Market Reports

April 9, 2025 by Linette Semino

Navigating the Real Estate Market: Stability in Uncertain Times

In periods of market volatility and economic uncertainty, I’ve always believed real estate stands out as a reliable and stable investment. Unlike stocks, which can fluctuate dramatically based on headlines, market predictions, or global events, real estate is a tangible asset that provides long-term value and utility. And with New York’s proven history of real estate success, it’s clear that property remains a solid investment. Real estate offers unique benefits that stocks simply can’t: rental income, tax advantages, and the ability to leverage equity. It’s more than just an investment—it’s a physical asset you can live in, rent out, or pass down through generations.

Manhattan Real Estate Update: A Strong First Quarter: Manhattan apartment sales surged by 29% in the first quarter compared to the same period last year, with wealthy buyers seeking refuge from volatile stock markets. The first quarter of 2024 was slower than usual, which made the performance of 2025 appear even more attractive, according to Jonathan Miller, CEO of Miller Samuel. While sales saw a 29% increase, the total sales were only slightly (1.1%) above the historical 10-year average. Let's dive deeper! There were 2,560 closed sales in the first quarter, a rise from 1,988 a year ago, according to Miller Samuel and Douglas Elliman. The total sales value also saw a significant increase, reaching $5.7 billion—a 56% jump from the previous year.

Much of this growth has been driven by the luxury market, with sales of apartments over $5 million increasing by 49% year-over-year, as reported by Compass. The ultra-luxury segment (properties priced over $20 million) had its best first quarter since 2019. However, this increase has been largely driven by high-end buyers, who tend to purchase properties in cash, making them less sensitive to high interest rates. In fact, 58% of sales in the quarter were all-cash transactions, with properties above $3 million seeing a staggering 90% of sales from all-cash buyers.

What the Tariffs Mean for the Market: With recent tariff announcements, you might be wondering how this could impact the real estate market. According to our Founder & CEO, Robert Reffkin, the market may be shifting from a seller’s to a buyer’s market. This could mean more inventory and better pricing for buyers. For those who’ve been on the sidelines, now may be the ideal time to take advantage of the current conditions. With mortgage rates at a 6-month low, buyers are seeing increased purchasing power.

In this shifting market, sellers can secure the best outcomes with our proven 3-phase marketing strategy. We begin by listing homes as Compass Private Exclusives, which transitions to Compass Coming Soons. This strategy helps avoid public exposure to any price drop history or prolonged market time, both of which can harm a property’s perception. In a buyer’s market, properties that experience price reductions or extended days on the market can be perceived as less desirable. Our approach ensures that sellers can present their homes in the best light, maintaining a strong, competitive position.

A Growing Trend of Price Drops: Did you know that 35% of homes currently on the market have already seen a price drop? With the current economic shifts, this number is likely to increase. This can be a risky trend for sellers, as homes that undergo price reductions or linger on the market for too long can become stigmatized. That’s why strategies like Compass Private Exclusives and Compass Coming Soons are so critical right now—they allow us to test pricing without exposing your home to the public’s view of price drops or days on market.

Opportunities in the $1 Million to $3 Million Range: Sales in the $1 million to $3 million range have slowed, as many buyers in this category are hesitant about the current economic climate. However, I believe this presents an opportunity. Buyers in this range may be able to negotiate favorable deals on properties that have been on the market for some time or require renovation. Many of my clients are also exploring alternative financing options, such as borrowing against their investment portfolios, with plans to refinance later.

Conclusion: The real estate market remains a strong and stable investment, even amidst economic uncertainty. Whether you’re a buyer or a seller, it’s crucial to navigate these changes with a clear strategy. If you’re ready to make a move or need expert guidance, The Semino Team is here to help you!