Brooklyn by the Quarter
Q1 2025 brought cautious optimism as Brooklyn's real estate market showed signs of stabilization amid changing conditions.
Casey Soloff is a Licensed Real Estate Salesperson with Compass, a 20 year resident of Brooklyn, and founder of the monthly Dadurdays meetup at Wild East Brewing Co. in Gowanus.
If "uncertainty" defined 2024 and "hope" ushered us into the new year, then the word that best captures the first quarter of 2025 might be "recalibration." After the volatility of last year—with its dramatic election, three Fed rate cuts, and unpredictable mortgage rate swings—Q1 has delivered something the market hasn't seen in quite some time: a measure of stability.
While we haven't witnessed the dramatic rate drops many had anticipated following last year's Fed actions, we have seen the market begin to find its footing. Buyers and sellers alike seem to be adjusting to a new landscape, setting the stage for what could be a more predictable (dare I say normal?) spring and summer.
Mortgage Rates: Finding a New Baseline
Remember when we thought rates would steadily decline after the Fed's initial cut last September? Then watched them bounce right back up by the end of 2024? And it was really fun for everyone?
Well, it’s some relief to see that the first quarter of 2025 showed off a more leveled pattern, with mortgage rates finally hinting at signs of stability (albeit at levels still historically high compared to the pandemic era).
The roller coaster we experienced in 2024 appears to be slowing its pace. While we haven't seen the dramatic drops some economists predicted under the new administration (though there’s certainly been no shortage of drama), rates have at least stopped their erratic climb, hovering in a narrower band than at any point in the previous 18 months.
This relative stability has given buyers and sellers alike a chance to recalibrate their expectations. Transactions are occurring with less drama and more pragmatism, as the market adapts to what appears to be our medium-term reality.
Market Activity: Building on Q4's Promise
The promising signs we saw in the final quarter of 2024 have largely continued into 2025. Contract activity in Brooklyn has remained relatively strong, consistently performing near seasonal averages—a welcome change from the underperformance we witnessed through much of 2023 and early 2024.
The "listing success" metric—properties going into contract within 30 days—has continued to outpace comparable periods from the previous two years. Well-priced, attractive properties are moving quickly, particularly in sought-after neighborhoods like Park Slope, Brooklyn Heights, and Cobble Hill.
Inventory levels, while still historically constrained, have shown modest improvement as more sellers come to terms with current market conditions. The anticipated flood of post-election listings hasn't materialized, but we are seeing a healthy trickle of new properties hitting the market as spring approaches.
Brooklyn's Climate Index: Cautiously Warming
Building on the momentum from Q4 2024, Brooklyn's climate index (the ratio of signed deals to listings removed from the market) continued to show strength through the first three months of 2025. This metric, which helps gauge overall market health, suggests a gradually improving environment for both buyers and sellers.
What's particularly encouraging is the consistency we're seeing. Rather than the dramatic swings that characterized much of 2024, Q1 has delivered more predictable patterns—the kind that allow market participants to make decisions with greater confidence.
The New Buyer Representation Model Takes Hold
A significant milestone occurred on January 13th of this year, when all REBNY member brokerages began requiring a buyer representation agreement to be in place between buyer and agent. What started as a recommendation has now become mandatory across the industry, cementing the transformation in how real estate professionals operate in New York City.
Despite this formal change, most sellers continue to offer compensation to buyer's agents, recognizing the value this brings to achieving optimal sales outcomes. Meanwhile, buyers have largely accepted the more transparent approach to agent compensation, even if it occasionally means negotiating these costs into the purchase price.
Looking Forward: Spring and Summer 2025
As we move into the traditionally active seasons, several factors suggest continued improvement in Brooklyn's market:
The relative stability in rates has allowed buyers to make decisions with greater confidence
The "pent-up demand" that built throughout 2024's uncertainty appears to be gradually releasing
Inventory improvements, while modest, are providing more options for frustrated buyers
Brooklyn's fundamental appeal remains undiminished, with strong demand across neighborhoods
Will 2025 be the year the market fully returns to "normal"? A definitive answer still eludes us, and recent economic events continue to confound. But the first quarter has certainly provided more reasons for optimism than we've seen in quite some time.
Your Brooklyn Real Estate Partner
Whether you're thinking about buying in this evolving market, considering selling while inventory remains relatively constrained, or simply curious about how these trends might affect your property's value, I'm here to help navigate these changing waters.
Feel free to reach out by phone or email with specific questions, follow me on Instagram for regular listing features and market insights, or join me at our monthly Dadurdays meetup at Wild East Brewing Co. in Gowanus for conversation over craft beer.
I look forward to sharing continued market developments with you, with my Q2 update coming in July.