No Fooling! The Manhattan Real Estate Market is Gaining Strength

Before we dive into the Q1 highlights, let’s rewind to understand how we got here.

After Covid, Manhattan experienced one of its busiest markets — not because prices skyrocketed, but because deal volume surged. Fast forward to June 2022: The Fed’s actions to slow the economy sent mortgage rates from 3% to 6% and even touched 8% seemingly overnight. This shift instantly stalled momentum in Manhattan’s real estate market, which was already facing challenges pre-Covid. Since then, we've seen persistently low listing inventory and weak transaction volume. There have been occasional bursts of buyer activity, but Q1 2025 is showing the strongest recovery signs we’ve seen since mid-2022. To be clear: this is not a full-blown comeback, but it's the best market activity we’ve had in about three years.

The Volume Trap

For the past three years, Manhattan has been stuck in a low-volume market. Many sellers who bought in 2015/2016 have seen little to no price appreciation — property values and median price per square foot have been flat for nearly a decade. Naturally, sellers have been reluctant to list if it means losing money. Rising interest rates didn’t help either.

But here’s the good news: In the past month, more listings have hit the market, offering buyers more choices. At the same time, mortgage rates have been gradually falling and now sit around 6.25%. Many buyers can even secure rates below 6% through relationship banking or lender incentives.

A Notable Shift

For the first time in over a year, we’ve surpassed 1,000 contracts signed in a 30-day window. The big question now is: can this momentum last? Many experts are optimistic about Q2 2025 thanks to three key factors:

Increased inventory
Lower interest rates
Strong local economic indicators — including record-setting Wall Street bonuses. This year alone, $47 billion will be paid out to executives, with the lowest bonus coming in at $244,000 — enough for a healthy down payment on a Manhattan one-bedroom. Bonuses are up over 31% compared to last year, giving buyers additional purchasing power.

Pricing is Critical

Despite the encouraging signs, this isn’t a market where sellers can price aggressively. Buyers remain highly sensitive to pricing. If a property is overpriced and lingers on the market for more than 120 days, sellers typically end up accepting about 9% less than the reduced asking price. However, if a property goes into contract within the first 60 days, that discount shrinks to just 2%.

In short, correctly pricing your property is more important than ever. While we’re finally seeing promising signs — more listings, more contracts, and a stronger buyer presence — it’s still a delicate recovery. Sellers who price smartly are the ones who will secure strong offers and close with confidence.

So yes, it may be the best spring market we've had in years, but it’s still not the market to get greedy.