2022 was a turbulent year for the New York City rental market. This is following the departure of many renters in the immediate 2021 post-COVID-19 world, with a high demand for rentals returning as NYC renters moved back and began working in the city. However, will this continue into the 2023 rental market, or will demand for rentals decrease along with prices? This is a key factor for those looking to relocate their employees in 2023 to the “city that never sleeps.”
Employees and organizations need to know when the best time of year is to rent, what average rental costs are, and projections of future markets in the Big Apple. According to StreetEasy, in 2023, potential “NYC renters are still faced with historically high market rents and fierce competition,” even though there has been a plateau in rent growth. As of 2021 statistics, NYC renters are already “spending more than half their income just on rent,” according to economist Kenny Lee from StreetEasy.
New Yorkers will likely see a slight dip in rents but no deep discounts after record-high rent inflation in 2022. However, there are other factors to consider other than price. Regardless of cost, inventory demand, time of year, or future projections, CORT Destination Services offers support and helps make transitions easier and less stressful for everyone involved.
When Is Typically the Best Time to Rent in NYC?
Renting in NYC depends heavily upon the season, and prices during different times of the year can be decidedly different, from bargain prices to over-inflated rents. The best time of year “to look for an apartment in NYC is during the off-season months, namely from November to March,” according to a survey conducted by Renthop. In other words, this means that now is likely the best time to relocate and rent. On the other hand, “the worst time to look is during the peak season months, which is from May to September.”
One of the primary reasons November to March is the best time to look is because of the average temperature in New York. Simply put, people aren’t looking to rent as much during freezing and chilly temperatures. The average temperature in NYC from November to March ranges from 27 degrees to 49 degrees Fahrenheit. During the off-season, lease terms can be much more flexible and negotiations for price much simpler. There is a “5.4 percent difference in rent between peak season and off-season, which equates to around $171,” according to Boom.
May to September is a different story. The weather is warmer, and the NYC rental market also becomes infused with recent college grads and the influx of new students looking for affordable off-campus housing. However, there are pros to renting during these months. Some of these pros are:
- A larger rental pool to choose from along with new units.
- Easier to find a roommate.
- Negotiating rental terms with landlords is still possible.
But what about April and October? These are considered transitional months, where rental trends either shift up or downward, depending on the season.
Whether it’s during the off-season, peak season, or during transitional periods, CORT Destination Services is there to support you. We offer a suite of services designed to help you and your clients plan their move, find the right place, and get settled in easily.
What Are the Current Average Rental Costs and Inventory?
COVID-19 shook housing markets across the globe, and it was particularly felt in NYC. When it comes to rental inventory, “[it] reached its pandemic peak in August 2020. From that point, inventory is down 66 percent as of December 2022. That means renters used to have three times the options in 2020 compared to now,” in an article according to Quartz. NYC is undoubtedly one of the more competitive rental markets in the country, and “NYC renters are still faced with historically high market rents and fierce competition,” says StreetEasy.
StreetEasy has more to say about the 2023 NYC rental market: “Asking rents rose to an unsustainable level relative to New Yorkers’ earned wages over the summer . Adjusting for inflation, just under half (48.2 percent) of NYC’s workforce could afford just 10 percent of the rental inventory available this summer, unless they spent more than half of their income on rent. Due to the higher cost of renting and elevated inflation, renter demand will continue to cool in 2023, pushing down asking rents. This relief in rent prices, however, will be slow to come by due to limited inventory of rental units.”
When it comes to cost, both studio apartment and one-bedroom apartment rental prices have decreased, and the total cost is currently $3,200 and $3,725 respectively as of January 2023, according to Zillow.
Also, there are very limited rentals per Zillow, even though we’re in the off-season, with only 13,626 rentals available. For a sizable company looking to relocate, this can be a barrier.
Why Are Studio and One-bedroom Apartments in the Highest Demand?
While many people went back to the office in a post-COVID-19 world, many others also continued working from home, either as a hybrid position or went to work from home permanently. Working from home can certainly present challenges if there’s a lack of privacy and simply put, New Yorkers don’t want roommates. Not only are they concerned about health and safety in our post-pandemic society, but they also want their own space. As StreetEasy puts it, “The opportunity cost of privacy is substantial.”
Based on October 2022 statistics, potential renters could save approximately $14,900 per year if they shared space with a roommate in a two-bedroom apartment. In short, StreetEasy says, “New Yorkers’ willingness to pay at least $14,900 in additional rent each year reflects an increased desire for personal space as more people work from home.” Because of the increased demand for privacy, studio and one-bedroom NYC rentals are the most highly sought-after. No matter what rental situation is best for you, CORT’s Destination Services can offer comprehensive support, whether your assignee is searching for rentals with the plans to get a roommate, needs privacy, or they’re looking for family-friendly rentals.
What Can Be Expected from Rental Inventory in the Years to Come?
Because of the rental inventory shortage, “Many developers are waiting to take action on new construction projects,” according to Kenny Lee of StreetEasy. He goes on to say, “Based on NYC Department of City Planning data, developers were issued 58,623 permits for new homes during the first half of this year,” which means there could be quite an increase in market-rate rentals in the years to come. A solid forecast of a building market makes it simpler for RMCs and organizations to make choices and plan relocation efforts.
Moving Assignee’s to NYC? Call CORT Destination Services.
If you’re helping a corporate client relocate their employees to NYC, there are a few key takeaways when it comes to relocation in 2023. First, keep in mind that the most cost-effective time to rent is now, during the November to March offseason. However, renting during peak season still has its perks, such as more inventory to choose from.
Inventory is low, however, prices for rentals are slowly decreasing. But with continued inflation, for the time being, they will remain at a higher rate than normal. Rentals in highest demand are studios and one-bedroom apartments because of the increasing need for privacy. If you’re not looking to relocate immediately, the forecast of market-rate rentals is promising with the number of building permits received by developers in 2022.
CORT Destination Services can assist you with helping your clients navigate the new and changing NYC rental markets post-pandemic by providing support services to help streamline the relocation process.
We want to help get you and your clients started in the right place. This is why your client will be paired with an experienced member of the CORT Destination Services and the CORT Global Network team, who can save you both time and money while navigating the competitive markets in NYC.