President Donald Trump sought to project confidence in his address to the nation Wednesday, saying the conflict with Iran is “nearing completion” with a timeline of weeks, not months. Markets didn’t reflect the same confidence. Oil prices jumped since, and the lack of a clear exit strategy, paired with escalating rhetoric and even renewed criticism of NATO, has kept volatility front and center, with real estate quickly absorbing the fallout through higher borrowing costs.
Mortgage rates, which had briefly dipped below 6 percent in late February, have moved decisively higher, climbing to about 6.46 percent as of Thursday. The increase marks a fifth straight week of gains, and it quickly undercut the fragile optimism that had been building ahead of the spring selling season, just as it appeared to be thawing.
Meanwhile, U.S. oil prices have surged from roughly $65 to over $100 since the start of the conflict, impacting gas prices and the broader cost of goods that rely on global shipping. For households, this adds another layer of pressure on tight budgets. Affordability was already strained by high home prices, insurance and property taxes, as well as rising energy costs, which narrow the margin further, making it harder to absorb elevated borrowing costs or save for a down payment.
There is some underlying stability. Price growth has been moderating, with home values rising less than 1 percent annually and, in real terms, slipping when adjusted for inflation. Inventory is finally increasing, up more than 14 percent year over year, as sellers begin to accept that rates are unlikely to fall meaningfully in the near term. That shift had pointed toward a more balanced market, but the risk now is that higher borrowing costs stall that transition before it fully takes hold.
Developers are dealing with high tariffs on steel and aluminum and the war adds more compounding factors. On the ground, the bigger concern is the layering of costs across the system. Construction costs continue to climb, even if at a slower pace, with labor still doing most of the heavy lifting. The industry remains exposed to supply chain friction and workforce constraints, both of which could tighten further depending on how long the conflict drags on.
Globally, the stress is more immediate. In Dubai and Abu Dhabi, a market that had been red-hot is starting to cool off amid heightened regional tensions. Property-linked bonds are slipping into distress, refinancing options are tightening and foreign investors could begin pulling back as risk in the region rises. That capital hesitation is the kind of early signal that can take longer to show up in transaction data but tends to matter for development pipelines. The broader conflict is rooted in deeper economic strain inside Iran, where high inflation has fueled widespread unrest and contributed to the volatility. It serves as a reminder that real estate often becomes a landing spot for global capital in times of instability, even as other parts of the financial system react more quickly.
Back in the U.S., the tone is more measured. Brokers in New York are flagging geopolitical risk, particularly if oil keeps climbing, but many still see resilience, especially at the top end of the market. But a recent report by appraiser Jonathan Miller found inventory in New York City’s luxury sector sharply declining late in the first quarter, around the time the U.S. entered the war.
For the most part, the Iran conflict is amplifying existing problems. Rates are pushing higher again, costs are sticky and dealmaking is cautious. If the conflict stays contained and oil prices retreat, the market likely continues its slow normalization. If not, the spring rebound many were counting on may remain just out of reach.
There was plenty of other real estate news this week. Another multifamily investor was accused of fraud, the legal battle over Sergio Pino’s fortune spilled over into an apartment deal and we look at how Shanna Khan became the face of Chicago’s Fulton Market.
NJ Attorney’s office charges Mordechai Weiss with fraud
A Monsey-based multifamily investor is now facing federal fraud charges as authorities intensify their crackdown on alleged mortgage schemes. New Jersey prosecutors charged Mordechai Weiss with conspiracy to commit wire fraud, with a plea hearing set for April 9 that signals a potential deal with the government.
Charles Cohen facing another Midtown foreclosure suit
Charles Cohen is facing yet another foreclosure fight as distress continues to mount across his Midtown portfolio. U.S. Bank filed to foreclose on 222 East 59th Street, alleging a Cohen Brothers affiliate defaulted on a $7.5 million loan after failing to make payments since September. The filing adds to a string of setbacks, including the recent loss of the firm’s headquarters at 750 Lexington Avenue and a $187 million personal judgment from Fortress Credit.
How Shanna Khan became queen of Fulton Market
Shanna Khan has emerged as a leading force in Chicago’s Fulton Market, pushing forward a $300 million-plus office project at a time when many developers pulled back. Her 409,000-square-foot building nearly collapsed in late 2022 after key tenants walked away, but she secured new capital, restarted the deal and broke ground in 2023. The project is now one of the only major high-end office developments set to deliver in Chicago this year.
Sergio Pino’s mistress sues to block his daughter from getting cut of $72M multifamily sale
A legal battle over the late Sergio Pino’s estate is now spilling into a $71.5 million multifamily sale, with competing claims over who gets paid. Nancy Pastor, Pino’s longtime partner, filed suit to block his daughter Jacqueline Pino Wechsler from receiving a share of proceeds tied to the 230-unit 850 Living property sold last year.
What was Epstein’s property play?
Real estate investors are always thinking about leverage. The right amount can juice returns, while too much can wipe out investors’ equity. The Epstein story — of his rise to the top of New York City’s proverbial food chain while orchestrating a sprawling sex trafficking operation — has always been a beguiling one. His real estate dealings offer a window into how he managed both people and money, the two tools he deftly wielded in his ascent.
Gary Barnett taps Andrew Chung as Extell co-CEO
Gary Barnett is shaking up Extell Development’s leadership as the firm pivots toward a heavier mix of commercial projects. Barnett is calling Chung to serve as president and co-CEO, bringing on the Innovo Property Group founder and former Carlyle executive to help steer strategy, development and capital relationships.
Michael Shvo comes out on top with Transamerica Pyramid sale; his partners aren’t so lucky
The sale of San Francisco’s Transamerica Pyramid closed at a steep loss for investors, but it delivered a sizable payday for Michael Shvo. Cyprus-based Yoda PLC acquired the tower for $691.6 million, far below the nearly $1 billion invested by the prior ownership group led by German pension fund Bayerische Versorgungskammer and its partners. Despite the loss, Shvo and his affiliated companies collected $34 million tied to commissions, termination fees and the buyout of his rights on the property.
How Jeffrey Soffer turned the Fontainebleau name into a real estate empire
Jeffrey Soffer, who split from the family empire in 2019 with several key properties, is building his own dynasty bookended by his iconic South Florida waterfront resort, Fontainebleau Miami Beach, and its sister property in the Nevada desert, Fontainebleau Las Vegas. In his latest move to keep Fontainebleau Miami Beach relevant in a hyper-competitive hospitality market, Soffer’s push for a 99-foot waterslide tower, which locals vigorously oppose, gets at the core of how the son wears his mantle of succession.
Oceanwide Plaza buyer faces resistance, confirmation hearing pushed
Things are looking less certain for downtown Los Angeles’ infamous, incomplete graffiti-covered skyscrapers, a month after its largest creditors became a white knight buyer. The bankruptcy court on Monday approved the City of Los Angeles’ request for a continuance of the confirmation hearing that could seal the stalled-Oceanwide Plaza’s fate.
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Mortgage rates climb again as Middle East conflict rattles markets
Manhattan’s luxury listings fall to nearly 20-year low
U.S. housing pricing growth moderates ahead of spring buying frenzy