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Which houses sell quickly – and which ones sit on the market?

New York City’s real estate market experienced a steady recovery in the first quarter of 2025, with demand for luxury condominiums driving sales despite broader economic uncertainty, according to the latest market report from Coldwell Banker Warburg.

The report highlights that while economic headwinds — including a shift in federal policy and volatile stock markets — have impacted various industries, the residential real estate market in Manhattan and Brooklyn remains resilient. Luxury properties, particularly those priced above $4 million, continued to see steady contract activity, averaging about 30 transactions per week. The majority of these transactions were in the condominium space, a trend driven by buyers seeking move-in ready homes amid rising renovation costs.

Buyer preferences

Market segmentation remains a crucial feature of New York real estate. Neighborhood preferences continue to influence sales, with small, modern condominiums thriving in areas like the Lower East Side, while spacious three-bedroom apartments are in stronger demand in Tribeca and the Upper West Side. Meanwhile, Harlem — a market once thriving for young buyers and historic brownstone enthusiasts — has seen sales decline for the second year in a row. Contract activity in Harlem has fallen significantly from its peak in 2021, falling nearly 40% as of February 2025.

Tight inventory remains a challenge for buyers, especially for move-in ready properties. Older condos and row houses that require renovation still present value opportunities, but the increasing cost and complexity of renovations has deterred many potential buyers. Renovation costs have risen, with mid-range projects that once cost $250 to $300 per square foot now exceeding $700 per square foot, according to the report. This disparity has led to a market where well-maintained, move-in ready homes command premium prices, sometimes rivaling those from a decade ago, while properties that need significant work remain on the market.

The rental market affects buyers

The rental market continues to have a significant impact on buyer behavior. With rents remaining high and units often snapped up within 24 to 48 hours of listing, many renters are opting to purchase properties instead. However, competitive bidding wars remain more prevalent in the rental sector than in home sales, where price stabilization has been the prevailing trend. Median rents in key neighborhoods have reached record highs, with Manhattan’s median rent exceeding $4,500 per month.

Overall market situation

Despite the uncertainty surrounding national economic policy, the New York real estate market appears to be maintaining a steady trajectory. While large year-over-year gains are unlikely in the near future, experts suggest that the current climate presents opportunities for cautious buyers to invest in homes that will retain their value over time.