Renter Demand Drives Record Drop in Available NYC Rental Inventory

It’s been a topsy-turvy year for NYC real estate ending with a rental resurgence. The number of apartments available for rent in New York City in Q4 2021 was less than half of what was available the year before. In 2020, there were 128,167 apartments available for rent during the fourth quarter compared to 60,966 in 2021. This stunning 52.4% decrease in NYC rental inventory was the largest on StreetEasy record dating back to 2010. That said, the number of apartments listed for rent in Q4 was on par with what was listed in Q4 2019, just before the pandemic (59,853 units on the market in 2019 compared to 60,966 units on the market in 2021). 

As NYC rental inventory tightened, rent prices rebounded dramatically since the start of the year. In the first quarter of 2021, the median asking rent for the entire city fell to the lowest level on StreetEasy record ($2,420). Soon after, there was a resurgence in the rentals market, with rents rising quarter-over-quarter.

The median asking rent in New York City rose to $2,700 in the fourth quarter — an increase of 8.2% from the previous year and 11.6% from the first quarter. This was the largest annual increase in rents for any given quarter on StreetEasy record.

Citywide Rents Have Not Fully Recovered

While rents are rising considerably, they have not yet reached their pre-pandemic highs. Before the pandemic, rents in the summer of 2019 were around $2,850 — $150 more per month than they are currently. 

Due to seasonality, it’s typical to see rent growth slow during the winter months, which we expect will be the case heading into 2022. 

Expensive Areas Are Seeing Record High Rents

Rents recovered fastest, and in some cases, have surpassed their pre-pandemic levels in some of the city’s most expensive areas. Now that the city has opened up, demand has returned to these areas, and renters with larger budgets are anxious to move back into these central areas of the city. 

In the Downtown Manhattan submarket, which includes neighborhoods like Flatiron, West Village, and Battery Park City, median asking rents grew by 40% year-over-year to $4,200 — $300 more than their pre-pandemic high in October 2019. 

Of the neighborhoods in Downtown Manhattan, Soho — already one of the most expensive neighborhoods in the city — led the rent growth, jumping 57.9% to a median asking rent of $6,002. Soho also took the top spot on our list of the 2022 NYC Neighborhoods to Watch because of its increase in rent and sale prices.  

NYC Rental Inventory Set To Make a Comeback 

The rentals market saw an incredible comeback at the end of the year, which is good and bad news for renters. StreetEasy economist Nancy Wu believes there’s a shift coming soon.

“The market is in the process of normalizing after nearly two years of uncertainty. That’s good news for the city’s recovery overall, but, understandably, many renters or hopeful renters might be feeling uneasy right now,” says Wu. 

“This winter will bring a lot of change to the rentals market. Concessions that landlords gave at the beginning of last year will expire, leaving many renters with no choice but to move out of their Covid-era discounted rentals. This should boost rental inventory in the most competitive neighborhoods and give renters on the market some reprieve from the rapid price growth we’ve seen throughout the last year.” 

Find out more about the rental market in Manhattan, Brooklyn, and Queens. 

Renters Are Coming Back to Midtown

Rents in Midtown Manhattan jumped by 36.2% year-over-year to $3,895 in Q4 2021 — the second-highest spike in rents after Downtown Manhattan. Midtown rents reached a record low, $2,860, a year ago during the height of COVID rent discounts. 

Deals Disappear as Demand for Larger Units Grow in Manhattan

Rental concessions were scarce during the fourth quarter, with 17.1% of units advertising at least one month of free rent. That is on par with what is typically seen during a busy summer rentals season. In 2019, 14.2% of rentals were advertising a concession during Q2.  Concessions reached a record high in Q1 2021 when 42.8% of Manhattan rentals were advertising at least one free month of rent. 

Rents for two-bedroom apartments rose the fastest of all apartment sizes in Manhattan, up 28.1% from Q4 2020. The two-bedroom median asking rent was $4,100 — the highest it’s been since Q1 2020 when it was $4,200. This increase in two-bedroom rents supports the thought that space has become even more valuable to New Yorkers. 

Downtown Brooklyn Rents Hit Record Highs 

Of all Brooklyn neighborhoods, Downtown Brooklyn rents rose the most year-over-year, with 36.6% growth. Rents in the area reached a median of $3,985 — the highest on StreetEasy record. 

Apartments with a concession were more challenging to find in Brooklyn in Q4 than any other point this year. Borough-wide, 13.8% of rentals on the market were advertising a concession, a 6.6%  decrease from last year. For comparison, 24.9% of Brooklyn rentals were advertising a concession in Q1 2021. 

Demand for larger units also grew in Brooklyn. Median asking rents for apartments with three or more bedrooms rose the fastest in Brooklyn, up 14.3% from last year to $3,199. Rents for 2-bedroom units rose 8.3% to $2,600.

Queens Rents Rose for Third Quarter in a Row

The median asking rent in Queens rose 11.1% year-over-year to $2,250 in Q4 2021. This was the third consecutive quarter of rent growth in the borough. In Q1, the median asking rent was $1,999. 

Landlords in Queens offered the lowest share of concessions of all boroughs analyzed. Of all rental units on the market in Queens, 12.5% advertised at least one month of free rent, an 8.8% decrease from last year. 

Similar to Brooklyn, the median asking rent for Queens’ apartments with three or more bedrooms rose the fastest, jumping 9.4% year-over-year to $2,899 — nearly matching the pre-pandemic high of $2,900. 

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. In 2021, the real estate market roared back to life, with demand returning to both the rentals and sales markets. Year-over-year data comparisons over the next few months will be made against the housing recovery that began at the beginning of 2021. Assuming 2022 is more typical of a “normal” year in housing than 2020 or 2021 were, with times of little to no activity followed by massive spikes in demand, we expect many of our year-over-year measures will show significant losses over last winter and spring. We urge you to use caution in extrapolating too much from year-over-year measures in the coming months, and we will always try to provide appropriate context to anchor reported changes in metrics to what is normal or expected.