MARKETS & TRENDS
Manhattan: At a Crossroads
MANHATTAN RENT GROWTH BY ASSET CLASS (Sequential 3 month, year-over-year)
SOURCE: YARDI MATRIX
A LOOK AT REAL ESTATE TRENDS IN THIS TRENDY METRO.
by Yardi Matrix
T he new statewide rent regulations of summer 2019 shook investors and raised more questions about New York City’s proverbial housing crisis. Nonetheless, Manhattan’s multifamily sector is on an upswing. The borough’s year-over-year rent growth as of August sur- passed the U.S. figure for the first time in many years. Meanwhile, at 98.5 percent as of July, occupancy in stabilized assets remained flat over 12 months. New York City gained 111,500 jobs in the 12 months ending in June, with education and health services accounting for nearly two-thirds of this total. While em- ployment growth lagged national figures for the past two years, it marked a 1.5 percent expansion, just 20 basis points below the national growth rate. Although domestic migration is not favoring expen- sive gateway metros at this stage in the cycle, and in
fact Manhattan gained just 75,000 residents between 2010 and 2017—a 4.8 percent uptick that was below the 5.3 percent U.S. figure—adding 2,600 people in 2017, it remains a prime destination for international migration. It is also the country’s preferred location, by far, for both domestic and cross-border capital, including real estate investment and development. RENT TRENDS With the metro area’s housing crisis deepening, Man- hattan’s median home value surpassed the $1 million mark last year, representing a 44 percent hike since 2009. Renting and owning are nearly equally unafford- able: In 2018, the average mortgage payment accounted for 58 percent of the area median income, while the
average rent equated to as much as 60 percent. Costs are on the rise in the borough, and there’s little re- lief in sight for the affordability crisis. According to Freddie
Mac research, Greater New York’s number of multifamily units considered affordable to very low-income households dropped by 5.6 percent between 2010 and 2017.
12 think realty housing news report
december 2019 13
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