Renters be warned: competition in the New York City market is red-hot again (if it even went down) as the spring inventory fails to keep up with demand.
A new report out Monday from rental listing platform StreetEasy found Brooklyn to be the most competitive borough among renters. Average listings received nearly 100% more inquiries last month compared with listings back in March 2019, according to the site’s Market Report. Citywide, that average hovers around 70%.
What’s driving interest in Brooklyn? The increase in new housing could be part of it. StreetEasy found that three out of every five new developments across the city were in Brooklyn. New apartments offering appealing amenities tend to attract renters that can afford higher costs.
The dramatic shift in the Manhattan office workforce post-pandemic could also be to blame.
“Fueled by the pandemic and increased flexibility for workers to commute less frequently to Manhattan offices, renters have been increasingly looking to Brooklyn to find additional space at a lower cost compared to Manhattan,” the report found.
But despite the new construction bolstering supply in the borough, the growth in available inventory has slowed significantly. StreetEasy says the spike in mortgage rates last year had some potential buyers sticking put. The number of homes newly up for rent sunk (by about 25%) compared to 2019, due in part to more renters renewing their leases instead of packing up and finding a new home.
And that drop in supply only further fueled competition — something New York renters have become well accustomed to.
Between all five boroughs in March, Brooklyn felt the greatest drop in overall inventory, down by a third. Manhattan and Queens fell too, but they were each closer to 20%. The Bronx went relatively unchanged compared to 2019, while Staten Island’s numbers broke from the pack and shot up in the borough nearly 33%.
The pandemic has had a seismic shift on the state of the city’s housing market, that much is clear. Since Feb. 2020, the average asking rent citywide has shot up some 15%. They reached a record high this March ($3,344), barely squeaking past the record set back in October.
That means renters need to bring home nearly $134,000 in annual income to keep monthly housing costs below the recommended 30% of income. Right now, that’s close to double the city’s median household income. As of 2021, that figure stood at $70,663.
But all is not lost for renters. StreetEasy’s report suggest there may be some hope for those looking to move.
The city’s rental inventory last month rose by about 10% from the month prior. Homeowners looking to strike while the iron’s hot are likely to take advantage of higher rents and put their vacant homes on the market.
“In Manhattan, the typical asking rent was $3,635 in March, up 11% year-over-year. Rental inventory will continue to improve in Manhattan this year, and renters who can afford to stay in the borough will likely see an increase in bargaining power and tapering of yearly rent growth,” the report added.
The average rent in Queens is significantly cheaper, hovering around $2,396, but still 9% higher over last year. Typical asking rent in Brooklyn is $3,168.
“Though sustained demand continues to limit renters’ bargaining power, as inventory slowly begins to rise this year, renters can expect to see slightly milder competition compared to last year’s red-hot market.”