New York City’s real estate market remains a global benchmark for dynamism, resilience and complexity. As of 2025, the market is navigating a period of cautious optimism, shaped by macroeconomic factors, shifting buyer and renter preferences, and innovative policy changes.
The New York City real estate market in 2025 is characterized by steady growth, tight inventory, and a recalibration from the volatility of the post-pandemic years. After nearly three years of decline, the market is showing signs of stabilization and recovery, particularly in Manhattan and Brooklyn.
Median home prices across the five boroughs have risen modestly, with the citywide median sale price reaching approximately $770,000, a 2.1% year-over-year increase. Brooklyn and Queens are experiencing stronger price appreciation, while Manhattan’s luxury market is rebounding after a lukewarm period. The commercial sector is also seeing gradual recovery, with newer office spaces commanding premium rents, though older properties face challenges.
Key market indicators
Median Home Prices: $770,000 citywide, with Manhattan at $1.23 million, Brooklyn at $875,000, Queens at $700,000, the Bronx at $590,000, and Staten Island at $660,000.
Inventory Levels: Active listings are down 9% from Q1 2024, contributing to seller pricing power.
Days on Market: Properties are averaging 62 days on the market, up from 48 days in 2024, indicating a more balanced market.
Sales Activity: Manhattan saw a 29% increase in apartment sales in Q1 2025, with total sales volume reaching $5.7 billion, a 56% jump year-over-year.
Rental Market: Citywide median asking rent is $3,900, up 2.7% from 2024, with Manhattan rents at $4,595, Brooklyn at $3,634, and Queens at $3,150.
NYC’s residential market is experiencing measured growth, with home prices climbing at a sustainable pace compared to the frenzied post-pandemic boom. The citywide median asking price in May 2025 was $1.1 million, up 2.3% year-over-year. Manhattan remains the priciest borough with a median asking price of $1,495,000, while Brooklyn and Queens saw stronger gains at 3.9% and 10.6%, respectively. Nationally, the median home price in May 2025 was $422,800, highlighting NYC’s premium pricing.
Despite this growth, affordability remains a significant challenge. Mortgage rates, averaging 6.67% for a 30-year fixed-rate mortgage as of July 2025, have stabilized but remain high compared to historical lows. This has made buyers more price-sensitive, with many seeking value in co-ops, which are 26% less expensive than comparable condos. The Fairness in Apartment Rental Expenses (FARE) Act, effective June 2025, is also reducing upfront rental costs by requiring landlords to cover broker fees, potentially easing the financial burden on renters.
Inventory remains tight, with a 9% drop in active listings compared to Q1 2024. However, new listings are up 16.8% in the five boroughs compared to the surrounding suburbs, giving buyers more options in the city. The most desirable properties, particularly in the top 20% of listings, are selling at or above asking price with no reductions, indicating fierce competition.
In Manhattan, inventory under $2 million is seeing modest gains, while high-end listings remain active. Brooklyn and Queens are experiencing significant inventory growth, with 13.6% and 14.9% year-over-year increases, respectively. This increase is encouraging more sellers to list, driven by elevated prices and slightly lower mortgage rates compared to 2024 peaks.
Co-ops are poised for a resurgence in 2025 due to their affordability relative to condos. With median condo prices 26% higher than co-ops for similar properties, buyers facing high asking prices and mortgage rates are increasingly willing to navigate the often complex co-op approval process. New co-op listings dropped 4.5% in 2024, while condo listings rose 7.3%, positioning co-op sellers favorably in a competitive market.
The luxury market, defined as the top 10% of listings, is heating up after two years of slower activity. The starting price for luxury properties dropped 6.1% from $4.95 million in December 2023 to November 2024, making high-end homes more accessible. With corporate bonuses expected to rise in 2025 and interest rates projected to ease to 6.0–6.5% by year-end, luxury buyers are re-entering the market, particularly in Manhattan. Cash deals dominate this segment, with 58% of Manhattan sales in Q1 2025 made in cash, and 90% of sales above $3 million.
Investors and buyers are increasingly looking beyond Manhattan to emerging neighborhoods offering value and growth potential.
Long Island City (Queens): Continued infrastructure improvements and new amenities are driving demand, with prices up 12% year-over-year.
South Bronx: Neighborhoods like Mott Haven and Port Morris are seeing significant investment due to affordability and redevelopment projects. Prices are up 6% annually.
Eastern Brooklyn: Areas like East New York and Brownsville are following the gentrification path of Williamsburg, offering strong upside for early investors.
Rockland County: Though outside NYC, this suburb is attracting investors seeking lower entry costs and proximity to the city.
These neighborhoods are benefiting from shifting buyer priorities, including affordability and access to modern amenities, as well as infrastructure upgrades like the Staten Island Ferry enhancements.
The NYC rental market remains competitive, with a citywide median asking rent of $3,900 in May 2025, up 2.7% year-over-year. Manhattan is the most expensive borough, with a median rent of $4,595, up 4.4%. Brooklyn and Queens are seeing slower rent growth at 3.8% and 3.3%, respectively, with median rents of $3,634 and $3,150. The city’s vacancy rate hit a 60-year low of 1.4% in 2023, driving demand for new developments, particularly in Brooklyn and Queens.
The FARE Act has increased transparency in rental fees, with 56% of rentals in May 2025 not charging tenants a broker fee, the highest share since the pandemic. This has led to a 74% year-over-year drop in new rental listings on agent-facing platforms, as the market adjusts to the new regulation.
Brooklyn and Queens are emerging as dominant rental markets, with inventory growth outpacing Manhattan. Neighborhoods like Gowanus (226% inventory increase) and Flushing (50% increase) are seeing significant rental activity. Jersey City and Hoboken are also gaining traction, with median rents of $3,160, potentially surpassing Brooklyn as the most expensive non-Manhattan rental markets. Renters are drawn to these areas for modern buildings, amenities, and relative affordability.
New Yorkers are prioritizing amenities that enhance at-home living, driven by hybrid work trends and air quality concerns. Searches for apartments with outdoor space have surged 116.6%, while pools and gyms saw increases of 61.8% and 11.2%, respectively. In-unit laundry and central air remain top priorities, but buildings offering pools, rooftop terraces, and pet-friendly spaces are commanding premiums.
NYC’s commercial real estate market is recovering, particularly for newer office buildings with modern amenities. These properties are commanding higher rents, while older office spaces struggle. Developers are addressing housing shortages by converting up to 17 million square feet of office space into residential units, revitalizing communities and boosting supply.
Robust demand for retail space has nearly exhausted top-quality supply in Manhattan, with sustained tenant interest expanding to secondary locations. High-quality retail and office assets in prime locations are seeing strong rent growth, while commodity spaces stagnate. Investment volumes for office and residential assets are improving as buyer confidence returns.
Mortgage rates, currently at 6.67% for a 30-year fixed-rate mortgage, are a significant driver. Forecasts predict rates will fall to 6.0–6.5% by the end of 2025, potentially boosting buyer activity. Trump’s tariffs have increased construction costs, with steel prices up 22% year-over-year, delaying projects and limiting new supply. These costs are pushing developers to focus on strategic pricing and sustainable practices to comply with regulations like Local Law 97.
The return of affluent buyers from places like Florida and Los Angeles, driven by return-to-office mandates from major banks and corporations, is enhancing market activity. This trend is particularly strong in Manhattan, where financial sector jobs and higher Wall Street bonuses are fueling demand for luxury properties.
Gentrification is pricing out lower-income New Yorkers, with tech workers from San Francisco contributing to rising costs in culturally significant neighborhoods. Meanwhile, migration trends show some New Yorkers moving to cities like Los Angeles, though returnees are boosting local demand.
The City of Yes zoning plan and Midtown South Mixed-Use Plan aim to create nearly 10,000 new homes in Manhattan, addressing the housing crisis. These initiatives are expected to increase supply and affordability in the long term, though short-term impacts are limited by construction delays.
It is predicted a slight cooling in the NYC housing market, with home values in the New York-Newark-Jersey City metro area ($705,108 as of 2025) expected to decline by 1.2% by May 2026. However, the city’s resilience, driven by strong demand and limited supply, suggests continued price stability in prime areas.
Co-op Resurgence: Increased buyer interest in co-ops due to affordability.
Luxury Market Growth: Rising corporate bonuses and easing rates will fuel luxury sales.
Rental Market Stabilization: Brooklyn and Queens will see slower rent growth due to increased inventory.
Emerging Neighborhoods: Long Island City, South Bronx, and Eastern Brooklyn will offer strong investment returns.
Construction Challenges: Tariff-driven cost increases and permitting delays will constrain new supply, supporting price appreciation.
The NYC real estate market in 2025 is a landscape of opportunity and challenge. Steady price appreciation, tight inventory, and a rebounding luxury market signal resilience, while high mortgage rates and construction costs pose hurdles.
Emerging neighborhoods and policy changes like the FARE Act and City of Yes zoning are reshaping the market, offering new possibilities for buyers, sellers, renters, and investors. By staying informed and strategic, stakeholders can navigate this dynamic market successfully.
Whether you’re eyeing a co-op in Manhattan, a rental in Queens, or an investment property in the South Bronx, understanding these trends is key to making informed decisions in the city that never sleeps.