Looking Ahead to 2026: Market Insights, Predictions & Possibilities

Before we dive into 2026 predictions, let’s set the stage. The Manhattan and Brooklyn markets hit what many consider a post-COVID floor in 2023, after the steep correction triggered by the summer 2022 interest rate spike. In 2024, the market began to rebound. Then came 2025—showing modest growth on top of that recovery. So here we are in 2026: a year that begins with both uncertainty and opportunity, and the potential for measured revival. Buyers remain cautious, especially around pricing, and sellers—particularly in Manhattan—continue to show some resistance, though perhaps with a slightly more congenial tone. If the market takes the right cues, 2026 could be a touch better than 2025.

As John Walkup of UrbanDigs recently noted in Forbes, this year may have less to do with rate cuts, Wall Street, or rental trends, and more to do with how individual buyers and sellers view the market. Let’s take a closer look at three major themes that could shape the year ahead.

Interest Rates

It’s widely assumed that falling interest rates will spark a buyer frenzy. But that’s only true if the rate cuts come alongside broader economic strength. If lower rates are paired with economic weakness, recession fears, or macro uncertainty, buyers may still sit on the sidelines. Also, according to Realtor.com, over 70% of U.S. mortgages are locked in below 5%, and 52% are below 4%, making many homeowners unwilling to sell and give up their low-rate financing. So even if rates decline, we may still see limited inventory—a “frozen seller effect”—where few are willing to trade up or down. In other words, while rate cuts might seem like a golden ticket, they’ll only move the needle if combined with easing inflation, stable employment, and renewed buyer confidence. It will take more than just monetary policy to meaningfully shift the needle in NYC.

Pricing & Seasonal Timing

In today’s market, correct pricing matters more than ever. If a property is priced right—and hits the market at the right time—it has a strong chance of selling. With buyer fatigue and budget sensitivity still lingering, sellers will need to adjust expectations and price and list their home at the right time. Expect most deals to happen in two distinct windows: spring (March through early June) and fall (late September through early November). Outside of those seasons, listings may sit idle unless priced aggressively. The market is active—but only at the right price point. Manhattan and Brooklyn haven’t seen sustained momentum in several years, and even though rents remain at all-time highs, many buyers are still waiting on the sidelines due to affordability concerns.

The Return of the Unrenovated Co-op

Affordability challenges could bring unrenovated co-ops back into favor. For buyers who are priced out of newer, turnkey homes, older properties—often with 1980s kitchens and original details—could offer a path to ownership at a lower entry price. While these homes may require renovations, they also offer flexibility: buyers can update over time, room by room, as budgets allow. After years of a market dominated by turnkey demand, 2026 might mark a shift toward value-driven purchases—especially among buyers who are more patient, budget-conscious, and renovation-inclined.

In Conclusion

These are three trends to watch as we enter the 2026 market. Of course, if you have any questions about Manhattan or Brooklyn real estate, I’m always happy to chat. After 24 years of successful sales in NYC, with 89 closed transactions last year and closing 2205 with another 25 properties currently under contract, The Hoffman Team is ready to help you navigate the market—no matter what 2026 brings.

Wishing you a great month ahead. Let’s see what this next chapter holds.

Real Estate in the News

Real Estate Giant Compass Closes $1.6 Billion Merger to Become Worlds Largest Broker

"We are pleased with the strong support from our and Anywhere's stockholders in approving this transaction," said Compass founder and CEO Robert Reffkin. "Today's outcome reflects confidence in our shared vision to empower real estate professionals with everything they need to grow their business and better serve their clients."

Courtesy of Realtor.com