- Neighborhood Options-There are so many neighborhood options in the rental market that have gained traction. From Bed-Stuy and Bushwick, to Crown Heights and Greenpoint. While outside of Brooklyn, Jackson Heights, Long Island City and Jersey City have become increasingly popular options.
- Increase of Supply- Over 11,000 new apartments hit the market last year and another 13,000 are expected this year. When rents climbed in the years after the last recession, there were very few options for new rentals in the market. On the high-end of rentals, a lot of new product that was marked for condos changed to rentals with the softness in the luxury sales market.
- New York City Unemployment- As rents climbed each year after the last financial crisis, the New York City unemployment rate continued to decrease. According to the New York City Department of Labor, the seasonally adjusted unemployment rate decreased every year from 2012 to 2015, but in 2016 this rate was flat. Job transfers to NYC and people moving from other cities used to be a frequent occurrence, but this type of renter is uncommon these days.
When does this end?
Not anytime soon. Interest rates would have to rise by more than a few increases to swing more potential buyers back to the rental market. More rental supply will be common throughout 2017. Since 421-A (a program that reduced property taxes for developers) expired in January 2016, new rental development has been stopped, but it will take a few years until this is felt in the market.
