The pandemic started taking a heavy toll on New York’s economy—and rental market—soon after the coronavirus arrived in the U.S. As of July, Queens rents were down 0.8 percent on a trailing three-month basis, well below the -0.1 percent U.S. figure. Lifestyle rates slid 1.8 percent, as the pandemic pushed renters to leave the city or search for more affordable options, forcing landlords to offer concessions.
As the health crisis turned the metro into a global epicenter in April, unemployment skyrocketed. The jobless rate in the New York-Northern New Jersey-Long Island area jumped from 3.8 percent in March to 17.0 percent in June, according to preliminary data from the U.S. Bureau of Labor Statistics. Job losses were widespread, with leisure and hospitality shedding 455,700 positions for a 64 percent contraction in the 12 months ending in May. At the end of June, the economy slowly started its long road to recovery, and, as of July 20 all of New York’s 10 regions were in the final reopening phase.
Following last year’s 4,059-unit cycle peak for completions, developers added only 742 units to the borough’s inventory this year through July, with an additional 8,075 apartments underway. At the same time, transaction activity dampened significantly. Considering the slump in investor confidence, and the typical pause in transaction activity that usually occurs ahead of presidential elections, deal volume could remain low for a while.