NEW YORK - Rents are still dropping in some parts of New York City, while new lease signings are up as people try to upgrade while prices are at historic lows.
"The rental market has seen a tremendous decline in rents," said Jonathan Miller, President/CEO of Miller-Samuel Inc.
"Until renters come back to the city and there are employment opportunities, we're going to see a surplus of inventory relative to demand," said StreetEasy economist Nancy Wu.
According to Miller, it will be 3-5 years until rents in Manhattan, Brooklyn, and Queens return to pre-pandemic averages, creating both a glut of available apartments and opportunities for those still renting in New York City to upgrade their homes and/or negotiate what they pay.
Landlords in the city, long unwilling to lower their rents, have been forced to entice prospective tenants with concessions.
"We're seeing more concessions than ever on StreetEasy," Wu said. "Right now, we're seeing a lot of developers offering four months free rent."
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With average December rent costs falling 16% in Manhattan, nearly 14% in Brooklyn, and more than 6% in Queens from a year ago, according to MNS Real Estate, October, November, and December also set records for new lease signings.
"In other words, December saw the most new lease signings in Manhattan for a December since 2008," Miller said.
But while falling rents may have triggered renewed interest in the city's rental market, both Miller and Wu remind us that the economic damage inflicted by the coronavirus pandemic will take many years to undo and that extends into the residential rental marketplace.
"This is a baby step in the right direction, but it does not suggest that a recovery is imminent," Miller said.