Analysis of Covid-19 on the NYC Apartment Market
Background & Inspiration
As the epicenter of Covid-19 in the United States, New York City has seen over 2.5 million cases since the outbreak of the virus. The virus had a devastating effect on the city, forcing the closure of schools, restaurants and bars - resulting in the loss of jobs for many.
Like many other industries, the real estate industry was greatly affected by the novel virus and real estate prices were drastically changed. The purpose of this analysis is to examine how drastically apartment rents changed in NYC and to identify any trends or patterns in the boroughs where rent declined the most. Further, this analysis seeks to examine the recovery of apartment prices in NYC as Covid cases are declining.
Since the goal of this analysis was to examine rent prices in NYC and any other factors that might affect prices, three data sources were used:
The above datasets allow for a full picture of how Covid cases affected rent prices and what external factors in each borough may have contributed to the changes.
To begin my analysis, I decided to get a basic understanding of the number of Covid cases in NYC. Using the NYT dataset, the below figure shows the average 7 day case count of Covid cases since the first recorded case on March 1st, 2020:
As seen in the figure above, Brooklyn and Queens consistently had the largest number of Covid cases while Manhattan and Staten Island had the fewest of all boroughs. Further, the graph allows us to understand the timeline of Covid cases in NYC. For the rest of this analysis, "Peak Covid" will refer to the month of January, 2021, "Pre Covid" will refer to January, 2020, and "Covid Start" will refer to March 1st, 2021.
After understanding the amount of Covid cases in NYC, I then decided to shift to look at median rent prices from Street Easy:
Looking at the above figure, it is clear that from 2010 through January 2020, real estate was a very strong investment. Landlords were able to slowly raise the rent over time in all five boroughs of New York. However, after the first recorded Covid case in New York, rents dropped significantly, as shown by the dip in March 2021. From the above graph, it is clear that there is a sizeable decline in median rents and that decline seems to be more prominent in Brooklyn and Manhattan, the two most expensive boroughs.
To further analyze this decline, I decided to examine the median rents at different times throughout the pandemic. See the chart below:
As is clear by the graph above, Manhattan and Brooklyn witnessed the greatest decrease in rent from Pre-Covid (January 2020) to peak Covid (January 2021). In addition, it looks like most boroughs were able to fully recover from this decline in peak Covid.
The next two charts will show how the boroughs have changed (and recovered) throughout different timeframes of the pandemic:
The above chart shows the percent change of median rents by boroughs from the start of the pandemic (March 1st, 2020) through peak pandemic (January 2021). From this chart, it is clear that Manhattan and Brooklyn saw the biggest decline in rent (-16% and -12% respectively). To understand if and how these rates have recovered, the following graph shows current rents vs. pre-pandemic rents:
The chart above shows how current rents have changed since January 2020. While peak pandemic saw a major decrease in rents, it appears that rents have fully recovered in three of the five boroughs and are only down around 2% in Manhattan and Brooklyn. Interestingly, in Queens and Bronx, rates have actually continued their trend of increasing that they have seen since 2010 (shown in the second chart of this document).
Ultimately, from the data presented above, it is clear that rates were greatly affected during peak pandemic, however have slowly but steadily recovered and have returned to pre-Covid rates. One question still remained in my analysis -- why did some boroughs (such as Manhattan and Brooklyn) experience such dramatic changes in rent, while the other three boroughs remained largely unchanged? In order to answer this question, I combined census data with the data presented above in order to find correlations.
As shown in the chart above, the largest factors affecting how significantly rent would change was the pre-Covid rent and the number of total housing units in 2020. Interestingly, the number of Covid cases in each borough did not greatly affect median rents in that area.
In conclusion, these insights prove to be valuable for different stakeholders in the real estate industry in NYC. As a renter, you can better understand how rents have changed over the past year and a half and understand if rents are still affected. For example, in Manhattan you can still expect to pay 2% less than you would before the pandemic. As a landlord, these insights are very promising and show that the NYC apartment market has fully recovered (and will most likely continue to grow). Landlords can use the above insights to understand how much they should currently charge for rent now and gauge what is a reasonable rate the industry should grow at.