New York City apartment rents have fallen below $3,000 for the first time since 2011. A new report from StreetEasy shows that median asking rent for apartments is $2,990 in the third quarter. Record high rent cuts during the pandemic have led to this decrease. On StreetEasy, 44.7% of apartment listings were discounted, a record for the website.
Manhattan was not the only market segment to see a decline in rents. During the third quarter, the Manhattan Rent Index fell 7.8% year-over-year, bringing the median asking rent in Q3 to $2,990; the Brooklyn Rent Index fell 2.5% year over year, bringing the median asking rent in Q3 to $2,599; and the Queens Rent Index fell 2.2% year-over-year, bringing the median asking rent in Q3 to $2,200.
As rents decreased for existing properties, the apartment supply in New York City also increased, putting more downward pressure on rents. The Manhattan rental inventory increased nearly 70% or 72,267 units. That is 30,000 more units than last year. Renters are no longer willing to pay a premium to live in the city because they do not have to travel to the office, and landlords have had to face the new reality and lower rents to fill units.
In Manhattan, this trend has led to not only more discounted units but a more substantial discount. The median rental discount in Manhattan grew to 9.1% off the asking rent, or $272 off the median rent. This is a 5.2% increase from the average rent discount last year, of $139 more. The Midtown market led the surge in discounts. In the neighborhood, 48% of rentals were discounted in the third quarter, a 25.9% increase compared to discounted rentals during the same period last year. This trend led to an overall Midtown rent decrease of 5.7%, bringing average rents to $3,000.
Apartment rental discounts in Manhattan drove rent declines in the adjacent NYC markets. Brooklyn and Queens rents decreased less than in Manhattan; however, Brooklyn rents fell for the first time since 2010, specifically in Northwest Brooklyn. Other areas of Brooklyn, like North and East Brooklyn remained flat. In Queens, inventory spiked, up more than 41% compared to the same time last year. This is an all-time high for the market.
The decrease in apartment rents has also stalled the investment sales market. A recent report from the Real Estate Board of New York found that multifamily elevator sales have decreased 17% while non-elevator sales have declined 44% in the first six months of the year.