- Pandemic-era rent concessions in big cities have dried up, and new lease signings are up anyway.
- The 30 largest cities in the US all saw huge spikes in rental activity in the first half of 2021.
- Returning workers in cities like NYC and Seattle are struggling to land apartments.
Michelle Rodriguez is a New York City lawyer — but she’s been riding out the pandemic with friends and family in Washington, DC.
This fall, Rodriguez is moving back to work out of her law firm’s Bryant Park office in Manhattan.
She originally thought that finding an apartment to move into around Labor Day wouldn’t be too difficult. She figured she would find slashed rent prices and other coronavirus-induced concessions that would make fulfilling her wish list (a one-bedroom with natural light and an in-unit dishwasher) simple.
By July, she heard rumblings that the Manhattan rental market was bouncing back. Rodriguez told Insider that was when she started “neurotically perusing StreetEasy,” the NYC-specific real-estate-listing platform owned by Zillow.
Her hunch was right: By the middle of the summer, landlords were retiring concessions and raising prices. Workers are pouring back into coastal hubs and sparking competition so fierce that it’s more difficult than ever for anyone to land their dream digs in cities like New York and Seattle.
In the first half of 2021, rental applications in the country’s 30 largest cities all spiked, some even surpassing pre-pandemic levels, according to new RentCafé research. NYC led the resurgence, with double the renter activity compared with last year and the highest number of renters moving in. San Francisco had the second-highest increase in inbound renters, while Seattle had the third.
The study found that younger renters between the ages of 20 and 50 were making up the bulk of new activity in these locales. It specifically singled out Gen Z renters in their early 20s entering the market for the first time, as well as high-earning millennials and Gen Xers in their 30s and 40s boomeranging back to the cities they worked in before the pandemic hit. It’s a champagne problem: Young, highly paid Americans are pouring back into urban cores and fighting over luxury apartments.
Renting in New York feels just as cutthroat as ever
Rodriguez, a 28-year-old high earner, realized others like her were affecting her apartment search: Barely any of the available Manhattan listings on StreetEasy fit her vision — and the ones that did were disappearing quickly.
StreetEasy said it saw activity that far exceeded pre-pandemic levels in July. Compared with July 2019, the platform saw 59% more visitors, 63% more rental-listing views, and 76% more inquiries on rental listings.
And since it’s a terrible time to buy, most people are looking to lease. New leases in Manhattan were up 54.7% in July compared with July 2020, according to a report from the appraisal firm Miller Samuel and the brokerage Douglas Elliman. There were more new leases signed in July than in any other July since at least 2008. At the same time, the number of rentals offering incentives tumbled to 39%, far below October’s peak of 60%. Prospective big-city renters don’t need coaxing anymore.
Landlords are “trying to make up for time and money lost during the pandemic’s lull by raising prices and erasing discounts,” Nancy Wu, a StreetEasy economist, said. Renters are returning “in full force,” she added.
Everywhere you look, that seems to be true. One viral TikTok video posted in July featured one $5,250 three-bedroom, two-bathroom listing in the East Village neighborhood of Manhattan, which then had a rent increase of $1,500 “due to the enormous amount of interest” in the unit. Another featured a line 80 people to view a $2,950 two-bedroom unit in the Chelsea neighborhood.
“You’re seeing people sometimes getting in bidding wars,” Gary Malin, the chief operating officer of the brokerage Corcoran Group, recently told Bloomberg. “You’re seeing people have rents changed on them right away. You’re seeing apartments rented before they even show up at the appointment.”
Rodriguez was fearful of having to resort to her most recent NYC living situation — sharing a Lower East Side apartment with roommates in a flex bedroom. Instead, she widened her search from Manhattan to Brooklyn and then did exactly what Malin said: put in an application on an apartment before even going to a viewing. It didn’t even matter that the unit was almost $1,000 more than she anticipated spending in monthly rent.
“I know I had an easier time than most,” Rodriguez said, even though she ultimately settled for a one-bedroom apartment that didn’t have a dishwasher (her dream amenity) and was in Brooklyn (a borough she initially wasn’t interested in).
Other major cities are heating up, too. Consider Seattle.
New York is far from alone in seeing an uptick in renter activity. Seattle had 54% more rental activity in the first half of 2021 than it did in the first half of 2020, according to the RentCafé study.
There were also scores of renters relocating to Seattle from different cities — 69% more than in 2020, to be exact.
Occupancy rates and rent prices both hit a record high in July after cratering in the middle of 2020, according to a separate Downtown Seattle Association report.
In July, there were about 52,400 occupied apartment units in Seattle, beating out the previous record of about 51,100 occupied units set just before the outset of the pandemic. Average asking rents also hit a high of more than $2,220 in July, slightly up from the high of $2,207 recorded in the first quarter of 2020.
Commercial Analytics found that the vacancy rate in Seattle sat at just 3.2% earlier this summer, meaning that occupancy rates weren’t just higher than normal — local apartment inventory was tight.
Brian O’Connor, a Commercial Analytics cofounder, said the crunch would push rents even higher. Pandemic-era concessions hardly exist anymore.
Angel Burford, a millennial who works at a local tech startup, told Insider she and her husband took advantage of those concessions in February. They upgraded from a one-bedroom to a two-bedroom with amenities like floor-to-ceiling windows, hardwood floors, and office space as they both worked from home.
“I was able to negotiate a 17-month lease with three months free on an apartment that was being advertised as $3,000,” which brought the monthly rent down to about $2,500, Burford said. Now, a similar unit to hers is on the market for $3,600 a month.
“I have friends who are looking for just a one-bedroom or studio in nice or newer buildings, and they can’t find anything under $3,000 right now,” she said. Burford said she felt lucky about her situation and was trying to help those relocating friends by scouring Craigslist and other listing sites and even visiting apartments for them.
Apartment hunters on a budget could continue to struggle. Developers aren’t keen to start construction on new apartment buildings because of remaining eviction moratoriums, which affects profitability for developers and affordability for renters, O’Connor said.
O’Connor told the Puget Sound Business Journal that the stall in building, coupled with the surge in demand, created a situation comparable to shaking up a bottle of soda. Once the cap comes off, he said, “boom, rents are really going to pop.”
Jon Scholes, the president of the Downtown Seattle Association, said he wasn’t surprised by the city’s recent resurgence. He said that he was under no illusion that “everybody will be back in the office five days a week” but that rising prices and the sheer number of people flocking back proved the everlasting allure of walkable city centers.
The RentCafé analysis found that Scholes was likely right — apartments in similar cities like San Francisco, Chicago, and Philadelphia are welcoming way more new residents in 2021 than they were in 2020.
Do you have a story to share about your own apartment search or returning to a big city? Contact this reporter by emailing [email protected]