By Serj Markarian, Licensed Associate Real Estate Broker

First, I want to take a moment to send our thoughts to our friends on the West Coast. If you're looking for ways to help, I've included some helpful links at the bottom of this post.

Meanwhile, here on the East Coast, Manhattan’s residential market closed Q4 2024 on an unexpected high note. A combination of lower prices, a decline in mortgage rates, and a strong economy unleashed latent demand, driving sales higher. This surge reduced inventory levels and significantly shortened days on the market.

The limited supply of available properties, coupled with a booming stock market, shifted the market into positive territory. Many buyers, buoyed by increased wealth, felt ready to invest after a prolonged period of cautious observation.

Q4 2024 served as an important litmus test for Manhattan’s real estate market. Despite challenges such as election-year uncertainty, intensifying global events, fluctuating mortgage rates, and tighter inventory, the market demonstrated resilience. Sales improved as many buyers decided it was finally time to act.

Looking ahead, Brown Harris Stevens CEO, Bess Freedman, shares several reasons for optimism in 2025:

Stock Market Strength: Another banner year for the stock market in 2024 is expected to fuel purchasing activity. Wall Street bonuses, projected to rise 35% from last year’s $33.8 billion payout, will further bolster demand.
Economic Growth: Despite uncertainty, economic growth outpaced expectations in 2024, with strong consumer spending and a robust labor market. While growth may moderate in 2025, steady progress is anticipated.
Stable Supply: Unlike many U.S. housing markets, Manhattan maintains a healthy level of inventory, which should help keep prices stable in the coming year.

However, elevated inflation remains a concern. The Federal Reserve’s aggressive rate hikes from 2022–2023 helped temper inflation but didn’t fully align with the Fed’s 2% annual target. This may limit rate cuts in 2025. Meanwhile, mortgage rates have been trending higher, with the average 30-year fixed rate recently hitting 7.17%, the highest since June.

Despite these headwinds, industry experts foresee a more balanced and robust market ahead. The momentum from Q4 2024 provides a strong footing as we enter 2025.

If you have questions about the Q4 2024 Manhattan Apartment Market Report or want to discuss your real estate plans for the year ahead, feel free to reach out.