After a sharp drop and a swift recovery, New York City multifamily is now looking ahead toward more sustainable levels of growth. Hit by a double whammy of seasonal deceleration and inflation woes, the market is slowing down though not dramatically. Manhattan rents were flat on a trailing three-month basis as of November, at $4,504, while the U.S. average dropped 10 basis points, to $1,719. The borough’s occupancy growth has also slowed significantly, at just 20 basis points in the 12 months ending in October.
Despite a slower start, New York City’s economic recovery remained in full swing. The metro added 359,200 jobs in the 12 months ending in September 2022, with all but one sector gaining positions. That accounted for a 5.8% rise, outperforming the national rate of growth. Professional and business services (83,200 jobs), leisure and hospitality (81,600) and education and health services drove growth, while construction contracted by 400 jobs. Meanwhile, the unemployment rate dropped to 4.1% as of October 2022, above the state but trailing the national figure.
Nearly $3.9 billion in multifamily assets traded in Manhattan in the first 11 months of 2022, marking the strongest year for deals since 2016. Meanwhile, the borough’s pipeline slowed down, as Manhattan had 7,528 apartments under construction, with only 1,529 of them in projects that kicked off in 2022.
Read the full Matrix Multifamily Manhattan Report-January 2023