Why NYC Rent Prices Are Still So High, Even Though The Market Is Trending Down
After the sudden upheaval of the COVID-19 pandemic, skyrocketing demand for apartments, and the impacts of inflation, rent rates reached historic highs across the United States in 2022. Now, that boom is finally beginning to fizzle. According to a report by Apartments.com via Business Wire, the fourth quarter of 2022 saw a 0.4% decrease in rent prices nationally, and experts expect the trend to continue and prices to drop significantly as demand wavers and supply increases.
If you live or are looking to move to New York City, however, you may not be so lucky. This cultural capital is the most expensive place to rent in the entire country, coming in with an average rate of over $6,000 per month in 2022 (via Rent.com). According to a report by CNBC, this number one position isn't expected to decrease anytime soon, and certain factors will continue to contribute to the city's astronomical housing prices, despite an overall shift in the market.
Why are prices staying so high?
The answer is simple: Supply and demand. According to a report from CNBC, the supply of affordable apartments in New York City is still lagging behind the rest of the country, keeping the city in a near-constant seller's market. "There is little sign that we're going to get easing, at least in inventory, anytime soon, which of course, means that prices are unlikely to drop substantially for at least maybe six months," says CNBC wealth editor Robert Frank.
Landlords across the city have increased rent by about 20% from prices in 2020 and 2021, and high rent rates in Manhattan are beginning to price out younger residents that simply can't afford to live there anymore. New leases have dropped 39% in November 2022, the biggest decrease since the pandemic, as people are forced to downsize or move out of the city entirely. Until supply finally catches up and outpaces demand, as is the case in the rest of the country, it's unlikely that the astronomically high rent rates will see any slowing in the most populous city in the country.