After a slow 18 months, rents are on the rebound throughout the city. So much so that New York City is now the most expensive rental market in the country, surpassing San Francisco for the first time since at least 2014.
That’s according to data from real estate site Zumper. Their August report found that the median asking rent for a one-bedroom in New York rose to $2,810, just slightly above the $2,800 asked in San Francisco. It’s not a big difference but it’s the first time New York has nabbed the top spot since Zumper began tracking these numbers in 2014.
As two of the most heavily hit cities early on in the pandemic, both New York and San Francisco saw rents dip as renters embraced the freedom afforded by remote work. When the vaccine became widely available and urban amenities started opening up, people flocked back to New York much faster than San Francisco, where tech workers are still predominantly working from home. Since January, New York rents have jumped nearly 20%, but in San Francisco rent is up only 5%.
“This was unthinkable even two years ago,” Zumper’s report states. “In early 2019, median one-bedroom rent in San Francisco was over $800 higher than New York’s, but a combination of rising rent in the Big Apple and falling rent in the Bay Area caused the spread between rent in the two cities to slowly dwindle.”
According to Streeteasy, Manhattan’s overall median rent ($2,675 in July) is still significantly lower than pre-pandemic levels, but several downtown neighborhoods are starting to see record-breaking prices. In the Flatiron, for example, the median rent in July was $5,304 — $100 more than the previously recorded high. In Midtown, rents are roughly around where they were before the pandemic, with a median ask of $4,000 last month compared to $4,055 in January 2020.
The rental landscape is starkly different to what it was at this time last year, when renters were leaving the city in droves. In August 2020, the number of vacancies reached a 14-year high while new leases were down 23% compared to the same time period in 2019. Demand has spiked again this summer, with many New Yorkers returning to the city, in addition to newcomers who have arrived to take advantage of the unusually low prices. Landlords are noticing the interest and reacting: Last July, 29.1% of rentals in New York City advertised a discount while this July, only 9.1% did — that’s the lowest rate of discount in a decade.
“They are trying to make up for time and money lost during the pandemic’s lull by raising prices and erasing discounts,” StreetEasy economist Nancy Wu said. “Prospective renters should be prepared for tougher negotiations over the next few months as NYC rents continue rising. But I expect price growth and landlord expectations to normalize as we head into the colder months.”