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Demand for rentals in New York plummeted

Christian Fernsby |
Demand for rentals in New York City 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.

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Topics: NEW YORK   

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% 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 Indexii to fall year-over-year for the first time since the Great Recession, sinking 0.9% 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% more searches than 2019, while Queens searches rose 24%.

Even searches for Manhattan rentals increased at 15% 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.

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 Indexiii down 4.1% from last year to $1,062,276.

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.

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.

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