As 2024 comes to a close, the Manhattan real estate community is cautiously optimistic about the upcoming spring market, which typically begins in early to mid-February and extends through mid-June. Traditionally, this period marks the busiest season for residential real estate sales in the area. Despite challenges over the past year - such as elevated interest rates and a wait-and-see attitude from both buyers and sellers -there has been a slight uptick in activity in recent weeks, driven by the conclusion of the election, a modest decline in interest rates, and increasing consumer confidence. These trends, coupled with pent-up buyer demand, are expected to continue, offering hope for a more robust spring market ahead.

Our expectations for a strong spring market are driven by several key factors:

• Seasonal Activity: Spring has traditionally been the peak season for residential real estate in New York City, with a surge in buyer and seller engagement fueling the market.
• Post-Election Clarity: Historically, the conclusion of a presidential election—regardless of the outcome—leads to increased real estate activity as buyers and sellers feel more confident with greater certainty about the political and economic environment.
• Interest Rates: While mortgage rates remained elevated throughout the year, there was initial optimism that they might decrease following the Federal Reserve's rate cuts in September and November. In response to these cuts, mortgage rates did briefly dip in September, sparking a rise in sales as savvy buyers took advantage of the moment. However, the decline was short-lived, and rates began climbing again, tempering the expected uptick in activity. Mortgage rates are influenced by broader market expectations and economic trends, not just Federal Reserve policies. Looking ahead, we anticipate further rate cuts early next year, which could lead to a more sustained reduction in mortgage rates, increased inventory as sellers unlock lower-rate loans, and revitalized market activity.
• Wall Street Bonuses: With the stock market demonstrating strong growth over the past two years, many investors have focused on equities rather than real estate. However, given the robust economic performance across various sectors, Wall Street bonuses are expected to be substantial in early 2024. Historically, these bonuses boost activity in the real estate market, especially in high-end segments.
• Pent-Up Demand: High interest rates in recent years have deterred many buyers from entering the market. As rates potentially ease and inventory expands, this pent-up demand is expected to translate into increased market activity.
• School Acceptance Season: Families with school-age children often base their home-buying decisions on private and specialized public school acceptance timelines, which occur in February and March. This seasonal factor typically boosts demand for larger apartments during this period.
• Rising Rents: Median rents rose by 2.4% in October after months of stagnation or decline, signaling increased demand in the rental market. This trend often translates to heightened interest in home purchases as renters seek stability.
• Increased Activity in October and Early November: In October, Manhattan sales volume jumped 27% year-over-year to 1,066 reported contracts, marking the strongest October and the largest annual percentage gain since 2021. It also represented the fifth consecutive month of year-over-year sales growth. Lower mortgage rates in September, strategic price adjustments, and new inventory contributed to this improvement. The luxury market performed particularly well, with contracts over $5 million up 54% annually, driven by new developments in prime locations. November continued this momentum, with contracts up 23% and 15% year-over-year during the first two weeks, respectively, totaling 445 contracts signed compared to 374 in the same period in 2023.
  

These combined factors suggest a promising outlook for the spring real estate market in New York City, with potential growth across multiple sectors. For buyers, this could be an ideal time to act before demand and competition intensify in 2025.