McLoyd first started seeing bidding wars in the summer of 2021. Renters who fled the city started coming back and looking for comfortable spaces that would accommodate a different standard of living, and they were willing to pay more. It was surprising for him but also for potential renters. He proceeded to draft an email template for anyone submitting inquiries, which explained the process of bidding.
He encourages renters to send in their highest offer. McLoyd stresses that it’s not an auction and he doesn’t publicize other people’s bids, but a better offer does tend to win out in the current market. And it’s not just about the amount people are willing to pay: applicants with no credit score, out-of-state guarantors or insufficient combined income often face a harder time. McLoyd encourages potential renters who can to wait until spring to avoid the current market.
Low vacancy rates have led to a rapid drop in listing inventory and to record prices, according to brokerage Douglas Elliman Real Estate. Manhattan median rent jumped 18.3% in January from a year earlier to $3,550, according to a report by appraiser Miller Samuel Inc. and Douglas Elliman. That’s just shy of the median rent of $3,595 reached in January 2020, before the pandemic exodus sent rates sliding.
Meanwhile, renters returning to Manhattan are signing leases at a record rate, helping to populate the mountain of vacant apartments left behind during the pandemic. In January, the supply of available apartments tumbled 83.3% from a year earlier, according to Douglas Elliman.
Brooklyn, a borough where New Yorkers have historically been able to find more space, has seen its listing inventory fall year over year by 86.4%, the highest rate on record, according to Douglas Elliman. Meanwhile, new lease signings rose to the second-highest January level since tracking began in 2008. In Northwest Queens, across the East River from Manhattan, inventory fell by 90.6% year over year.
“It just really highlights how trapped people are in the city,” said Erin Evers, a staff attorney in the housing unit of Legal Services NYC. “How are people going to be able to continue to live in New York City?”
Other than rent-stabilized, regulated apartments, New York doesn’t have have any legal protections in place that would restrict rental bidding wars, Evers said. The current market conditions could push middle- and low-income workers further out of the city, at a time when New York’s economy is trying to rebound from the pandemic. Just this week, Mayor Eric Adams told leaders of major companies it was time to get their workers back in offices.
“Every day we get closer to fully reopening New York City, but we want to bring the city back in a way that works for everyone,” Adams said in a statement. “My administration will continue working hard to ensure New Yorkers, and those who want to become New Yorkers, can afford to live here.”
To be sure, not all apartments are flying off the shelves. Potential tenants in New York City have different needs in the post-pandemic world. Those include outdoor space, good lighting, big rooms, extra space for home offices, and renovated amenities. Apartments that offer any of these features see inquiries flood in.
“There’s a major demand for larger spaces,” said Scott Sternberg, a broker for Corcoran. “People are looking for more space or outdoor space and especially apartments that are carefully renovated are properties that are speaking to them.”