Ever feel like the housing market is gaslighting you? Prices are high, demand is low, and somehow things keep chugging along.
You're not alone. In July 2025, the real estate landscape is serving up contradictions that have even the pros scratching their heads. Understanding the tension between these competing forces is exactly what gives savvy buyers and sellers the edge. Let's break it down.
The Manhattan Mirage: What's Actually Happening?
If you look at Manhattan right now, you'll notice something curious: both supply and demand are down, but supply is falling faster. In plain English? There aren't many new listings, and even fewer buyers are signing contracts.
That's not uncommon for the dog days of summer, but here's what's unexpected: the luxury sector (over $4 million) is booming. It's outperforming seasonal averages by nearly 38%, while the under-$4M market (especially homes needing financing) is trailing behind by double digits.
The market is lopsided. Cash-rich buyers are driving activity at the top, while everyone else is... waiting.
Credit Spreads and Why Wall Street Feels So Weird
Let's talk about credit spreads (think of them as a financial mood ring for global risk). The narrower they get, the more confident investors are. Right now? They're hugging their tightest levels in years.
You'd think that would signal wild optimism, right? Not quite.
Traders are skeptical. This rally in the stock market has been called "the most hated in history." There's no euphoric buying. It's more like a confused acceptance. Like the cartoon coyote running off the cliff but not falling yet... because he hasn't looked down.
It's a market moving on muscle memory and FOMO, not fundamentals.
https://www.creditspreadalert.com/
Renting Is Winning (For Now)
Nationally, renter households are growing faster than homeowner households. It's not hard to understand why.
With mortgage rates near 7%, the math doesn't make sense for a lot of would-be buyers. Add in record-high home prices, and renting feels safer, even if it's not cheaper.
We're seeing this play out in New York City too. The rental market has momentum. Meanwhile, would-be buyers are hitting pause, doing the mental gymnastics of "rent for now, buy later."
It's a push-pull dynamic, and right now, renting has the upper hand.
https://x.com/KobeissiLetter/status/1825276173938573649/photo/1
Is This a Bubble or Just a New Normal?
National home prices are still about 16% overvalued based on income levels and mortgage rates. That sounds ominous, but the collapse some folks are predicting? Not happening, at least not yet.
Why? Because construction employment hasn't rolled over. Builders aren't walking away from projects. Permits may be down, but payrolls are holding. It's a slow drift, not a nosedive.
If anything, the market is inching toward a reset, not a crash. Still, the mismatch between affordability and pricing is real, especially for entry-level buyers.
NAR Realtor: More Homes Hit the Market, But Buyers Aren’t Rushing In—Yet
Luxury Buys, Foreign Money, and the USD Factor
Here's something that isn't making enough headlines: the US dollar is down about 10.5% year to date. That's making New York real estate look like a Black Friday sale to international buyers.
If you're holding euros, pounds, or yen? That $4M condo in Manhattan just became 10-15% cheaper before negotiations. Combine that with stable prices per square foot in prime buildings, and you've got a strong case for foreign investment.
So yes, now might be the time to re-engage your overseas contacts, especially if they've been lurking on the sidelines since 2022.
https://x.com/biancoresearch/status/1948839569735999792
Final Thoughts: Real Estate Is Now Hyper-Local
In a world where national trends are zigzagging and mortgage rates are playing mind games, one truth holds steady: real estate is hyper-local. Like, building-by-building local.
The headlines might say "market slowdown," but your specific co-op in Chelsea or your postwar condo in Brooklyn might be telling a different story.
So whether you're advising clients, buying your first home, or thinking of selling, get granular. Hyperlocal data is your best friend in a market like this.
Want the Unfiltered Truth on NYC Real Estate?
If you're done guessing and want grounded, data-backed advice tailored to your specific building or block, let's connect. Whether you're buying, selling, or still undecided, I'm here to cut through the noise and help you make moves that make sense.