New York rents and house prices fell at their fastest annual rate in January, signaling that the city’s real estate market is still declining, according to the January 2021 StreetEasy Market Reports.
Ask Rents Has Not Become So Low Of Years
Rents in all NYC townships analyzed fell at the fastest year-over-year, dropping 15.5% in Manhattan and 8.6% and in Brooklyn and Queens. The average asking rent in Manhattan was $ 2,750 – the lowest since March 2010. In Brooklyn, the average asking rent in January was $ 2,395; in Queens, it was $ 2,000.
An important reason for these steep rental declines is the large amount of supply. While the pace of new listings has slowed compared to its peak in the fall, there are still twice as many rentals available in Manhattan and Brooklyn a year ago, and almost as much in Queens.
Buyers Are Back, But Prices Still Have A Mark To Fall
On the retail market, Manhattan and Brooklyn both saw record prices decline, with the StreetEasy Price Index declining 6.2% and 5.4% respectively from year to year. The median price performance in Manhattan was $ 1,350,000; in Brooklyn, it was $ 925,000.
These remarkable price falls occurred despite a continued increase in buying activity. In Brooklyn, pending sales grew 17.3% year-over-year. In Manhattan, pending sales jumped 30.8%, led by a huge increase in contracts signed for luxury homes, defined as the top 20% of the market (more than $ 3.7 million). The number of luxury contracts signed grew by 57% over last January.
However, as with the rental market, the growth of signed contracts has not yet been sufficient to offset the empty available sales stock, causing prices to fall.
“It’s rare that we see record high prices in both the rental and sales markets, but landlords and sellers are dealing with the same thing right now – superfluous competition and not enough demand,” said Nancy Wu, a street economist.
“Demand prices and monthly rents are falling rapidly, meaning landlords and sellers are finally facing a reality. With stock levels so high, they currently have no end when it comes to falling real estate prices in New York City – good news for buyers and tenants who hopes to ensure a good deal this year.
Manhattan Prices Fall, But Sellers Have Made Less Cuts
Manhattan led when it fell in prices, with a 6.2% annual decline. But the share of homes offering a price cut in January – 11% – was 1.6 percentage points lower than last year. According to Wu, this may be because sellers entering the market are pricing their homes more realistically from the start.
Brooklyn Buyers Catch Homes Faster
Brooklyn homes came out of the market more than two weeks faster than last year as buyers sought a good deal. Expected sales grew 17.3% across the township, led mostly by the most affordable home. Contracts were signed for 141 homes in the cheapest 20% of the market – more than double last January, an increase of 117%. By comparison, the top 20% of the market saw a 10.4% increase in signed contracts.
Rents in Queens Reach a Major Milestone
The average asking rent in Queens in January was $ 2,000 – the lowest since March 2014. Queens StreetEasy’s Rent Index fell 8.6%, which was the largest annual drop recorded in the township, matching the decline seen in Brooklyn. Wu says this is a remarkable milestone for Queens, given how its more affordable prices have kept its market relatively stable compared to Manhattan and Brooklyn.
Look at everyone StreetEasy Market Reports for Manhattan, Brooklyn and Queens, with additional neighborhood data and graphs. Definitions of StreetEasy’s metrics and monthly data from each report can be researched and downloaded using the StreetEasy Data Dashboard.