NEW YORK, Oct. 23, 2020 /PRNewswire/ -- A record high
share of rent cuts contributed to a Manhattan median asking rent of $2,990 in the third quarter of 2020 — the first
time this figure has been below $3,000 in nine years.
The share of Manhattan rental
listings on StreetEasy that was discounted during the third quarter
rose 22.7 percentage points year-over-year to a record high of
44.7%, as landlords made attempts to attract tenants amid a rental
market that has struggled considerably since the coronavirus
pandemic hit in the city.
Meanwhile, rental inventory in Manhattan increased by 69.8%, with 72,267
available listings — nearly 30,000 more than last year. Discounts
didn't only become more common, they also grew substantially
larger. The median rental discount in Manhattan hit 9.1% off the asking rent — 5.2
percentage points higher than last year. In dollar amounts, the
median discount being offered by Manhattan landlords was $272 during the third quarter — $139 more than what was being offered in
2019.
The Manhattan rentals market
had the most drastic spike in discounts, but the outer boroughs
were not far behind. The share of rentals discounted reached a
record high of 30.7% in Brooklyn,
and a near-high of 26.6% in Queens.
The massive spike in discounts was one factor behind the
StreetEasy Rent Indexi falling year-over-year in all
three boroughs analyzed. This quarter marks the first time in
StreetEasy records, dating to 2010, that all three boroughs saw
rents fall.
- The Manhattan Rent Index fell 7.8% year over year. Median
asking rent in Q3 was $2,990.
- The Brooklyn Rent Index fell 2.5% year over year. Median asking
rent in Q3 was $2,599.
- The Queens Rent Index fell 2.2% year over year. Median asking
rent in Q3 was $2,200
"Renters are no longer willing to pay the commute premium of
living in Manhattan when they do
not need to commute to an office five days a week," said StreetEasy
Economist Nancy Wu.
"Landlords across the city, but particularly in Manhattan, have to be willing to face some
really hard hits if they want to fill their units. They're being
forced to cut the location premium out of their asking price in
order to compete with larger and more affordable apartments in the
outer boroughs."
These decreases in StreetEasy's Rent Indices are likely a
conservative estimate of how much rents have fallen. This is a
result of a new StreetEasy product enhancement that brings new
transparency to rental pricing in NYC by clearly stating rental concessions,
gross rent, and net effective rent on listings with concessions.
With this new feature, the StreetEasy Rent Index will now track
changes in gross rent rather than net-effective rent.
See below for additional market trends across Manhattan, Brooklyn, and Queens.
Nearly Half of Midtown Manhattan Listings Got a Rent
Cut
Renters looking to find a deal in Manhattan had the most luck in
Midtownii, where 48% of rentals were discounted during
the third quarter — up 25.9 percentage points from last year.
Midtown rent prices dropped 5.7% to $3,000 as demand for units close to Midtown
office buildings fell amid the pandemic.
Brooklyn Rents Dropped for the First Time Since 2010
The third quarter brought the first year-over-year rent drop in
Brooklyn in StreetEasy records,
though the drop was much smaller than the decline seen in
Manhattan. Boroughwide, the Rent
Index fell 2.5% year over year. The drop in rents was led by
Northwest Brooklyniii,
one of the borough's most expensive submarkets, where rents fell
2.1% annually.
Rents in other areas of the borough, including North Brooklyniv and East
Brooklynv, remained flat year over year, showing that
demand for Brooklyn rentals is
relatively higher than current levels in Manhattan.
Queens Rental Inventory Spiked to All-Time High
There were 15,896 rental listings available in Queens during the third quarter — up 41.1%
compared to last year. While this spike is significant, it is lower
than the massive inventory growth seen in Manhattan and Brooklyn.
Queens was the only borough
analyzed in which some submarkets experienced an annual drop in
rental inventory. Northeast
Queensvi, South
Queensvii, and the Rockawaysviii all
had fewer rental listings available this past quarter than they did
last year. This shows that demand for relatively affordable housing
in the city remains stable.
View all StreetEasy Market Reports for Manhattan, Brooklyn, and Queens, with additional neighborhood data and
graphics. Definitions of StreetEasy's metrics and monthly data from
each report can be explored and downloaded via the StreetEasy
Data Dashboard.
About StreetEasy
StreetEasy is reimagining the way people buy, sell, and rent
homes in New York City and
New Jersey. Used more than any
other local real estate platform, StreetEasy's website and mobile
apps provide vetted and verified listings, plus intuitive search
tools and data-driven guides to help people unlock the opportunity
of living here. Consumers and real estate professionals can stay
up-to-date on the latest real estate trends
through StreetEasy's Market Reports and explore and download
market data for free on the StreetEasy Data Dashboard.
Launched in 2006 and based in NoMad, Manhattan, StreetEasy is owned and operated by
Zillow Group (NASDAQ: Z and ZG) and is a registered trademark of
Zillow, Inc.
i The StreetEasy Rent Indices are monthly
indices that track changes in rent for all housing types and are
currently available from January 2007
in Manhattan, January 2010 in Brooklyn, and January
2012 in Queens. Each index
uses a repeat-sales method similar that used to calculate the
StreetEasy Price Indices. The repeat method evaluates rental price
growth based on homes in a given geography that have listed for
rent more than once. More details on methodology here.
ii The Midtown submarket includes Roosevelt Island, Midtown, Central Park South,
Midtown South, Midtown East, Midtown
West, Murray Hill,
Sutton Place, Turtle Bay, Kips Bay,
Beekman, Hudson Yards, Hell's
Kitchen.
iii The Northwest Brooklyn submarket includes
Downtown Brooklyn, Fort Greene,
Brooklyn Heights, Boerum Hill, Dumbo, Vinegar Hill, Red Hook, Gowanus, Carroll Gardens, Cobble
Hill, Columbia St. Waterfront District, Clinton Hill.
iv The North Brooklyn submarket includes
Greenpoint, Williamsburg, East Williamsburg.
v The East Brooklyn submarket includes Bedford-Stuyvesant, Stuyvesant Heights, Bushwick,
East New York, New Lots, City
Line, Starrett City, Crown Heights, Weeksville, Ocean Hill,
Brownsville.
vi The Northeast Queens submarket includes
Flushing, Whitestone, College
Point, Fresh Meadows,
Kew Gardens Hills, Kew Gardens, Bayside, Douglaston, Little
Neck, Auburndale, Glen
Oaks, Floral Park,
Bellerose, Briarwood, New Hyde
Park, Oakland Gardens,
Hillcrest, Pomonok, Utopia,
East Flushing, Murray Hill (Queens), Clearview, Malba, Beechhurst, Alley Park, Queensboro Hill, Bay
Terrace (Queens).
vii The South Queens submarket includes Jamaica
Hills, Woodhaven, Richmond Hill, Howard Beach, Ozone
Park, South Ozone Park,
Jamaica, South Jamaica, Hollis, St.
Albans, Laurelton,
Cambria Heights, Queens Village, Rosedale, Springfield Gardens, Jamaica Estates,
South Richmond Hill, Hamilton Beach, Ramblersville, Rockwood Park,
Old Howard Beach, Howard Park,
Brookville.
viii The Rockaways submarket includes Far Rockaway, Broad
Channel, Arverne,
Rockaway Park, Bayswater,
Belle Harbor, Breezy Point, Neponsit, Edgemere, Hammels, Rockaway All.
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SOURCE StreetEasy