Rental Competition Heats Up in Queens and Brooklyn, with Manhattan Maintaining Its Edge
Over the course of the summer of 2024, viewed as the peak rental season, Queens and Brooklyn each experienced sharp increases in competition among renters compared to the same time in 2023, while Manhattan maintained a high degree of such competition, according to a Rental Competitiveness Report by the real estate listing site RentCafe.
How Rental Competitiveness is Calculated
In the study, five relevant metrics in terms of rental competitiveness were applied to each city. These metrics were the number of days apartments were vacant and the percentage of apartments that were occupied by renters. The number of prospective renters competing for an apartment, the percentage of renters who renewed their leases and the share of new apartments completed recently. Based on the results from these metrics, a Rental Competitive Index score was calculated.
Manhattan: The Hottest Rental Market in NYC
Manhattan was determined to have the ninth-hottest rental market across the United States in the summer of 2024, with a Rental Competitive Index score of 82.2. This is reflective of how challenging it is to get a rental apartment there. With so few units available, competition is fierce for the few that do enter the market. Apartment hunters in Manhattan faced a 65.8% lease renewal rate as virtually no new units opened there recently, leading to a high occupancy rate of 95.4% in peak season, up from 94.7% last summer. The few vacant apartments there are typically leased within 37 days, with nine renters competing for each available unit on average.
Brooklyn and Queens: Not Far Behind Manhattan
Brooklyn is ranked right behind Manhattan in the Rental Index score, at 82 – the tenth-highest in the nation. This marks a huge year-over-year increase, up 10.3 points from 2023. While the amount of new apartments in Brooklyn ended up increasing by 0.75% over this period of time, there was still a 3.3% jump in tenants renewing their leases, from 66.2% last year to 69.5% this year. Consequently, less than 4% of apartments in this borough are available for prospective renters, with an average of 14 people competing for each unit.
Queens has seen the most significant boost in score among them, up 12.8 points from 58.7 in 2023 to 71.5 in 2024. The lease renewal rate has also gone up over this period of time, from 63.8% last year to 68.2% this year. That large increase has played a big part in apartments being highly sought after, with nine renters competing for each unit.
A Closer Look at the Factors Contributing to Competition
The notable increases in competitiveness across these boroughs and New York City as a whole can mainly be attributed to a combination of high lease renewal rates, limited new supply, and the city’s ongoing economic strength. While renters looking for more affordable options have been turning to Brooklyn and Queens more often, these areas have now become just as competitive as Manhattan.
National Trends
Based on the study’s results, the national Rental Competitive Index score was 75.8. The average number of days that rentals were vacant increased from 37 last year to 39 this year, causing the average number of renters competing for each apartment to decrease from 10 to 9.
Conclusion
In conclusion, the data from RentCafe indicates that the rental market in New York City, particularly in Manhattan, Brooklyn, and Queens, is becoming increasingly competitive. With high lease renewal rates, limited new supply, and the city’s ongoing economic strength, these areas are becoming more appealing to renters. As the rental market continues to shift, it’s essential to understand the factors contributing to competition and plan accordingly for prospective renters.
FAQs
Q: What is the Rental Competitive Index score and how is it calculated?
A: The Rental Competitive Index score is a numerical value that measures the rental market’s competitiveness in different cities. It is calculated by applying five relevant metrics, including the number of days apartments are vacant and the percentage of apartments that are occupied by renters.
Q: What are the five relevant metrics used to calculate the Rental Competitive Index score?
A: The five metrics used to calculate the Rental Competitive Index score include the number of days apartments are vacant, the percentage of apartments that are occupied by renters, the number of prospective renters competing for an apartment, the percentage of renters who renewed their leases, and the share of new apartments completed recently.
Q: What is the main factor contributing to the growing competition in the rental market?
A: The main factor contributing to the growing competition in the rental market is a combination of high lease renewal rates, limited new supply, and the city’s ongoing economic strength.
Q: How does Brooklyn rank in terms of the Rental Competitive Index score?
A: Brooklyn ranks as the tenth-hottest rental market in the nation, with a Rental Competitive Index score of 82, just behind Manhattan with a score of 82.2.
