NYC Rent Declines Surpass Those of the Great Recession

Rhea-AI Summary

According to StreetEasy, New York City rents have experienced a greater decline in 2020 than during the Great Recession. Manhattan saw a 12.7% year-over-year drop, with a median asking rent of $2,800, the lowest in a decade. Brooklyn and Queens followed with declines of 6.3% and 5.7%, respectively. The rental inventory has surged, doubling year-over-year to nearly 37,000 additional homes. StreetEasy attributes these trends to the economic fallout from the pandemic, suggesting a sluggish recovery ahead despite potential boosts from COVID-19 vaccines.

Positive

• Rents in Manhattan dropped 12.7%, indicating a significant market adjustment.
• Median rents are at a 10-year low, providing opportunities for renters.
• Increased rental inventory of nearly 37,000 homes suggests a robust market supply.

Negative

• Brooklyn and Queens rentals decreased by 6.3% and 5.7%, indicating widespread market weakness.
• The pandemic has caused severe economic fallout, challenging market recovery.
• High inventory levels may lead to prolonged rental discounts and revenue pressure.

NEW YORK, Dec. 16, 2020 /PRNewswire/ -- New York City rents have fallen more this year than they did during the Great Recession, according to StreetEasy's November 2020 Market Reports.

Driven by the Covid-19 pandemic, Manhattan rents dropped the most out of the three boroughs analyzed — falling a whopping 12.7% year over yearⁱ. In November 2020, the median asking rent in Manhattan reached a 10-year low of $2,800. During the Great Recession, Manhattan rents decreased by about 10%.

In Brooklyn, rents dropped 6.3% year over year, and the median asking rent was $2,400. After the 2008 financial crisis, rents in Brooklyn fell by around 5%.

Meanwhile, Queens saw a 5.7% annual decline in rents in November. This was a record large drop for the borough, where rents remained relatively stable during the Great Recession. The median asking rent in November was $2,100.

Prior to the pandemic, NYC rents had been steadily rising for about a decade. But the economic fallout from Covid-19 has taken a severe toll on the market. Our recent 2021 predictions report noted that a weak economy results in a weak rentals market, which is reflected in the latest data.

While rents plummeted, rental inventory continued to pile on. In November, there were more than double the number of rental units available than at the same time last year in New York City — a net increase of nearly 37,000 homes.

"We expected the rental market to match the weakness seen during the Great Recession, but the fact that the market has surpassed that level in less than one year shows how serious the crisis caused by the pandemic has been," said StreetEasy Economist Nancy Wu. 

"The rollout of COVID-19 vaccines and plenty of great rental deals will be the catalyst for many to return to the city, but we're still a long way from the city's return to normal. Until that happens, inventory will remain high and renters will continue to enjoy deals that were unheard of a year ago."

See below for additional market trends across Manhattan, Brooklyn, and Queens.

One in Three Midtown Manhattan Rentals Were Discounted in November

The share of apartments that had a rent cut in November increased in all five submarkets in Manhattan, but Midtownⁱⁱ led the way, with 30.7% of landlords discounting the monthly rent on their units. That was an increase of 8.4 percentage points from last year. Boroughwide, the share of rent cuts rose by 5.9 percentage points year over year, to 27.2% in Manhattan. 

Brooklyn Rents Fell Furthest in the Most Expensive Neighborhoods

The median asking rent in Northwest Brooklynⁱⁱⁱ, the borough's most expensive submarket, was $2,800 — the lowest it's been in eight years. Compared to last year, rents were down 5.1% in these neighborhoods. There were 21,670 rentals on the market in Brooklyn in November, an increase of 134% from last year. 

Queens Saw the Slowest Growth in Rental Inventory 

Rental inventory across the borough was 75% higher than last year in Queens. While this was a sharp increase, it was the smallest of all boroughs analyzed. Queens' population tends to be more stable and less transient, which is why housing metrics do not fluctuate as much as in other boroughs. Mirroring the rest of the city, Queens rents did fall year over year, but at the slowest rate in the city, at 5.7%.

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.

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SOURCE StreetEasy

FAQ

What is the percentage drop in Manhattan rents as reported by StreetEasy?

Manhattan rents fell by 12.7% year over year.

What was the median asking rent in New York City in November 2020?

The median asking rent in Manhattan was $2,800.

How much did Brooklyn rents decline in 2020 according to StreetEasy?

Brooklyn rents fell by 6.3% year over year.

What factors contributed to the decline in NYC rents in 2020?

The COVID-19 pandemic and its economic fallout are the primary factors.

How has rental inventory changed in NYC as of November 2020?

Rental inventory increased by nearly 37,000 homes, more than double the previous year.