Rising Rents and Fierce Competition: Navigating NYC's Post-Pandemic Rental Market

According to StreetEasy, NYC's rental market has witnessed a substantial rise in both demand and rental prices. In May 2023, the median asking rent soared to a record $3,700, representing a 10.7% year-over-year increase. This upswing in rent prices citywide has spurred growth in rental inventory, which has risen by 18.5% compared to May 2022. Nevertheless, current inventory remains 22.6% below pre-pandemic levels, reflecting a scarcity that adds to the competitive rental landscape.

Queens has emerged as the toughest rental market in the city. The borough has seen inquiries more than double compared to pre-pandemic times, primarily due to its relative affordability compared to Manhattan and Brooklyn. Despite the increased interest, Queens' median asking rent climbed 12% year-over-year to hit $2,800 in May. The available inventory, however, is still constrained, sitting 28.4% lower than May 2019 levels. The most in-demand neighborhoods within Queens are Long Island City, Astoria, and Sunnyside.

In Manhattan, the median asking rent was reported at $4,395 in May, marking a 9.9% surge from the previous year. The most appealing areas to renters included the Upper East Side and Upper Manhattan, encompassing neighborhoods like Harlem and Morningside Heights.

Brooklyn trailed Queens as the second most sought-after borough. The median asking rent across the borough increased 10.2% year-over-year to reach $3,400. The borough's highest demand was for neighborhoods in the vicinity of Prospect Park, such as Park Slope and Prospect Heights.

Looking ahead, factors like affordability and commute times will remain crucial for renters. Yet, even with the increase in rental inventory since the start of the year, experts don't predict a substantial drop in rental prices. However, as more rentals are listed, annual rent growth is likely to slow down post-summer. This suggests that renters with flexibility in their moving dates might be privy to a wider choice of housing options and less intense competition later in the year.

Even amidst these challenging circumstances, the city's robust labor market continues to drive demand for rentals, making the competition among renters quite intense, although not as fierce as during the market's peak last summer. It was found that the average rental listing on StreetEasy received 76% more inquiries in May compared to pre-pandemic figures from May 2019.

In Manhattan, despite the high median asking rent, rentals remained popular as more workers returned to the office at least part-time. The Upper East Side, in particular, saw a spike in demand with the average listing receiving over double the number of inquiries from renters compared to May 2019. The neighborhood's median asking rent rose 15% year-over-year to $3,910 in May. Rental inventory in Manhattan rose by 27.5% year-over-year, indicating that high asking rents are prompting homeowners to rent out their properties instead of selling them.

Brooklyn, being the second most in-demand borough, showed a 108% increase in inquiries for an average listing compared to May 2019. While renters sought more space at lower costs compared to Manhattan, the scarcity of inventory led to sharp increases in asking rents. However, neighborhoods near Prospect Park, such as Park Slope and Prospect Heights, attracted significant interest due to their green spaces and convenient public transit access.

As the return to offices picks up pace and more New Yorkers consider commute times, neighborhoods providing easy access to public transportation and relatively affordable pricing, like Park Slope and Prospect Heights in Brooklyn, and Astoria and Sunnyside in Queens, are expected to rise in popularity. Although the summer season is predicted to see near record-high rental prices, the subsequent growth in rental inventory might offer renters more options and slow down yearly rent growth later in the year.