Market Research Report: New York City – Q3 2018

Low unemployment and consistent job growth are boosting apartment demand. A broad base of high-wage industries and more than 8.5 million residents are driving significant net absorption of apartments, particularly as single-family homes remain out of reach for many would-be buyers. As the pace of construction soared, net absorption outpaced new supply every year since 2012, fostering a metrowide vacancy rate that reached 2 percent by the end of 2017. This year, development with contract moderately following the cycle high reached in 2017, providing a tailwind to the overall market.

However, the exceptional growth in supply has weighed on overall gains in the average effective rent as operators throughout the city opted to provide a heavier slate of incentives to draw renters and fill new buildings. As the year progresses and the market continues to tighten, the sentiment around incentives should moderate somewhat, providing an improvement to NOIs.

Download