Looking past this summer’s new statewide rent regulations that managed to shake investors and raise more questions about the city’s proverbial housing crisis, Manhattan’s multifamily sector is on an upswing. The borough’s year-over-year rent growth as of August surpassed the U.S. figure for the first time in many years. Meanwhile, at 98.5 percent as of July, occupancy in stabilized assets remained flat over 12 months.
New York City gained 111,500 jobs in the 12 months ending in June, with education and health services accounting for nearly two-thirds of this total. While developing at a slower pace than late-cycle bloomers such as Austin, Phoenix or Las Vegas, New York remains one of the country’s top economic engines, as well as a primary destination for international migration and the main target for institutional and cross-border capital.
The borough had some 8,200 units underway as of August, with almost 1,400 apartments completed in the first eight months of the year. Meanwhile, the multifamily transaction volume dropped across the city, partially due to investors’ precaution following the latest statewide rent regulations. Considering the relative balance between supply and demand, as well as the metro’s affordability issues, we expect rent growth to slightly dampen across New York City by year-end, falling behind the U.S. average.