Like most coastal markets, the beginning of the pandemic translated into sharp rent declines across New York City boroughs. Rent development, however, started gaining ground after hitting bottom in October 2020. As of March, Brooklyn rents were up 0.3 percent on a trailing three-month (T3) basis, with the average at $2,637. Year-over-year, Brooklyn rates were still down 10.5 percent as of March, but recent activity points to more steady improvement. Meanwhile, occupancy in stabilized communities dropped 100 basis points over 12 months, to 97.8 percent as of February.
New York City employment contracted by more than 750,000 positions last year, representing an 11.4 percent drop, with all sectors losing jobs. As with most U.S. metros, coronavirus restrictions and anxiety resulted in sharp declines for the leisure and hospitality sector, which shed nearly 300,000 positions. Meanwhile, the unemployment rate for the New York City MSA hovered close to the 10 percent mark for the better part of the past six months.
The number of completed units in the 12 months ending in March dropped 35.3 percent to 2,914 from the previous 12 months, marking a four-year low. Going forward, rent expansion remains the silver lining, with this year slated to erase some of the contractions caused by the health crisis: Yardi Matrix expects the overall average New York City rent to advance 2.2 percent in 2021.