A record high share of rent cuts contributed to a Manhattan median asking rent of $2,990 in the third quarter of 2020 — the first time this figure has been below $3,000 in nine years.
The share of Manhattan rental listings on StreetEasy that was discounted during the third quarter rose 22.7 percentage points year-over-year to a record high of 44.7%, as landlords made attempts to attract tenants amid a rental market that has struggled considerably since the coronavirus pandemic hit in the city.
Meanwhile, rental inventory in Manhattan increased by 69.8%, with 72,267 available listings — nearly 30,000 more than last year. Discounts didn’t only become more common, they also grew substantially larger. The median rental discount in Manhattan hit 9.1% off the asking rent — 5.2 percentage points higher than last year. In dollar amounts, the median discount being offered by Manhattan landlords was $272 during the third quarter — $139 more than what was being offered in 2019.
The Manhattan rentals market had the most drastic spike in discounts, but the outer boroughs were not far behind. The share of rentals discounted reached a record high of 30.7% in Brooklyn, and a near-high of 26.6% in Queens.
The massive spike in discounts was one factor behind the StreetEasy Rent Index falling year-over-year in all three boroughs analyzed. This quarter marks the first time in StreetEasy records, dating to 2010, that all three boroughs saw rents fall.
The Manhattan Rent Index fell 7.8% year over year. Median asking rent in Q3 was $2,990.
The Brooklyn Rent Index fell 2.5% year over year. Median asking rent in Q3 was $2,599.
The Queens Rent Index fell 2.2% year over year. Median asking rent in Q3 was $2,200
“Renters are no longer willing to pay the commute premium of living in Manhattan when they do not need to commute to an office five days a week,” said StreetEasy Economist Nancy Wu.
“Landlords across the city, but particularly in Manhattan, have to be willing to face some really hard hits if they want to fill their units. They’re being forced to cut the location premium out of their asking price in order to compete with larger and more affordable apartments in the outer boroughs.”
These decreases in StreetEasy’s Rent Indices are likely a conservative estimate of how much rents have fallen. This is a result of a new StreetEasy product enhancement that brings new transparency to rental pricing in NYC by clearly stating rental concessions, gross rent, and net effective rent on listings with concessions. With this new feature, the StreetEasy Rent Index will now track changes in gross rent rather than net-effective rent.
