What Can We Expect from the NYC Rental Market in 2023?

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2022 was a turbulent year for the New York City rental market. Following the departure of many renters in the immediate 2021 post-COVID-19 world, demand for rentals surged as people returned to the city for work. However, will this trend continue into 2023, or will rental demand and prices decrease? This is a key question for organizations looking to relocate employees to the “city that never sleeps.”

Employees and organizations need to understand the best time of year to rent, average rental costs, and future market projections in NYC. According to StreetEasy, in 2023, “NYC renters are still faced with historically high market rents and fierce competition,” despite a plateau in rent growth. As of 2021 statistics, NYC renters are already “spending more than half their income just on rent,” according to economist Kenny Lee from StreetEasy.

When Is the Best Time to Rent in NYC?

Renting in NYC depends heavily on the season, with prices fluctuating based on demand. The best time to look for an apartment in NYC is typically during the off-season months, from November to March, according to a survey conducted by Renthop. In contrast, the worst time to search is during the peak season, from May to September.

One reason November to March is the best time to rent is the colder temperatures, which lead to lower demand. During these months, lease terms can be more flexible, and price negotiations are often easier. There is an estimated “5.4 percent difference in rent between peak season and off-season, which equates to around $171,” according to Boom.

Current NYC Rental Costs and Inventory

COVID-19 significantly impacted housing markets worldwide, and NYC was no exception. According to Quartz, NYC’s rental inventory “peaked in August 2020,” but as of December 2022, inventory had decreased by 66 percent. This means renters had three times the options in 2020 compared to today.

As of January 2023, the average cost of renting a studio apartment in NYC is $3,200, while a one-bedroom apartment averages $3,725, according to Zillow. Additionally, even in the off-season, there are only 13,626 available rentals, highlighting the competitive nature of the NYC market.

Why Are Studio and One-Bedroom Apartments in High Demand?

Many New Yorkers prioritize privacy, especially those working from home in a post-pandemic world. Sharing an apartment with roommates presents challenges, and many renters prefer to have their own space for work and personal life.

StreetEasy estimates that New Yorkers could save approximately $14,900 per year by sharing a two-bedroom apartment. However, due to an increased desire for privacy, studio and one-bedroom apartments remain the most sought-after rental units.

What to Expect from NYC’s Rental Market in the Coming Years

Due to inventory shortages, many developers are holding back on new construction projects. However, data from the NYC Department of City Planning shows that developers were issued 58,623 permits for new housing units in the first half of 2022. This suggests that there will be a rise in market-rate rental options in the coming years, which could help stabilize rental prices.

Planning to Relocate Employees to NYC? We Can Help.

For those looking to relocate employees to NYC, here are key takeaways:

• The best time to rent is from November to March when demand is lower.
• Renting during peak season offers more options but comes with higher costs.
• Rental prices are slowly decreasing, but limited inventory means high competition.
• Studio and one-bedroom apartments remain in high demand due to a growing preference for privacy.
• More market-rate rental options are expected in the coming years as developers move forward with new projects.

We provide comprehensive relocation services to help you and your employees navigate the evolving NYC rental market. Contact us today to learn how we can support your transition and make the relocation process smoother.

About Dwellworks 

Dwellworks is the world’s largest provider of destination-related services and temporary living solutions for the globally mobile workforce and business travelers. We provide business-to-business solutions for Fortune 1000 and emerging companies directly and through their relocation management partners. Whether a company needs to relocate its employees across the country or around the world, we provide a range of support services to help employees and their families transition successfully from their home location to a new destination.   

Dwellworks supports the diversity of our clients’ globally mobile workforce with personalized destination solutions in 16 countries, covering hundreds of major relocation markets. Dwellworks Living, our global furnished temporary living solution, offers corporate housing accommodations for relocation and business travel customers in 125 countries. Our full-service real estate brokerage, Station Cities, supports home rentals, sales, and purchases in the Tri-State New York area and Chicago. Visit our homepage, learn about our services, and read our blogs to learn how we can help with your relocation and business travel needs.