A Look at the Tightest Apartment Market in the US
It has recovered jobs lost since the pandemic and 22.4% of the population is between 20 and 34 years old.
So, there are plenty of people who want to live in apartments and work in New York City.
A metropolitan area in oft-reported decline due to housing costs, crime and the work-from-home phenomenon since the pandemic, the Big Apple has recovered its jobs lost and over the past five years, and demand has exceeded new supply (51,242 units to 46,682 units), according to an analysis by RealPage.
Its population has fallen recently, sliding 1% from 2021 to 2022, according to the latest data from the US Census Bureau.
Still, New York-White Plains has a high concentration of young adults – demographics critical to apartment owners – with 22.4% of the population between 20 and 34 years old. That compares to the nationwide average of 20.4%, according to RealPage.
New York-White Plains is the largest metropolitan area in the nation with a population of nearly 10.8 million residents.
New York-White Plains also has the nation’s largest apartment market – dominated by high-rise residential buildings – with more than 1.9 million units.
New York added nearly 47,000 new apartment units in the last five years, according to data from RealPage Market Analytics. Given New York’s high existing unit count, all those new units only increased inventory about 2%, well below the national average of 10%.
In a short-term reversal, supply in New York is currently outpacing demand, as the market recorded absorption of just 183 units in 2023.
Only New York and Chicago have seen five-year demand exceed five-year supply, with New York outperforming Chicago by a wide margin.
Rent growth, too, has been trending lower over the past year or so but remained above the US averages. In February, effective asking rents in New York rose 2.1%, well above the national average of 0.2% and ranking #14 among the 50 largest markets.
As for its economy and jobs, New York consists of long-term structural drivers.
“Although considered to be the world’s preeminent financial center, the metro’s largest employment sectors include Education/Health Services, Professional/Business Services, Government and Trade,” writes RealPage’s Charlotte Wheeler.
New York leads the nation with 47 Fortune 500 company headquarters, the largest (in terms of revenue) being JPMorgan Chase, Verizon Communications, Citigroup, Pfizer, PepsiCo, MetLife, and Goldman Sachs Group.
Its current employment base is now approximately 179,000 jobs, or 2.5%, above the pre-pandemic level from February 2020.
Net Lease Spring:
Held April 16-17 in NYC, Net Lease Spring will bring together hundreds of dealmakers from the nation’s top firms. This year’s program will feature 5.5 hours of face-to-face networking and over 5 hours of content focused on micro and macro trends for 2024, being resilient through market volatility, how to serve your corporate tenant clients and much more! Learn more or register here.
Multifamily Spring:
Multifamily Spring is coming to New York City this April 18. This year’s program will bring together the industry’s most influential and knowledgeable real estate executives from the multifamily sector for 5 hours of face-to-face networking and over 5.5 hours of can’t miss sessions. Learn more or register here.