As New York City faced the worst impacts of the coronavirus pandemic in the second quarter of 2020, the city’s real estate market reeled.
Demand for rentals plummeted at a time when it normally rises, interest in the outer boroughs shot upward, and rents in Manhattan fell for the first time since the Great Recession, according to StreetEasy’s Q2 2020 Market Reports.
The period saw a record high for rental discounts in Manhattan: 34.7 percent of all borough rentals received a discount. Landlords cut a record 6.7 percent off the median asking rent in the borough, equivalent to $221 per month for the median apartment.
The same drop in demand also caused the StreetEasy Manhattan Rent Index to fall year-over-year for the first time since the Great Recession, sinking 0.9 percent to $3,236.
Yet while demand for new rentals fell, interest in those same apartments — as measured by anonymized StreetEasy user search data — rose over last year, especially in the outer boroughs.
Stay-at-home-orders drove a flood of interest in online resources and home shopping, and StreetEasy searches for rentals in all three boroughs analyzed increased over last year.
Brooklyn saw the biggest jump in user interest, with 26 percent more searches than 2019, while Queens searches rose 24 percent. Even searches for Manhattan rentals increased at 15 percent year over year.
This data suggests that in addition to renters with expiring leases who were looking to move, many were watching curiously to see how the pandemic might impact New York City’s historically high rents.
Landlords, meanwhile, responded to the stay-at-home restrictions with a surge in virtual tour offerings. During the second quarter, real estate agents and landlords uploaded 54 times more walkthrough videos, and 10 times more floorplans, on rental listings than they did in the first quarter.
“Commuting to the office and living in the center of the city were simply not on the list of priorities for renters during this past quarter, and landlords reacted by slashing rents and trying new tactics in order to attract tenants,” says StreetEasy Economist Nancy Wu.
“Landlords are in for a much slower than normal summer rentals season, even as the city slowly begins to reopen. Remote work has given many renters the option to live anywhere they please, making it too soon to predict when rents will rebound.”
See below for additional sales and rental market trends across Manhattan, Brooklyn, and Queens.
Rents and Home Prices Fall in Manhattan
The pandemic and surrounding health precautions caused the first year-over-year drop in Manhattan rents since the Great Recession. The StreetEasy Manhattan Rent Index fell 0.9% to $3,236. Rents dropped the furthest on the borough’s most expensive apartments, with the top quintile, or the most expensive 20% of the market, seeing a 1.4% decrease in rents to $6,325. Sales prices also fell, with the StreetEasy Manhattan Price Index down 4.1% from last year to $1,062,276.
Brooklyn Home Prices Drop at Fastest Rate in 7 Years
The StreetEasy Brooklyn Rent Index increased 2.6% to $2,728, the slowest pace of growth since the fourth quarter of 2018. More than 1 in 4 (25.6%) rentals were discounted during the second quarter, an increase of 8.6 percentage points year-over-year. The StreetEasy Brooklyn Price Index fell 1.6% to $687,160, marking the largest year-over-year drop in home prices in seven years. Sales inventory was down 31.5% compared to the second quarter of 2019.
Queens Rents Climb, But More Slowly
Rents in Queens continued to climb, but at the slowest pace in two years. The StreetEasy Queens Rent Index rose 1.2% to $2,196 during the second quarter. More than one in five (22.5%) rentals were discounted in the borough — an increase of 4.7 percentage points from last year, and the largest share of discounts since the third quarter of 2018. Home prices in Queens remained flat compared to last year at $507,321.