In a world that often feels chaotic with so much happening all the time, one thing remains consistent: Rents in New York City are still too damn high. (We said consistent, not good.)
But as rental activity has, unsurprisingly, slowed in the midst of the novel coronavirus pandemic, market uncertainty is beginning to chip away at rents across the city. And that, along with rental concessions—perks paid for by the landlord—could translate to deals for renters looking to move in the coming months.
On listing website Localize.city, for instance, rents have fallen for 70 percent of apartments listed prior to the statewide stay-at-home order, which went into effect on March 20, according to data gathered by the company.
Those prices have reduced on apartments in all five boroughs with an overall drop in rents between three to five percent: One-bedrooms in Brooklyn on the market before COVID-19 mandated closures, for example, have seen a 4.3 percent decrease in rents on average to $2,700, while across the East River in Manhattan, one-bedroom units have typically seen a 2.4 percent drop, with average rents now at $3,780, according to Localize.city data.
Those may not be mind-blowing reductions, but they’re a signal that rents are trending downward, and likely to continue doing so in the midst of the city’s public health crisis, says Steven Kalifowitz, president of Localize.city.
“Based on what we’re seeing, and anecdotally what I’m hearing, we should expect more rental price cuts in the future,” says Kalifowitz. “I expect we will see people either moving to get a better deal on a bigger / better place, or others downsizing to accommodate lower salary expectations.” Moving is definitely a challenge at the moment, but it’s not impossible, with moving companies deemed essential under Gov. Andrew Cuomo’s PAUSE order. What’s more likely is once restrictions begin to relax in New York City, which could happen as early as June 13, more renters may consider relocating.
That said, rents year over year have actually increased in parts of Manhattan, Brooklyn, and Queens, according to a recent Douglas Elliman report on April rental activity in those boroughs. But that data paints an incomplete picture, according to real estate appraiser Jonathan Miller, who wrote the report.
First of all, that report only accounts for newly signed leases, which represent roughly a third of the rental market, and the number of new leases have plunged compared to April last year, with a 71 percent drop in Manhattan, a 67 percent decrease in Brooklyn, and a 65 precent reduction in Queens. All this to say that it’s an “apples to oranges” comparison, says Miller, who actually believes rents are going down, and that the data will bare that out in the coming months.
“Are rents softening? Absolutely,” says Miller. “If you look at an individual apartment on the market today that would be newly rented it’s generally less—there’s no argument there.” This two-bedroom apartment listed in Bushwick, for instance, recently saw a 6 percent price drop from $2,450 to $2,300.
But where renters searching for a new apartment could see the biggest boon are rental concessions, such as a month or two of free rent tacked on to a new lease, or the landlord paying for additional utilities or others amenities. Noah Rosenblatt, CEO of UrbanDigs, a Manhattan real estate data firm, notes that “there’s a lot more concessions to be had versus pre-COVID.”
“If you can get two months free at $3,500 a month, your net effective rent goes way down,” says Rosenblatt. “It’s just another way of getting that rental rate reduced in an environment where landlords typically are not so quick to start rushing to reduce those rents.”
Miller says it’s lease renewals “where the action is happening,” and that landlords are likely more willing to negotiate rent reductions with existing tenants given the current economic climate. StreetEasy Economist Nancy Wu also notes that landlords are ramping up “flexible rental options” such as short term or month-to-month leases.
Data gathered by Streeteasy shows that listings offering short term or month-to-month leases jumped 70 percent year over year, with many of those rentals located in Manhattan. Overall tenants have more options, and perhaps more of a chance at landing a deal, than they did prior to the pandemic.
“It’s a good time to look for options besides the typical one-year lease, especially for renters facing uncertainty in the coming months,” says Wu. “For renters looking to move right now, greater flexibility on the market could indicate a greater willingness among landlords to respond to renters’ needs.”