New York City rents have fallen farther this year than they did during the Great Recession, according to a report released today by real estate listings site StreetEasy.
Manhattan rents fell 12.7%, compared to dropping 10% around the recession that started in 2008, with the median asking rent reaching a 10-year low of $2,800 in November.
Outer borough rents also fell, dropping 6.3% in Brooklyn and 5.7% in Queens year over year, which also set records. After the 2008 financial crisis, rents in Brooklyn fell by around 5%, while rents in Queens remained fairly stable.
The median asking rent is $2,400 in Brooklyn and $2,100 in Queens.
The fall is propelled by a rental inventory in New York City that’s more than double that of last year, with an overall increase of 37,000 rentals.
“We expected the rental market to match the weakness seen during the Great Recession, but the fact that the market has surpassed that level in less than one year shows how serious the crisis caused by the pandemic has been,” said StreetEasy Economist Nancy Wu in a statement.
The COVID-19 pandemic caused the decline, though it’s not clear how long it will take to recover.
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“Following the Great Recession, the rentals market did not strengthen until the jobs market recovered,” Wu told Forbes. “The situation we’re currently in is bound to be very similar. Many of the city’s small businesses have closed permanently, and it will take time for new business and jobs to be created in their place. Because of that, even when the vaccine is widely available to the public, the city’s rental market will not strengthen to pre-pandemic levels until the economy fully recovers.”
As it did for the buyer’s market, Midtown Manhattan saw the steepest discounts, with 30.7% of landlords discounting the monthly rent on their units, an increase of 8.4% points over last year.
Brooklyn rents dropped most in the in the most expensive neighborhoods. For example, the median asking rent in Northwest Brooklyn, the borough’s most expensive submarket, was $2,800, down more than 5% from last year and the lowest it’s been in eight years, according to the report.