All good things must come to an end — and in the case of New York City rental housing, that means pandemic-era discounts for sweet apartments.
In the second quarter of 2022, the inventory for city rental homes rose 14% to 65,697 from the first quarter, according to a newly released market report from local listings portal StreetEasy. While that’s a sliver of good news, as the number of available homes for city renters has recently remained in the pits, it comes with yet another grim look at today’s brutal rental market, defined primarily by rapidly rising prices.
Of that sum, the report notes that tenants now priced out of their leases — specifically, renters who took advantage of record-low rents in 2020 and much of 2021 by moving to flashier apartments or more-prime neighborhoods — likely accounted for at least a third. Perhaps some of those units hit the market for other reasons, but StreetEasy pegs that portion to 34% of the available inventory, which equates to at least 22,337 units whose residents ultimately couldn’t afford them.
Today’s peaks, at one point, were deep lows. The COVID-19 pandemic led rents into a spiraling freefall, with consecutive market reports showing record declines. At the time, a number of New Yorkers left the Big Apple for out-of-town coronavirus pandemic hideaways, making landlords lure in those who remained behind with extras — such as free months on leases.
Beginning in the fall of 2021, however, those who snagged those deals received a rude awakening when renewing those leases came with massive monthly price hikes. Since then, prices have not only gone up — but have also continued to break records — as offices have slowly reopened and as rising interest rates have pushed would-be homeowners onto the rental market, making for even more of a crush. Among recent issues faced by house hunters: bidding wars for available rentals and awfully large crowds at open houses.
The StreetEasy report notes that landlords are making up for lost revenue. Something to help that aim: units listed in 2020 or 2021 and relisted in the second quarter of 2022 had a 20.4% increase in their asking rents, making it seem that landlords have “aggressively” upped the prices for dwellings leased during COVID to recoup their losses. Meanwhile, homes listed in 2018 and 2019, which then hit the market again last quarter, only had a 4.5% rent increase, the report adds.
The report doesn’t include The Bronx or Staten Island.
In Manhattan, it notes, the number of available rentals spiked 33% quarter-over-quarter to 31,412 — with about 44% of that total, or 13,821, likely freed up due to tenant price-outs. At the same time, the borough’s median asking rent rose to $4,100, the highest that StreetEasy has ever recorded and 55% of Manhattan’s median household income.
Renters priced out have set their eyes on more affordable areas. For instance, StreetEasy adds, rental inventory in Queens declined for the fifth straight quarter. Inventory slipped 9% to 8,984 quarter-over-quarter, while the median asking rent grew by 13% to $2,600 from the first quarter. That amount is 43% of Queens’ median household income.
Inventory in Brooklyn rose 5% to 23,130 quarter-over-quarter, while the median asking rent increased 12% to $3,200 over the same period of time. That’s 60% of the monthly median household income in the Borough of Kings — “a staggering financial burden for a household,” the report adds.
Is there any relief in sight?
“During this transition in the NYC market, we foresee rent increases continuing at least through the end of this summer,” the report adds.
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