The NYC Real Estate Market Rebound Has Begun

The COVID-19 pandemic had New York City’s real estate market reeling for over a year. But the tide has now turned on both the rentals and sales markets. Our May 2021 Market Reports show that the NYC real estate market rebound has begun.

NYC Real Estate Rebound: Rents Are Rising Again

Recent lower rents, combined with the city’s reopening and the rollout of the vaccine, have drawn renters back substantially. We’ve hit a point where rents are now beginning to tick back up.

In May, median asking rents rose from the month before in Manhattan, Brooklyn, and Queens for the first time since before the pandemic. In Manhattan, the median asking rent rose $60 to $2,860. In Brooklyn, it was up $49 to $2,449. And in Queens, asking rents rose $50 to $2,100.

While the rebound has certainly begun, our economist believes it will be quite a while before rents reach their pre-pandemic highs again. Citywide, the median asking rent remains where it has been for the past six months: $2,500, the lowest on StreetEasy record.

Spring Home-Shopping Season Is Returning

On the sales side, inventory has started to normalize after plummeting last summer, followed by a spike to record highs in the fall. There were 21,556 homes for sale on StreetEasy in May. That’s similar to the number seen in 2019, during our last “typical” spring home-shopping season. 

The number of homes entering contract was still exceptionally high at just over 3,200 for the three boroughs analyzed. But is beginning to plateau compared to the massive month-over-month spikes seen since the beginning of 2021. 

Brooklyn Real Estate Is on the Rise

The real estate rebound is happening all over NYC, but Brooklyn is particularly hot. The borough saw a record high number of homes entering contract for the third month in a row. In May, 1,079 Brooklyn homes went into contract. Manhattan saw 1,672 pending sales — a near-record high beaten only by April 2021. Queens had 479 contracts signed in May. That’s on par with May 2019, before the pandemic, when there were 474 pending sales.

NYC Homes Are Selling Faster

New York City homes coming off the market also sold faster in May than any other month this year. The average NYC home spent 56 days on the market in May. That’s down from 68 days in April and a huge drop from 116 days in January 2021. Further proof that a NYC real estate rebound is underway.

What About the So-Called Urban Exodus?

“As we predicted last year, our data is clearly showing that the fears of an urban exodus have subsided. The vibrancy and energy of the city is returning, and the real estate market is following suit,” says StreetEasy economist Nancy Wu. 

“For renters and buyers who might be worried about a spike in prices coming, it’s important to look at the bigger picture. Competition is much higher now than it has been in the past year. But there is still lots of inventory to go around. It will still take several months for rents to return to pre-pandemic levels, and sales prices still have room to fall.”

Manhattan Rents Are Furthest from Pre-Pandemic Highs

• Manhattan median asking rents rose $60 between April and May to $2,860. But that is still 18% lower than the pre-pandemic high of $3,500 seen in March 2020.
• Rental inventory in Manhattan has continued its downward trajectory, with 25,840 rentals available in May. Prior to the pandemic, the record high number of rentals available in Manhattan was 27,288, way back in June 2017. 
• In May, the StreetEasy Manhattan Price Index was 8% lower than in May 2019, prior to the pandemic. The median asking price for a Manhattan home in May was $1,395,000. 

Concessions in Brooklyn Are Becoming Harder to Find

• The share of rentals with a concession in Brooklyn reached a record high 26% in January 2021. But that could quickly change as rents begin to rebound. In May, 22% of rentals were advertising a concession. 
• There were 19,118 Brooklyn rentals available in May. That’s down 26% from the highs seen last summer, but still higher than any time before the pandemic. There is still lots of inventory to go around. 
• In May, the StreetEasy Brooklyn Price Index was 5.4% lower than in May 2019, prior to the pandemic. The median asking price for a Brooklyn home in May was $949,000.

Rental Discounts Hit a Three-Year Low in Queens

• In another sign of a NYC real estate rebound, just 10.6% of rentals in Queens were discounted by the landlord or agent in May. That’s the lowest share since July 2018, when 9.1% of rentals were discounted.
• Queens rental inventory is staying elevated compared to the other boroughs analyzed. In May, there were 7,174 rentals available in Queens. This is as high as it was last summer in the midst of the pandemic, and still 30% higher than May 2019. 
• In May, the StreetEasy Queens Price Index was 1% lower than in May 2019, prior to the pandemic. The median asking price for a Queens home in May was $619,000.

View all StreetEasy Market Reports for Manhattan, Brooklyn, and Queens, with additional neighborhood data and graphics. Definitions of StreetEasy’s metrics and monthly data from each report can be explored and downloaded via the StreetEasy Data Dashboard.

Editor’s Note: In March 2020, New York City’s housing market temporarily froze as the COVID-19 pandemic began in the U.S. in earnest. Stay-at-home orders were widespread. Year-over-year data comparisons over the next few months will be made against both the COVID freeze of the spring, and subsequent housing recovery that began last fall. Assuming 2021 is more typical of a “normal” year in housing than 2020 was, with little to no activity in the spring and summer, we expect many of our year-over-year measures will show large gains over last spring and summer. We urge you to use caution in extrapolating too much from year-over-year measures in coming months, and we will always try to provide appropriate context to anchor reported changes in metrics to what is normal or expected.

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