New York Rents Fall 15.3% Since March

Rents in New York decreased 2.8% month-over-month in October, and are down by 15.3% since the start of the pandemic in March, according to the November 2020 New York Rent Report from Apartment List.

Since the pandemic began, New York has had the second-fastest decline among the nation’s 50 largest cities. Compared to October 2019, rents are down 17.0%.

Right now, median rents are $1,619 for a one-bedroom apartment and $1,703 for a two-bedroom apartment in New York. After rents increased last December, they have fallen ten straight months. The city’s year-over-year rent growth lags the state average of -7.0%, as well as the national average of -1.4%.

Despite the city’s current struggles, Marty Burger, CEO of Silverstein Properties, a New York office and apartment developer and owner, believes things will improve once people return to work.

“I think the residential will follow the office, obviously,” Burger tells GlobeSt.com. “New York City itself is hurting right now on the multifamily side because the offices aren’t filled, and the companies aren’t demanding that their people be here. The folks that are filling those seats don’t feel a need to be in the city.”

Burger says apartment owners are experiencing 10%, 15% and 20% declines in occupancy because workers aren’t required to be in the city.

“The attractions aren’t open, the Broadway shows aren’t open and people don’t feel the need to be here,” Burger says. “When those things start to come back, that’s when we’ll start to get the apartments filled up again.”

While the national rent index is down 1.4%, performance varies dramatically, according to Apartment List. Since the pandemic began, San Francisco posted the largest rent decline of 21.7%. It was followed by New York, Seattle (-14.0%), Boston (-13.6%) and San Jose, Calif (-12.2%).

As renters look to leave high-cost metros, landlords in smaller cities are benefitting. The largest rent growth since the pandemic has been posted by Boise, ID (9.4%), Toledo, OH (8.4%), Chesapeake, VA (8.2%), Greensboro, NC (7.9%) and Reno, NV (6.6%).

Some apartment owners in the Southeast are seeing an influx of demand in their portfolios.

“We’re seeing actual population shifts,” William Spransy, CFO of North Carolina-based, Eller Capital, told GlobeSt.com in an earlier interview. “I believe demand is still extremely strong in the Carolinas as the pandemic has only accelerated the trend of migration out of the more densely populated areas to lower cost and lower density regions of the Southeast.”