New York Apartment Fundamentals Hold Strong, Despite Demand Loss
As apartment demand normalizes nationwide, some markets are seeing notable rebounds in absorption activity. The nation’s largest apartment market, however, is not one of them. New York suffered net move-outs from roughly 10,600 units in the year-ending 3rd quarter, according to data from RealPage Market Analytics. This was the worst performance nationwide and was twice as deep as the loss seen in second worst Los Angeles (-5,200 units). At the same time, new apartment supply in New York has been sizable, with roughly 12,200 units completed in the past year. That’s one of the largest tallies nationwide, but only swelled the large existing base by a mild 0.6%. Despite New York’s recent demand struggles, however, the market is historically one of the strongest nationwide, propped up by its reputation as a cultural, commercial and financial hub. In fact, New York is generally in a league all its own. Despite recent demand loss, apartment occupancy in New York hit 97% in September, the best showing among the nation’s largest 50 markets. As a result, apartment operators are still pushing rents, and the most recent annual increase of 1.7% holds a lot of weight for the nation’s most expensive apartments, with an average monthly price of about $4,500 in September.