Finding a house to rent in New York City has always been a stressful task, especially now that the city is experiencing a moment of rebirth and repopulation. In fact, during the pandemic, many New Yorkers moved, in search of more space, to other states, their second or parent’s homes.
Let’s look at the numbers; there were 4,395 New Lease Signings in Manhattan by the end of October -22.1% in comparison to the same period last year, falling to their lowest level in a year. But the fact that there have been fewer rental contracts than last year doesn’t mean that there is less demand. On the contrary, in this case, it is a sign of recovery and a problematic shortage of supply.
The indicators show us that although the number of contracts has decreased, the price of rents has increased, the Net Effective Median Rent rose annually at the highest rate in a decade, increasing +17.9% year over year to $2,868, and yet a 0.8% below the same period two years ago before the pandemic, suggesting that the COVID discount for the overall market is nearly gone, as also shown by these others meaningful data: the Average Rental Price which went up +14.1% to 4,461; the Average per Square Foot Rent, at $70.62, up +15% from the last year; the percentage of apartments offered with some form of Concession, that was 31.5%, down -28.9% from the same period a year ago; and the listing discount which was 1.3%, down -3.6% from twelve months ago.
However, comparing today’s numbers to last year doesn’t give us a complete picture of the specific moment. For example, the Days on Market was at 63, 30 more than a year ago, but -13.7% down from September. Same fate for the Listing Inventory, down by -58.2% year over year with 11,794 properties on the market, but decreasing just a nominal 0.1% from the prior month. This indicates a substantial lack of supply, which has already begun and is likely to continue in the coming months.
Three studies show that Miami (and Florida) is on the Rise!
1. Miami Is the Top-Ranked City in the World For Luxury Home Price Increases In The Last Year
A new report from Knight Frank says that luxury home prices in Miami have risen faster than any other major city in the world over the past year. Miami saw luxury home prices surge 26.4% compared to last year and is growing at nearly triple the rate of the worldwide index. In fact, prices for the index as a whole were up 9.5% worldwide. The gains in Miami appear to be accelerating, with prices increasing at an even more rapid pace in the past few months. In the most recent quarter alone, prices have jumped 8.1%. It is the first time since Knight Frank created the index in 2007 that Miami sat at the top of the rankings.
2. Miami Leads the Nation In Pandemic Recovery Index
Miami is the top-ranked city in commercial real estate firm JLL’s City Recovery Index, which measures the amount of activity that has resumed since the pandemic, and Miami is listed at 97.8% recovered – higher than any other city. JLL’s recovery index uses metrics that include economics, employment, office occupancy, and mobility.
Here is some data:
The index states that leasing activity in Miami is actually above pre-pandemic levels and is currently at 114% of its 2019 rate. Travel to and from Miami is also higher, with TSA checkpoint traffic at 154% of pre-pandemic levels. Employment is still below what it was in 2019 but is now at 93% of its former rate. The vaccination rate in Miami is listed at 74%. At the same time, Florida currently has the lowest rate of Covid cases on a per-capita basis of any U.S. state.
3. Miami Among Fastest Growing Cities Nationwide For New Businesses
According to LinkedIn’s analysis, new company formation in the Miami area surged 45% during the pandemic. Miami now ranks second nationwide for new company formation. All three of the top cities are in Florida, with Orlando barely nudging out Miami for the top spot by 1%.
For the study, LinkedIn looked at company formation rates between the pre-pandemic (July 2018 to July 2019) and mid-pandemic (July 2020 to July 2021) periods to calculate each city’s growth rate.
The top industries for new companies formed in Miami were entertainment, finance, and manufacturing, LinkedIn said.