The Quiet Shift No One’s Talking About (Yet)

 Corcoran - Quarterly Market Update 2/5/25 - Manhattan/Brooklyn 

Manhattan Inventory Down 40%—What Does That Mean for Buyers and Sellers? 

Since its peak in Q3 2020, Manhattan’s housing inventory has plummeted by 40%, a massive shift that’s reshaping the real estate market. This isn’t just a statistic—it’s a sign of the tightening supply that’s leaving buyers frustrated and sellers wondering if now is the time to make a move. If you’re buying, you may be competing for the best options. If you’re selling, demand could be working in your favor. Here’s what’s happening now and what it means for you. 

Where Prices Are Now 

Despite shrinking inventory, prices have continued to soften. The median price per square foot—a more reliable metric that smooths out extreme highs and lows—dropped 5% year over year. Since the post-COVID market peak in late 2021 and early 2022, prices have declined by about 10%. This represents real value opportunities, even if they’re not always apparent in broader market statistics. 

Market Activity: Contract Signings & Closings 

The early 2024 numbers show contract signings in Manhattan are up slightly—just 2% year over year—while closings are expected to show a bigger increase due to a strong Q4. The biggest activity shifts have been at the lower end (under $1M, up 8%) and the ultra-high end ($10M+, nearly doubling). However, these numbers are based on a small sample size and don’t necessarily indicate a full-blown luxury boom. Instead, they suggest a return of discretionary buyers who had previously held back. 

Brooklyn’s Market Story 

Brooklyn is showing a different trend. While Manhattan prices have softened, Brooklyn’s have continued to climb. Inventory has increased for three consecutive quarters (+13% in Q4), suggesting that some sellers are feeling more confident about listing. However, even with this increase, Brooklyn inventory remains 25% below historical levels, keeping supply tight. Unlike Manhattan, where prices have declined, Brooklyn prices have been on an upward trajectory since 2018, particularly in resale condos and new development. This has further narrowed the pricing gap with Manhattan, making Brooklyn a strong alternative for buyers who are priced out of certain Manhattan neighborhoods. 

Days on Market & Negotiability 

While days on market has declined slightly (down 1% YoY, averaging 110-120 days), it remains elevated due to some lingering long-market listings. Negotiability has also tightened overall, particularly in new developments, where developers have already adjusted pricing. The days of massive discounts are fading—concessions are still happening, but they now account for about a 50/50 split between price cuts and incentives like covering transfer taxes, throwing in storage, or offering parking spaces. 

Rental Market & Future Inventory 

A large wave of rental inventory is expected in 2024-2025, fueled by the 421a tax abatement deadline. Office-to-residential conversions in Midtown and FiDi will further increase rental supply in the coming years, which should help level off rental price growth. We’re already seeing more concessions from landlords and a flattening of median rents, signaling a shift in the rental market after years of tight supply. 

This Broker’s Opinion 

For Sellers: 

If you’ve been waiting for the right moment to list, this may be it. Inventory remains low, and while prices have come down slightly, they appear to be leveling off. The lack of major new developments coming to market in the next few years could tighten supply even further, supporting prices in the long run. Sellers who price strategically and position their homes well can still attract serious buyers—especially in high-demand segments. 

For Buyers: 

For those on the fence, there’s a real window of opportunity right now. Manhattan prices are about 10% lower than their post-COVID peak, creating genuine value in the market. The slowdown in new development will likely reduce future inventory, which could stabilize pricing and eventually lead to appreciation. For Brooklyn buyers, expect competition to remain strong, particularly for condos and new development. If you find a property that fits your needs and is priced well, this could be the time to move

The Bottom Line: 

The market is stabilizing, and while 2025 may not be a boom year, it’s shaping up to be a solid, average year—which, after the rollercoaster of the last few years, isn’t a bad thing. Buyers who act now can lock in strong value, while sellers who list strategically can still achieve competitive pricing. The next move? That’s up to you.