Every year somebody tries to sell you a “New York is over” narrative. 2025 did the opposite. It reminded everyone how fast this city snaps back the second the conditions become even slightly more workable.
If you want the real story of 2025, it is not one headline. It is five structural shifts that changed behavior, changed costs, and changed where leverage sits. Here they are, what happened, and what it means for New York.
1. THE SALES MARKET GOT HOTTER, EVEN WITHOUT PERFECT RATES
What happened: Manhattan prices and activity strengthened through 2025. The Elliman market reports showed the median sales price rising and sales outpacing listing inventory, which is exactly the recipe for price pressure. Douglas Elliman+1 StreetEasy also pointed to a stronger contract pace and homes moving faster as the year progressed. StreetEasy
How it affects New York: In a city where supply is always tight, it does not take a miracle for momentum to come back. It takes clarity. 2025 gave buyers enough stability to stop waiting for “the perfect moment,” and it gave sellers enough confidence to test the market again. The practical impact is simple: the good apartments that show well, price correctly, and have clean board or condo financials are getting absorbed. The ones that are overpriced or compromised are still sitting, and that gap is widening.
If you are a seller, you are not selling “a home.” You are selling certainty. In 2025, certainty started to win again.
2. CONGESTION PRICING BECAME REAL, AND IT STARTED REWIRING VALUE MAPS
What happened: Congestion pricing launched on January 5, 2025. The program introduced a daily toll for vehicles entering the congestion relief zone, with peak pricing that has been widely reported at a lower level than the original plan. NRDC+1 By mid 2025, early reporting showed material changes on the streets and in traffic patterns. The Guardian
How it affects New York: Transportation always shows up in real estate. Always. If it costs more, or takes longer, or feels more annoying to commute a certain way, people change habits. And when habits change, neighborhoods reprice.
The immediate impact is psychological and practical. Drivers think twice. Some households shift toward transit heavy lifestyles. Some buyers who previously insisted on a car start prioritizing walkability and proximity to subway lines even more. Over time, anything that improves predictability in getting around Manhattan and strengthens transit investment supports the desirability of the core, particularly for buyers who already live most of their lives below 60th Street.
3. THE FARE ACT CHANGED RENTAL ECONOMICS OVERNIGHT
What happened: The Fairness in Apartment Rental Expenses Act took effect June 11, 2025. It prohibits brokers who represent landlords from charging broker fees to tenants, and it also requires clearer disclosure of other fees in listings and agreements. NYC Government+1 StreetEasy framed it plainly: renters generally should not be paying a fee unless they hired the broker. StreetEasy
How it affects New York: This was not a small tweak. It changed who writes the check. That flows directly into how landlords price apartments, how they negotiate concessions, and how competitive buildings position themselves.
In the short term, some landlords try to offset the cost through rent, through fewer concessions, or through being pickier on lease terms. In the medium term, it pushes the rental market toward more transparent economics, where buildings compete more on product and pricing, less on confusing friction costs at move in. It also changes the tenant experience. Fewer surprise bills means more renters can actually move, which increases churn, which increases leasing velocity for correctly priced units.
4. LOCAL LAW 97 HIT ITS FIRST REAL REPORTING MOMENT, AND CO OPS FELT IT THE HARDEST
What happened: 2025 was a major compliance year for Local Law 97 reporting. The city opened up the portal and formalized filing processes and guidance, including notices tied to 2025 reporting. NYC Government+1 Owners could request extensions that pushed filing deadlines later into 2025. NYC Accelerator+1
How it affects New York: This is where a lot of buyers and sellers get caught off guard. Local Law 97 is not just “a policy.” It is building operations, capital projects, financing, and monthly costs.
Co ops and older condos are especially exposed because the retrofit math can be real, and boards are forced to choose between upgrades, penalties, or some mix of both. That shows up as higher maintenance, higher common charges, more frequent assessments, and more scrutiny from sophisticated buyers. In 2025, buyers started asking sharper questions, not just about financial statements, but about the building’s emissions strategy and capital plan. That is a permanent shift in due diligence.
5. ZONING AND TAX INCENTIVES STARTED PUSHING SUPPLY IN THE RIGHT DIRECTION, EVEN IF IT IS NOT ENOUGH
What happened: The city advanced housing production through zoning and conversion initiatives. City of Yes for Housing Opportunity expanded non residential conversions citywide and moved the eligibility date to 1991, broadening which buildings can convert. NYC Government+1 Midtown South Mixed Use was adopted in August 2025, with the city projecting about 9,500 new homes, including permanently affordable units. NYC Government+1 On the tax incentive side, the 485 x program, also known as the ANNY program, provides a property tax exemption framework for new multifamily construction and eligible conversions. NYC Government
How it affects New York: New York’s number one real estate problem is not demand. It is supply. These initiatives do not “solve” it, but they change the direction of travel.
Conversions matter because they can produce housing where the city already has infrastructure, transit, and jobs. Incentives matter because construction does not happen in New York without a serious financial structure behind it. 2025 was the year the policy machine started moving more aggressively in that direction. If even a portion of these tools convert into actual delivered units, it takes pressure off rents and gives buyers more options. That is good for the city long term, even if it means sellers have to compete harder at the margin.
ENDING WHERE IT SHOULD END, WHY 2026 LOOKS POSITIVE
I am constructive on 2026 for one core reason: activity is coming back, and New York does not need perfection to rise. It needs a functioning market.
StreetEasy’s 2026 predictions call for homes selling faster and the city seeing the highest sales volume since 2022, building on the stronger pace we saw in 2025. StreetEasy+1 Zillow’s national outlook similarly projects a modest increase in existing home sales in 2026 and expects home values to rise, not fall off a cliff. Zillow+1
Translate that into New York terms and it looks like this: more deals, tighter timelines on the best inventory, and price growth that shows up first in the apartments that are scarce by nature, meaning renovated, well laid out, good light, strong building, and no drama. The city always rewards quality when buyers re engage. 2026 looks like that kind of year.
