The new rules come just after the number of new leases rose to 5,641 in October, a 12% gain from the previous month and a 33% jump from the year before, making for the highest reading since the depths of the 2008 financial crisis, according to a report from Douglas Elliman.
“The market is finally to the point where it's starting to draw inbound activity instead of outbound,” said Jonathan Miller, CEO of the New York-based real estate appraisal and consulting firm Miller Samuel. “Every time there's a lockdown, it just pushes recovery further out.”
Indeed, the September vacancy rate of 6.14% was up from 2.03% a year ago, reflecting the toll exacted by months of business restrictions and social-distancing requirements in the most densely populated large U.S. city.
And this week, New York Gov. Andrew Cuomo began rolling back the state's COVID-19 reopenings as the number of new daily infections in the state climbed above 4,800, reaching its highest level since April.
New restrictions, which began on Friday evening, demand that gyms and establishments operating under a state liquor license must close by 10 p.m.
Indoor gatherings must be limited to no more than 10 people, and New York City Mayor Bill de Blasio has warned that schools may close as soon as Monday.
Such measures are likely to keep potential renters out of the city since work-from-home options during the pandemic have given workers the option of living in the more socially distanced suburbs or even out of state.
The sharp drop in prices and three consecutive months of record concessions that landlords offered to counter those trends had just begun luring renters back.
Median net effective prices for studio apartments in Manhattan are down a record 22% while one-bedroom pricing is off 19% after owners extended 2.1 months of concessions, the highest of all time.
Overall, the median net effective rent in Manhattan was $2,868 per month, down 16% from last year.
Miller believes the Manhattan market still has “more weakness ahead,” but says the rate of decline may be slowing, barring new lockdowns.
While the Brooklyn rental market has also set a number of records in terms of weakness, its prices have held up better than those in Manhattan, with net effective rent down just 4.9% year-over-year to $2,764.
Renters seeking the deepest discounts should look to Northwest Queens, a short subway ride from Manhattan. That market is seeing weakness like the rest of the city, but hasn’t yet experienced a flurry of new lease signings.
A COVID-19 vaccine, whose development appears to be closer after optimistic data on trials from Pfizer and partner BioNTech this week, will put the New York City rental market back on a path to recovery, but even then, landlords will need to be patient, according to Miller.
“We're talking about a few years for a market recovery, because even if the pandemic is under control or eradicated, the economic damage is still there and has to be corrected,” he said. “I think that's going to take some time.”