T
he Manhattan and Brooklyn real estate markets are poised to make a comeback in 2025 after nearly three years of decline. Drawing on trends from late 2024, here are five predictions that will define the year ahead:

    #1: Buyer Resurgence

    The fall season ended with a surge in activity, marking a pivotal shift in sentiment indicators and liquidity. The rolling 30-day pace of contracts signed finished November 36% higher than last year and 33% higher than 2022, indicating a sustained return of buyers to the market.

    #2: Limited Seller Inventory

    Spring is typically Manhattan's busiest season for new listings, but a flood of inventory in 2025 seems unlikely. Sellers may be cautious after years of market uncertainty, preferring to wait for solidified demand before listing. This restraint could create a more competitive environment for buyers, particularly for renovated or well-priced homes.

    #3: Fixer-Uppers Gain Appeal

    After years of paying premiums for move-in-ready homes, buyers may rediscover properties with renovation potential. With costs and construction timelines stabilizing, rising prices could make fixer-uppers increasingly attractive in 2025. The renovation premium has been gradually returning to its historical average.

    #4: Rents Remain High

    The FARE Act aimed to cool the rental market by reducing transactional friction, but it doesn't address the underlying issue of a lack of new rental supply. Without an influx of new inventory, demand will continue to push rents higher, especially in competitive markets like Manhattan and Brooklyn.

    #5: Prices Will Rise Steadily

    If stronger buyer activity and tighter inventory continue, Manhattan and Brooklyn may see steady price growth throughout 2025. While increases are unlikely to be dramatic, they will reflect a market regaining its footing, buoyed by renewed confidence and resilience.