Issue 113 - Where is the Real Estate Market Heading? The Big Questions

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Issue 113 – Where is the Real Estate Market Heading? The Big Questions

September 1, 2025

As we head into fall, I am often asked about where the real estate market is heading. This year, numerous competing issues are making it difficult for me to predict exactly what will unfold. The spotty movements of this past summer raise some very big questions that we need to have answered before knowing how everything will shake out.

In general, since the pandemic, people generally value their downtime much more. Summer is a time of respite for many, eager to take a break from the stress and intensity of work—and news of all the executive orders, proposed legislation, global politics, and world wars.

Post-pandemic demand for real estate was fueled by one of the biggest run-ups in history, resulting in the typical selling times for property no longer existing and being seasonally defined. However, inflation and mortgage rate hikes have forced people to wait on the sidelines.

I think many sellers are hoping that the president’s consideration of eliminating the capital gains tax may provide a significant opportunity for those who have been sitting on properties for decades to reap a solid return on their investment.

As such, it would allow them to cultivate true wealth creation by saving on considerably high capital gains, which in turn becomes the catalyst for people to be able to buy and sell with a higher profit. As with all political maneuvers, it remains to be seen how this will ultimately play out.

CNBC breaks it down this way:

Under current law, property sales are subject to capital gains taxes once profits exceed $250,000 for single filers or $500,000 for married couples filing jointly.
Since 1997, those thresholds have never been indexed for inflation, and more home sales are subject to capital gains as property values rise.

“Homeowners who have lived in a home as their primary residence for at least 24 months in the five years before the sale receive an exemption on the first $250,000 of gains for individuals and $500,000 for married couples filing jointly,” Newsweek reports.

The National Association of REALTORS’ research has found that nearly 29 million homeowners, roughly one-third of the market, already face potential capital gains taxes if they sell, “and that number is expected to climb sharply over the next decade.”

“These tax burdens create a ‘lock-in effect,’ especially for seniors, discouraging people from selling and keeping much-needed homes off the market,” Newsweek summarizes.

This proposal aside, at the end of the day, we are dealing with a much more fundamental issue in NYC: the mayoral race. Until it is decided who is elected, we won’t know what is going to happen here, especially whether the potential new legislature could lean towards socialism or capitalism. Ultimately, who is in power will determine how the city values real estate as an asset.

If the Democratic nominee, Zohran Mamdani, wins the election, potential real estate impacts involve rent stabilization and affordability, such as a rent freeze for rent-stabilized apartments. This could potentially disincentivize property owners from investing in maintenance and improvements, impacting the quality of NYC housing stock.

Mamdani also claims to want to invest in 200,000 publicly subsidized affordable housing units over a 10-year period. Some experts suggest this large-scale construction effort would be wrought with challenges.

More importantly, according to CNN, Mamdani’s real estate proposals are sending jitters through the NYC luxury real estate market. His proposed “millionaire tax” would prompt luxury home buyers and owners to consider moving out of state, which could significantly impact this market segment. Additionally, developers and investors would also face reduced incentives.

Fox Business concurs, citing a real estate expert who reports, “Consumers are taking a step back to wait and see how this plays out, because if a socialist is elected mayor of New York City, I don’t think it’s going to be good for the long-term health of our local economy and the real estate industry.”

While Andrew Cuomo and current mayor Eric Adams are still duking it out as NYC’s independent frontrunners, a win for Cuomo would ostensibly mean prioritizing and streamlining development processes, potentially leading to faster approvals and fewer regulatory roadblocks. He is also a proponent of zoning changes, which can lead to gentrification in some areas. As such, Politico suggests the well-heeled industry is rallying around his bid for mayor.

And lastly, if Adams secures a win, he would likely continue to keep housing supply a central focus, particularly with his “City of Yes” initiative, which aims to build up to 80,000 new homes in 15 years, and his “Manhattan Plan” to add 100,000 new homes in that borough over the next decade. Like Cuomo, his plans would include zoning changes, massive conversions, and encouraging development around transit hubs. Adams also supports allowing accessory dwelling units (ADUs) and eliminating parking mandates for new construction to facilitate the creation of housing. According to a NY1 segment this summer, “Mayor Eric Adams may be the new favorite candidate of the city’s business and real estate community.”

If Adams is successful in increasing housing supply and affordability, he could possibly slow the rapid real estate appreciation NYC has seen lately, especially in the luxury market, according to NY1. “Some wealthy New Yorkers have expressed concerns about potential tax increases or changes in policy under a different administration, potentially accelerating their plans to move outside of NYC.”

Lastly, the Republican candidate, Curtis Sliwa, would likely modify or repeal Adams’ “City of Yes” initiative and revert zoning to its previous state. This could mean a slowdown or halt to development projects already in motion and deter others from starting at all.

Sliwa does suggest ending unfair property tax increases on working-class owners and forcing large corporate landlords to pay more. He might also repeal the 2019 laws targeted at rent-stabilized landlords.

According to the New York Post, in essence, “a Sliwa victory could lead to a shift in real estate priorities, with a stronger emphasis on local zoning control, fair taxation for homeowners and renters, and the revitalization of existing housing stock, possibly impacting large-scale development and corporate real estate interests.”

As we watch all this play out, eager buyers and sellers are sitting on the sidelines, ready to cast their lines once the direction of potential changes and local initiatives becomes clear. Only time will tell, but one thing is already clear: The real estate market in NYC is always a key focal point, not just locally, but nationally and globally. All eyes will be on NYC this fall, keen on seeing what transpires and how real estate experts guide clients to maximize their value.

Issue 124 – “The Freeze Heard Across New York”

August 1, 2026

Even those of us who spend most of our days in the world of sales rather than rentals cannot ignore the conversation dominating New York real estate this summer: the city’s newly approved two-year rent freeze on nearly one million rent-stabilized apartments. The decision, fulfilling one of Mayor Zohran Mamdani’s signature campaign promises, has ignited passionate debate from tenants, landlords, developers, and economists alike.

As Time Magazine recently reported, “’Freeze the rent’ became the definitive rallying cry of Mamdani’s affordability-focused mayoral campaign for New York City, one of the most expensive cities in the world. Despite skepticism that he could actually pull it off, a board he controls made good on his pledge just six months into his term.”

In a 7-1 vote this June, the Rent Guidelines Board approved a rent freeze on one- and two-year leases on rent-stabilized apartments — which, according to the Time article, “make up about 27% of overall NYC housing stock.”

For tenants living in stabilized housing, the appeal is obvious. In a city where affordability persists as one of the defining challenges of our time, freezing rents offers immediate relief and greater certainty in an increasingly pricey environment.

Yet, as is so often the case in New York real estate, the story is more nuanced than the headlines suggest.

The New York Post presented the other side of the story, explaining that building owners are grappling with rising operating costs: insurance premiums, labor expenses, property taxes, and capital improvements have all increased substantially.

Critics argue that while the freeze protects tenants in the short term, rising expenses without corresponding rent increases may make it harder, particularly for smaller landlords, to maintain and improve aging buildings.

Rent freezes are not unprecedented. Previous freezes have provided short-term relief for tenants while renewing debates over maintenance, capital improvements, and investment in aging housing stock.

The broader issue is supply. Economists across the political spectrum generally agree that New York’s housing shortage cannot be solved through rent regulation alone. As Vox reported, demand continues to outpace inventory, making new housing production, zoning reform, and development incentives essential.

Although the freeze does not directly affect market-rate apartments, landlords with both stabilized and market-rate units may feel pressure to offset constrained revenue by increasing free-market rents where legally permissible. New York State’s 2024 Good Cause Eviction law, however, limits annual rent increases to the lesser of 10% or the local inflation index.

For buyers, particularly investors considering multifamily assets, the freeze introduces additional uncertainty around future income growth. Buildings with significant rent-stabilized components may trade at lower valuations because purchasers will have to underwrite higher operating costs against stagnant revenue.

For sellers, especially owners of mixed-use or rent-stabilized assets, the challenge becomes demonstrating long-term upside. We may see some owners delay sales, while others bring assets to market sooner out of concern that future regulation could become even more restrictive.

From a residential perspective, one unintended consequence may be increased demand for condominiums and co-ops. When rental policy becomes less predictable, many affluent New Yorkers begin to view ownership as a more stable, controllable alternative.

Foreign investors are unlikely to retreat from purchasing trophy condominiums or prime co-ops, which operate outside the stabilized system. In fact, increased regulation in the rental market could strengthen the appeal of luxury ownership as a store of wealth.

The greater consequence will be on institutional and international investors exploring multifamily acquisitions, where limits on revenue growth coupled with rising operating expenses may prompt some capital to pause, reprice risk, or seek opportunities elsewhere.

A major concern today is that the economics are more challenging than they were a decade ago. The Rent Guidelines Board’s own data shows that operating expenses continue to rise, with insurance costs increasing by more than 10% and overall operating costs rising by more than 5%. The effects will likely be felt most acutely in neighborhoods with large concentrations of rent-stabilized housing, while luxury condominium markets such as Tribeca, SoHo, and much of the West Village, where condominium and market-rate inventory dominate, will experience relatively little direct change.

New York remains one of the most desirable real estate markets in the world. The larger question is whether future housing policy can strike the right balance between protecting tenants and preserving the incentives necessary to maintain and improve the city’s housing stock. Recent reporting suggests that landlords and tenants alike are increasingly worried about the long-term sustainability of that balance.

Perhaps most interesting is what this moment reveals about New York itself. Housing has become far more than an economic issue—it has become a cultural and political one. The debate over rent stabilization reflects larger questions about who gets to stay in the city, who can afford to enter it, and what balance should exist between protecting existing residents and encouraging future investment.

As someone whose business focuses primarily on the sales market, I often remind clients that New York real estate rarely moves in straight lines. Policy shifts ripple through every corner of the market, shaping rental demand, buyer behavior, and investment strategy alike.

Yet what doesn’t change is New York’s capacity to reinvent itself. The conversation around housing will evolve, administrations will change, and policies will come and go. But the city’s enduring challenge — and opportunity — will always be finding ways to be both livable and aspirational.