T
he New York City real estate market is driven by fundamental needs rather than politics. Despite a highly polarizing election and fluctuating interest rates in Q4 2024, the rental market showed signs of slowing to a more seasonal pace. The Olshan Luxury Market Report tracked weekly sales of Manhattan properties priced at $4 million and above, revealing inconsistent forces that buffeted the market.

    Weekly sales ranged from 19 contracts per week to 39, with two of the year's best weeks occurring in Q4. The Republican victory in the election seemed to soothe financial nerves, signaling a return to reduced regulation and taxation for the affluent. Condominiums continue to outsell co-ops at a rate of at least 3:1, driven by their modern amenities, high ceilings, and spacious rooms.

    Properties in previously less desirable locations are now receiving record prices, with Manhattan's total inventory approaching parity between co-op and condo apartments. However, the perceived problems with co-op ownership, including renovation requirements, continue to dampen prices. Younger buyers are shunning traditional status markers, opting for neighborhoods like Tribeca instead of Park and Fifth Avenues.

    The rental market has been unstoppable throughout most of 2024, with overbidding commonplace in both Manhattan and Brooklyn. However, the pace has slowed slightly in Q4, moderating prices. Looking ahead to 2025, the market may experience a modest uptick in the latter part of the year, driven by stabilized prices and more realistic seller expectations.