After three decades in real estate, I can confidently say that 2024 was one for the books—but not in a good way. We've seen tough years before, but unlike 2001 or 2008, which hit outsiders the hardest, 2024 delivered a gut punch straight to the heart of the industry. From empty offices to sky-high rents, the hits just kept coming. Let's unpack a few of the lowlights.
Empty Offices, Empty Pockets
Nationally, commercial real estate was the poster child for struggle in 2024. The culprits? Higher interest rates, oversupply, and skyrocketing costs. Office spaces languished as hybrid work became the norm, leaving demand in the dust. But necessity breeds creativity. We saw shopping malls morph into pickleball courts, apartments, and Amazon distribution centers. Some office buildings even began transitioning into residential spaces. And here in New York, there's the reinvention of the Flatiron Building—set to become one of the grandest residential gems in the world. A silver lining? Maybe.
Inventory Crisis
If you felt like there were no homes to buy, you weren't imagining it. Total home sales in 2024 hit near-historic lows, plunging back to levels not seen since the mid-1990s. Home prices stayed high, mortgage rates fluctuated, and buyers were stuck on the sidelines. The real kicker? America's housing shortage—somewhere between 4 and 7 million homes—shows no sign of easing. The affordability crisis will only deepen without a serious ramp-up in new builds,
The Rent is Too Damn High
Fewer home sales meant more people turned to rentals—or, for many in their 20s and 30s, their childhood bedrooms. Neither option was ideal. Renting came with sky-high prices (up 30% since 2017) and limited availability while moving back home often brought its own social and psychological challenges. And just when you thought things couldn't get worse, the U.S. Department of Justice accused RealPage for allegedly using algorithms to drive rents above market rates. Also, New Yorkers will undoubtedly see higher rents this year when, in May, landlords will be required to pay the brokerage commission. A win for tenants in the short term as they will no longer have to pay the brokerage fee up front, but a loss in the long run as that fee will just be added into the monthly rent.
Climate Costs
Climate change came knocking—and it brought the bill. Natural disasters intensified, driving up home insurance premiums in high-risk areas. For many, the cost of staying put rivaled the expense of moving. This year's Atlantic hurricane season was one of the deadliest and costliest on record, with 18 named storms and 11 hurricanes. Hurricane Helene alone claimed over 150 lives. It's no wonder homeownership feels out of reach—or even unsafe—for so many.
Commission Chaos
The National Association of Realtors (NAR) faced a game-changing legal settlement that overhauled how commissions are handled. The intent? Transparency and lower rates. The reality? Class-action attorneys walked away with nearly $80 million in fees, leaving brokerages and consumers to navigate the fallout.
Agents in the Spotlight—for All the Wrong Reasons
If the media wasn't busy airing scandals, it was pumping out reality TV that portrayed agents as arrogant, overpaid, and out of touch. Worse yet, the year saw high-profile arrests and allegations of misconduct, from fraud to sex trafficking. With over 1.5 million agents vying for fewer than a million monthly listings, the competition was fierce—and not always flattering.
Looking Ahead: Turning the Tide in 2025
For every horror story in 2024, there were twice as many stories of resilience, innovation, and heart. The problem? They never make the headlines. But that's where our opportunity lies.
Here's how we can rewrite the narrative in 2025:
- Raise the Bar: New York needs to finally make licensing meaningful. A two-week crash course doesn't cut it. Imagine the impact of requiring a year of real-world education before entering the field.
- Build What's Needed: The forgotten middle class needs housing. Let's collaborate to create solutions that truly serve them.
- Tell the Right Stories: Industry leaders and innovators should take the reins and share stories that reflect the true spirit of real estate—not the scandals.
It's time to lead with purpose and vision. The road ahead won't be easy, but it's ours to shape.
Let's do this!
Shaun