized windows that fill the home with natural light all day long. With high ceilings, an in-unit washer/dryer, and a private balcony, this residence offers modern comfort and style. Situated in the heart of Astoria, The Rowan is just steps from great restaurants and major transportation.

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 1/13/2025. 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 spots for sledding to the coziest spots for hot chocolate, it's as simple as sending me an email.

Licensed Associate Real Estate Broker

M: 917.952.0414

rebecca.orbach@compass.com