Q4 2022 Multifamily Real Estate Report: New York, NY
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Known as The Big Apple, New York City is one of the world’s major epicenters of commerce, entertainment, and opportunity.
The population of the city’s metro area reached 18,867,000 in 2022.
Unemployment rate for the city reached 5.1% in Q4 of 2022. This was a 2.4% decrease in unemployment from Q4 2021.
Despite quarterly volatility, New York’s multifamily real estate market remained generally healthy at the close of the year compared to Q4 2021.
General Area Overview & Demographics
New York City is one of the most densely populated cities in the United States. The largest ethnic group in New York City is Hispanic or Latino, making up 29.2% of the population. This is followed by White (non-Hispanic) at 22.5%, Black (non-Hispanic) at 21.5%, Asian at 17.6%, and Other at 7.2%. The city remains to be one of the most expensive to live and work in as of Q1 2023.
NYC Median Household Income & Population
Median household income in New York City is $63,373. The wealthiest 20% of households in New York City earn an average annual income of over $167,000 while the poorest 20% of households make an average of below $21,000 per year.
Over a quarter of the population in New York City is under the age of 18. A majority of New Yorkers also fall between the ages 25-44, making up 28% of the total population. Those aged 65 and above account for only 11.5% of New York City’s population.
New York City is home to some of the most prestigious universities in the world, such as Columbia University and New York University. In total, there are over 200 higher education institutions located throughout the city.
Some of New York’s most iconic attractions include the Empire State Building, Central Park, the Statue of Liberty, and Times Square. Other popular tourist destinations in the city are Broadway theater productions and museums like The Metropolitan Museum of Art and The Museum of Modern Art. The city is also home to many fine-dining restaurants and cultural experiences.
The city is known for its mild summers and cold winters, with average temperatures ranging from 20°F in the winter to 80°F in the summer. With an annual precipitation of over 47 inches, New Yorkers are accustomed to rain showers and occasional snowstorms.
Summary of New York Multifamily Real Estate Performance in Q4 2022
Vacancy rates for New York City multifamily sat at 2.4% in Q4 2022 and remained largely unchanged throughout the year. Net absorption remained positive at 26,268 units.
What are multifamily rents like in New York City?
Average asking rents for New York City multifamily saw a 3.7% increase year-over-year: Q4 2022 saw an average asking rent per unit of about $2,975, still burdening Americans living in the city.
This was a $4 average decrease from Q3 2022’s numbers.
Purchase & Leasing Activity
Sales volume for New York City multifamily reached $2.1 million across 191 properties.
This transaction amount was a 34% decrease quarter-over-quarter and a 1% decrease year-over-year.
Transaction prices for New York City’s multifamily units averaged $492 per square foot.
Notable Multifamily Real Estate Deals in New York in Q4 2022
There were several notable deals that took place for New York City’s multifamily real estate in Q4 2022.
- GO Partners purchased 415 units for $410 million on East 72nd Street.
- Witkoff purchased 248 units for $50 million on West 95th Street.
- GO Partners also purchased 208 units for $221.2 million on York Avenue.
- 100 units sold on Hicks Street for $92 million.
These are select examples among other activity.
New Multifamily Real Estate Development Activity in New York in Q4 2022
New multifamily deliveries for the year reached 28,000 units.
In Q4 2022, 61,799 multifamily units were under construction in New York City. This was a decrease of 2,063 units quarter-over-quarter and an increase of 6,128 units year-over-year.
Market Forecast for New York’s Multifamily Real Estate Market
Absorption, although still positive, trended downward at the close of 2022.
Asking rents per unit and units under construction were each trending upward at the close of the year when compared to Q4 2021’s numbers. Vacancies remained unchanged throughout the year.
While there were notable positive trends at the close of the year for New York City multifamily, economic uncertainty could negatively impact these trends in 2023.
Takeaways for Multifamily Real Estate Investors
Demand for New York City multifamily remained high throughout 2022 as inflation & rising interest rates pushed prospective homeowners out of the market. Over 28,000 new multifamily deliveries were made and vacancy rates stayed flat at 2.4%.
Private and institutional buyers and sellers accounted for the majority of property sales. Investors looking into New York City multifamily may do well with the right guidance.
Continue to do your research, stay diligent, and happy investing.
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