This year was one for the real estate history books in New York City, with buyers and renters alike battling record-high costs. A late-year, temporary drop in mortgage rates and the City Council passing the FARE Act in November offered some optimism, but StreetEasy’s predictions for 2025 show that affordability will likely be the biggest driver of trends in both the for-sale and rental markets.

Here are StreetEasy’s key predictions for the NYC housing market in the coming year.

1. Co-ops will make a comeback

Amid high asking prices and a shortage of affordable homes on the market, 2025 will likely see buyer interest surge for co-ops and their relatively lower price tags. Co-ops tend to be less expensive than condos: this year, NYC condos sold for 26% more on average than co-ops with similar square footage and amenities. However, buyers sometimes avoid co-ops due to the often arduous approval process. But as mortgage rates and asking prices remain high, more buyers may begin to see co-ops as worth the effort.

With fewer new co-op listings for sale compared to condos, co-op owners looking to sell next year should be well-positioned to do so. The number of new co-op listings fell 4.5% this year from the previous year, while the number of newly-listed condos jumped 7.3% as owners looked to take advantage of the competitive condo market in NYC. Though affordability challenges will persist, the current Goldilocks moment in the NYC sales market — in which rising new inventory is balanced by increased buyer demand from lower mortgage rates — signals opportunities for sellers as well as buyers. As the spring home-shopping season approaches, co-op sellers should start thinking about pricing and marketing their home strategically to attract these bargain-hunting buyers.

2. Suburban competition will make New York buyers look inward

In 2025, buyers who may have considered leaving the city in recent years will likely find NYC more attractive once again, due to limited inventory in the suburbs fueling fierce competition among buyers. The New York metro area is a strong sellers’ market, according to the Zillow Market Heat Index, but much of the activity is concentrated in suburban markets within commuting distance of NYC, with well-priced homes flying off the shelves.

Compared to nearby suburbs, the city’s sales market has seen a stronger increase in new listings this year, giving buyers more fresh options to consider and a stronger negotiating position. This year through October, 29,948 homes joined the market in the five boroughs, an increase of 16.8% from the year before. By comparison, the number of new listings in the six counties surrounding NYC (Fairfield County, CT; Bergen County, NJ; Hudson County, NJ; Nassau County, NY; Rockland County, NY; and Westchester County, NY) was up just 1.4% from the same period last year. 

Contrary to common belief, many homes for sale in NYC spend more days on market than homes in the surrounding six counties, giving buyers looking in the city more time to decide. According to Zillow data, homes in these counties spent a median of two to five weeks on the market. By comparison, homes in the five boroughs spent a median of nine and a half weeks on market before entering contract, up one day from a year ago. 

3. The luxury market will boom

NYC’s luxury sales market has been considered lukewarm at best over the past two years, but in 2025, the luxury sales market will likely heat up. Lofty asking prices in recent years, and a shrinking pool of buyers able to afford them, have resulted in slower sales and a spike in demand for luxury rentals instead. The starting price of the luxury market — defined as the most expensive 10% of listings in NYC — reached $4.95M in December 2023, the highest threshold since 2018. 

However, since its peak in December 2023, the starting price of the luxury segment is down 6.1% as of November this year, putting more potential buyers within reach and suggesting we’ll see an increase in luxury transactions next year.

While luxury buyers often rely on cash or other liquid assets, high interest rates across the economy likely pushed wealthy home shoppers to take a more cautious approach to investing in real estate this year. But with rates expected to ease in 2025 and corporate bonuses expected to rise for the first time in three years, luxury buyers and sellers will likely be more willing to rejoin the market.

4. Rental markets across the rivers will increasingly heat up

More renters in 2025 will expand their search across New York’s rivers — to both the east and west. Brooklyn and Queens combined will potentially surpass Manhattan as the largest rental market in NYC. Meanwhile, Jersey City and Hoboken appear poised to overtake Brooklyn as the most expensive rental market outside Manhattan.

Due to the city’s low vacancy rate — hitting a 60-year low of 1.4% in 2023 — new rental developments have been playing a more prominent role in the NYC market. Many of these new developments are in Brooklyn and Queens, which led the two boroughs to rapidly catch up to Manhattan in rental inventory in 2024. The trend will continue next year, especially as renters increasingly show a preference for modern buildings and amenities. Rising inventory in Brooklyn and Queens will help stabilize the city’s rental market, as well as slow down rent growth in these boroughs and the rest of the city.

Meanwhile, to the west across the Hudson River, Jersey City and Hoboken — long seen as affordable alternatives to the five boroughs — will likely surpass Brooklyn in median asking rents, becoming the most expensive rental market in the NYC area outside of Manhattan. This year, the median asking rent in Jersey City and Hoboken was $3,160, while the median asking rent in Brooklyn was $3,424. But despite rent prices catching up with Brooklyn, those in search of new construction and hard-to-find amenities, like swimming pools and outdoor spaces with skyline views, may still be willing to cross the river into the Garden State.

5. New Yorkers will look for more reasons to stay at home

In 2024, both renters and buyers increasingly looked for amenities that meant they didn’t have to leave their apartment building. While Zillow points to pet-friendliness as a non-negotiable amenity nationally, in NYC, searches for apartments with outdoor space have jumped 116.6%, while searches for pools and gyms increased 61.8% and 11.2%, respectively. And though in-unit laundry and central air will likely remain the top must-have amenities for most New Yorkers, the number of people looking for a little something extra from their building is only growing.

Building amenities aren’t anything new, but are becoming more pivotal than ever for New Yorkers looking for a new place. When it comes to homes for sale or rent in the city, amenities have traditionally come at a premium. But with housing costs as high as they are, some New Yorkers don’t seem to mind spending even more for sought-after amenities that make staying home more comfortable and convenient. Plus, with hybrid work as the norm and poor air quality alerts plaguing NYC in recent years, there are even more reasons to stay at home with the utmost enjoyment.

StreetEasy is an assumed name of Zillow, Inc. which has a real estate brokerage license in all 50 states and D.C. See real estate licenses. StreetEasy Concierge team members are real estate licensees, however they are not your agents or providing real estate brokerage services on your behalf. StreetEasy does not intend to interfere with any agency agreement you may have with a real estate professional or solicit your business if you are already under contract to purchase or sell property.