I suggest searching on autotrader, ebay and carmax. I'm not advocating this as the place to buy a car, but it will give you a very good indication of market value. I'd be really surprised if find more than 1 or 2 above $16k.
At the $25k, the only W124 I'd consider at that price is a '95 E320 Cabriolet or an E500 (which seem to falling in price too).
While 37k miles is definately low mileage, the car is still 7 or 8 years old. Rubber seals, gaskets, bushings, etc., all fall victim to time. Also, in the Northeast, salt on the roads doesn't help matters either. I would not expect this to be a maintenance free vehicle.
Along the lines of Turbodiesel's comment about $16k for '96 300D; the prices are really falling fast on the '96-'02 E Classes. The new body style will cause those cars to lose around 10 to 15% market value between now and next April.
With a bit of patience, you might find a newer car with at lower price.