Spring 2025 Update
ariffs got you down?
Good afternoon,
These are certainly challenging and confusing times. The current administration is definitely keeping things "exciting," but how is this affecting the NYC real estate market? Typically, uncertainty isn't beneficial for any market, unless you're a trader. Many clients are unsure whether to proceed with their plans to buy a home in NYC. Conversely, others are more committed than ever to finding a home, viewing it as a source of stability, although our friend "Nada" on SE might disagree.
The current NYC market truly presents a "Tale of Two Cities." Data indicates some improvement in sales, perhaps even a degree of normalcy. Some brokers report bidding wars on certain properties in Manhattan, which is certainly the case in prime Brownstone Brooklyn for most houses and select apartments. However, much of Manhattan remains in a deep funk, with many homes sitting on the market for over 100 days.
Mr. Market will do as he pleases, so whether you're buying or selling, you have to work with the current conditions. If you're a buyer, stay the course, be patient, and carefully analyze each property. If you're a seller, accurate pricing and a solid presentation of your home are more crucial than ever. We recently put three previously challenging homes into contract through patient adjustments and negotiation, based on current market conditions and feedback from buyers and their agents.
Please feel free to schedule a call with me to discuss your current or future plans or to just get the scoop on what's happening from a boots on the ground perspective!
Best regards,
Keith
Correct data has never been more important! I don't think anyone is delivering this important, relevant market information more than Urbandigs. Have a look at the video that I posted below!
A More Detailed Look into What is Currently Happening with US Markets
The U.S. economy in late April 2025 presents a complex picture, marked by both resilience and emerging challenges. Here's a summary based on the latest available information:
Key Economic Indicators:
GDP Growth: The Bureau of Economic Analysis (BEA) reported that real GDP increased at an annual rate of 2.4 percent in the fourth quarter of 2024. This followed a 3.1 percent increase in the third quarter. For the full year of 2024, the U.S. economy grew by 2.8 percent. However, more recent forecasts and nowcasts suggest a potential slowdown in the first quarter of 2025. The Atlanta Fed's GDPNow model estimate for real GDP growth in Q1 2025 is -2.2 percent as of April 17, 2025, indicating a possible contraction. Other estimates vary, but a general trend of decelerating growth is emerging.
Inflation: Inflationary pressures remain a concern. The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose at an annual rate of 2.4 percent in the fourth quarter of 2024. Excluding food and energy, the core PCE price index increased by 2.6 percent. Some forecasts anticipate inflation to remain near 3.0% in 2025, partly due to the impact of tariffs.
Leading Economic Indicators: The Conference Board Leading Economic Index (LEI) for the U.S. declined by 0.7 percent in March 2025, reflecting concerns about consumer expectations, stock prices, and new orders in manufacturing. While not signaling an imminent recession, this suggests a weakening economic outlook.
Emerging Trends and Concerns:
Impact of Tariffs and Trade Uncertainty: The imposition of tariffs by the U.S. and retaliatory measures from other nations are creating significant uncertainty and are expected to weigh on economic growth, potentially leading to higher inflation and supply chain disruptions. The International Monetary Fund (IMF) has significantly downgraded its growth forecast for the U.S. for 2025 to just 1.8 percent, citing the impact of President Trump's trade policies.
Fiscal Policy: The U.S. continues to face a substantial fiscal deficit, which has led to a rise in public debt. The OECD suggests enacting a multi-year fiscal adjustment to put public finances on a more sustainable path.
Monetary Policy: The Federal Reserve has kept the federal funds rate unchanged in the range of 4.25%-4.50%. Amidst the rising economic uncertainty, the Fed appears to be in a "wait-and-see" mode, with expectations of potential rate cuts later in 2025.
Slowing Growth: Multiple forecasts indicate a deceleration of U.S. economic growth in 2025 compared to the solid pace seen in 2024. Factors contributing to this slowdown include weaker household income growth, fading fiscal stimulus, rising tariffs, and higher interest rates.
Overall Outlook:
The U.S. economy, while demonstrating resilience through the end of 2024, is facing increasing headwinds in 2025. The impact of trade policies and the resulting uncertainty are key concerns that are projected to dampen economic activity. While a recession is not the consensus forecast, the risks of a significant slowdown have increased. Monitoring key economic indicators, policy decisions, and global economic developments will be crucial in the coming months.