Photo-Illustration: Curbed; Photos: Getty
“Since Thanksgiving, the phone has been ringing off the hook,” says Corcoran associate broker Deborah Rieders. It’s been the same for Abigail Palanca, an agent at Serhant, who had nine packed open houses in Brooklyn last weekend. “We had between five and 12 buyers at each one.” This came as something of a surprise: She was expecting the traditional quiet that falls on the industry each year in the last few weeks of December. “But that hasn’t been the case.” Lisa Simonsen, an associate broker at Brown Harris Stevens, has seen a similar flurry of activity: “I don’t want to use the word bombarded, but …” The sudden surge in interest, after a stalled and sluggish last few years, has made brokers almost giddy and raised hopes for 2025. Not that it would take all that much to improve the situation. “High interest rates, inflation, low inventory,” says Bess Freedman, CEO of Brown Harris Stevens. “Sellers don’t list because they’re locked into an interest rate that’s really low and buyers have been waiting.”
Broker glee doesn’t always translate to good news for the average buyer, but there may be reason to feel, if not optimistic, slightly less down about the coming year. Brokers are predicting less of a market shift than an adjustment in mind-set among buyers and sellers — fewer holdouts waiting for an interest chop that will likely never come (at least not this year). That means more movement in the market, which means inventory. Also: Maybe try a co-op. As for the high-end buyers and sellers? Well, all-cash buyers have been doing the bulk of the deals in this market, so they’ve been fine, but brokers say they may have reason to feel extra fine in 2025.
Nationally, the National Association of Realtors is projecting just 4 million home sales, the lowest number since 1995. But the New York market is wealthier and weirder, so we fared better — particularly the high end of the market, where many of the transactions are all cash (in Manhattan, more than half of all deals are all cash, and several brokers told me they’ve basically done nothing but since interest rates went up). For example: One High Line, the twisty Bjarke Ingels project in Chelsea formerly known as the XI, closed over $800 million in sales during the first half of the year with a number of big-ticket apartments hitting records these last few months, including a $47 million penthouse.
“It’s kind of a rich people’s playground here,” says Scott Harris, an associate broker at Brown Harris Stevens. For him, that’s translated to a good sales year — sellers who’ve been spinning their wheels can afford to move on, even if it means taking a loss (which it often does if they bought in the last decade) and all-cash buyers are snapping up the deals. “People have enough money to do what they want to do — a home isn’t necessarily the biggest asset like it is in some parts of the country,” he says. “They may have waited for years to sell, kicked the can down the road; they’re ready to transact now, even if it means losing money.” One of his sellers, a couple in Chelsea with a beautiful 2,200-square-foot high-floor loft that once hosted Hilary Clinton at a political fundraiser, has been thinking about selling since 2018. After renting it out for a few years, they decided they were ready to be done with it and accepted an offer of $2.8 million, a million less than they paid in 2015.
Buyers, on the other hand, are thrilled. Harris is representing buyers who just got board approval with an offer in the low $3 millions for a Central Park West co-op that’s basically fully renovated, save for maybe a maid’s bath; a unit in the same line in similar condition traded in the low $4 millions a few years ago. As with so many deals this year, however, people are digging in their heels over minor things. In this case, the seller got “a little persnickety” and wanted to take the light fixtures (he was eventually persuaded to leave them behind). “It’s a symptom, not the problem,” says Harris. “They’re mad they’re losing money, and they’re holding on to something. They turn that into the thing, but it’s not the thing.”
Other brokers also say deals have been unusually problematic this year. Some of that’s buyers trying to negotiate, and some of that’s the nature of the properties that are selling well right now — i.e. Brooklyn brownstones, where issues may crop up across decades and generations without anyone noticing until a sale is well underway. “People dragging their feet, things coming up in title searches, inspection issues, final walk-through issues, probate issues, fines, permits that hadn’t been closed, violations that no one knew existed. Every deal involved so many hurdles to jump through,” says Palanca, the Serhant agent, describing some of the hiccups she’s dealt with in 2024. Her messiest deal didn’t even end up closing, after the inspection revealed a host of issues that even the sellers weren’t aware of: There were only nine electrical panels throughout the entire house, there was a crawl space no one knew existed, and, most damning, half the light in the house came from lot-line windows that all needed to be replaced and that DOB would have required to be closed up. “Initially the buyers were like, ‘Okay, this is why we’re getting such a great deal,’” she says. In the end, however, they just decided there were too many problems.
Rieders agreed that it has been “harder to put deals together — people expect negotiability.” Some of that messiness comes from the tight inventory — buyers are paying a lot for properties they might have passed on in a different market. Brownstones, for example, sell for a lot no matter the condition. Rieders just listed a $3.2 million townhouse in Carroll Gardens that’s “super-charming in a super-prime location” but definitely needs some work. It got five offers in seven days. After Palanca’s listing at 1642 11th Avenue, a fully renovated barrel-fronted beauty in Windsor Terrace, sold this summer for $3.075 million following a seven-offer bidding war, another townhouse a few doors down that needed a gut reno got swarmed, too, resulting in a four-person bidding war. The winners were a couple who’d lost out on the turnkey property and didn’t want to let another one get away, even though they hadn’t wanted to do a renovation.
So where does this leave buyers without a few million in cash to throw down on a dilapidated brownstone? Your best bet is probably to buy a co-op. Some experts think that the lack of inventory, particularly affordable inventory, may help revive interest in them. Co-ops, while they are a far better deal than condos on a cost-per-square-foot basis, need work more often than not, and a lot of buyers don’t want to deal with that, the boards, or the rules. But for buyers who need a mortgage, co-ops really are the most reasonably priced option, even if some of the more rarefied ones in Manhattan have financing limits and liquidity requirements that mean they’re only a good deal for people who can afford such requirements. “Co-ops really present an opportunity for buyers out there, especially because affordability is so constrained,” says StreetEasy senior economist Kenny Lee, who adds that he himself picked one up in Jackson Heights a few years back. “We do know that buyers prefer condos, but they cost on average 26 percent more than co-ops of a similar size with similar amenities. With asking prices and mortgage rates expected to stay high, co-ops will become more appealing.”
Kunal Khemlani, an agent at Corcoran, says co-ops are already popular with many of the buyers he’s working with — first-timers, many of them living in expensive neighborhoods like Long Island City and Williamsburg, looking to spend less than a million and take out a mortgage instead of continuing to pay high rents. In Sunnyside, Woodside, and Jackson Heights, spacious co-ops in good condition attract bidding wars, he says, like the fully renovated two-bedroom in Sunnyside a client of his just lost out on. It had nice light, low monthlies, parking, and an asking price around $500,000. Another client, a couple from Williamsburg, snapped up a bright two-bedroom in Jackson Heights for $450,000, pushing further into the borough, where the apartments are larger, after finding the one-bedrooms in Sunnyside too small for their needs.
For Simonsen, sales in the Upper East Side co-op market have been brisk, particularly the last few months of the year. She ticked off recent deals she’d done for $5 million and $8 million at 784 and 1095 Park Avenue, and three pieds-à-terre that sold from $2 million to $5 million on Fifth Avenue. “The common thread here is that the Upper East Side is hot right now,” she says. And while all of those apartments were renovated, she has seen buyers willing to put the time and money into places that need work, like a two-bedroom she sold this year at 907 Fifth. “A lot of these buildings have relaxed their summer work rules, and you’re getting a lot more space, which matters when a lot of the buyers coming uptown are young familiars planning to have children,” she says.
Rieders says she’s seen a lot of activity at the top and the bottom of the market — people buying two-bedrooms with financing in neighborhoods like Bed-Stuy and Bushwick because it’s cheaper than renting. People also love new construction as long as the monthlies are low: At 87 Irving Place, a Clinton Hill condo she represented, 21 of the 25 units, with prices ranging from $900,000 to $2.85 million, sold in two months. What’s not moving are the properties that are habitable but dated. “Livable but not au courant, not a wreck but not brand new, priced a little high, the middle of the market. That’s the hardest,” she says. “In a super-market like 2021, people just looked past that.” Not anymore.
The demand is there, though, even if the buyers and sellers aren’t. February and August, when interest rates dropped modestly, were the busiest months of the year, Rieders says, which is totally atypical, and indicates that buyers really are waiting in the wings. For years now, since interest rates shot up abruptly in spring 2023, buyers have been hanging on, waiting for them to go down. This was very much the case at the start of last year. But now, no one is expecting a big drop anymore, just modest dips (the Fed just cut the rate a quarter point). Which means that if you want to buy, you may as well, because this is pretty much the new reality. It’s a state of acceptance that brokers believe may be driving the surge of late-season interest: “I think people have really made peace with the fact that there might not be rate cuts for now,” says Palanca. “Everyone is really sick of that saying: ‘Date the rate, marry the property.’ They’re saying, ‘Let’s just get married from the beginning: to the rate, to the property, to the financial reality of what we can afford.’”
It’s not all about interest rates, though. “A lot of people talk about the interest rates, but I think the low inventory was just as much of a problem,” says Khemlani. “People are willing to stomach a 6.5 or 7 percent interest rate, but there has to be an apartment they like.” But there are indications that inventory may improve too. As brokers told me, people get to a point where they just need to move: They had a kid, or several kids; they need to relocate for work; their current place is too big or too expensive. (Rieders told me she just got a listing in December, which is unusual — conventionally, people wait to list until after the holidays.) Besides, rental prices have finally stabilized — they’re up 2 percent this year compared to last year versus 15 percent the year before, according to StreetEasy. And rental broker fees will be far less common after the new City Council bill, so we should see some more movement between the rental and sales markets.
Based on the last few months, at least, everyone is optimistic that in this new reality of high-ish rates and a second Trump presidency (however buyers feel about it, the anxiety of the election has passed), the cautious, wait-and-see approach of the last few years will fade away, ushering us into a more normal market. A market where people aren’t hunkering down in less-than-ideal places because they have a 3 percent rate or waiting for rates to fall to 3 percent again before they put in an offer. “It has to get better this year,” says Freedman. Besides, she adds, “Wall Street bonuses are going to be epic.”
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