If you’ve been thinking about moving to New York City over the past year, it’s time to pull the trigger.
After a year of cheap rent, prices are up as much as 61% compared to last year in several New York City neighborhoods ranging from the most sought-after by young transplants like NoHo, Hell’s Kitchen and Chelsea to those further away from Manhattan like Brighton Beach and Glen Cove. Data gathered by Thinknum Alternative Data shows that rental prices across 11 New York City neighborhoods owned by three major rental property REITs — United Dominion Realty, Equity Residential, AvalonBay Communities — have crept up by 21% on average compared to last year. Some of the most significant increases in rent have occurred in the last three months as vaccines have become more readily available across the country.
The desperate state of landlords in New York City has been in the news over the past year of lockdown as frequently as updates on COVID-19 cases. Stories of landlords offering discounts, perks and deals to fill units that would have leased for far more months earlier were — and still are – abound. As recently as February, landlords were offering 2.3 months of free rent to renters on average, according to Bloomberg. It wasn’t uncommon to hear of things like gift cards or other perks attached to signing a lease to sweeten the deal.
Despite attempts to sweeten the deal, landlords were still left hanging. A report released by McKinsey based on LinkedIn data in February showed that the rate of new workers moving to New York City had decreased by 27%. Many young professionals, couples and families fled the five boroughs for suburbs or cheaper cities across the country like Milwaukee or Kansas City.
But only a few short months into the Biden presidency, during which vaccines have become abundant and the president has signalled that the country is ready to turn the corner on the pandemic, landlords are seizing on the opportunity to bump rent prices back up. With the return of some degree of normalcy, landlords appear to be betting that rental traffic in New York City will return as well.
And to some degree, they’re right. Web traffic for Zillow is up 133% over the last two years, which means more people are browsing through rental properties and likely entertaining the possibility of moving to New York or another major metropolitan area.
Zillow’s App Store reviews are also up 58.8% year-over-year with a spike occurring between early March 2021 and now. That may be a sign that potential renters see the same writings on the wall that landlords do, and are looking to finally take the plunge before prices get ratcheted back up. I can count myself among them — rather than wait until the summer, I chose to move to New York in the spring out of fear of missing out on a once-in-a-lifetime deal on an apartment.
There are still several question marks over how hard and fast the cost of rent will return to its previous state. Although nearly half of eligible adults have already received a single dose of the vaccine, a booster shot within the next six-to-twelve months has become a near certainty, casting a cloud over the possibility of things "returning to normal" this summer. The current outbreak in India, which is among the worst seen during the pandemic, could give way to the spread of new variants and is being viewed as a threat to the world's progress in the fight against coronavirus. It's yet to be seen how severe of an effect these developments will have on the States' effort to curb COVID-19, but landlords may still find themselves without potential renters for their now more expensive apartments.
About the Data:
Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.