As interest rates remain high to fight sluggish inflation and scare away potential homebuyers, the rental market remains highly competitive.
And while the New York City boroughs of Manhattan and Brooklyn are seeing the biggest jump in competitiveness, neighboring North Jersey is now ranked as the most aggressive renter market in the country, according to a new study.
Data from the latest RentCafe Rental Competitiveness Report shows that Northern New Jersey, which includes Bergen, Essex, Hudson, and Passaic counties in the city’s suburbs, ranked first in rental demand.
The study found that these North Jersey neighborhoods, which include Jersey City, Hoboken, East Orange, and Hackensack, are twice as competitive as Manhattan due to a severe housing shortage.
In particular, the influx of tenants is pushing occupancy to almost 97%.
The occupancy rate, combined with a record 72% of tenants opting to renew their leases and an average of 12 people vying for one unit, resulted in a Rent Competitiveness Index (RCI) of 67 at the start of 2023.
For comparison, the national RCI is 60.
Meanwhile, in Manhattan, nearly two-thirds of tenants renewed their leases (64%), and occupancy increased 0.4% year-on-year to 95%. On average, this resulted in six tenants vying for one available unit.
Even though Manhattan posted the fourth-highest year-on-year growth in competitiveness with a score of 30, it wasn’t enough to make RentCafe’s list of the 20 most competitive markets for the year.
However, Brooklyn finished in 14th place. The district scored 14 points for competitiveness.
Housing in Brooklyn is not keeping up with demand, the study notes. Newly opened apartments added only 0.3% to what was available on the market – and this was not enough to reduce occupancy at 96%.
On top of that, more than two-thirds of Brooklynians renewed their leases (65%), with an average of nine tenants applying for the same property.
Overall, eight of the top 20 rental locations in the country are in the northeast.
The study found that first-time homebuyers continue to rent in North Jersey, with relatively affordable living costs in the area compared to New York.
In turn, this will allow renters to save more money when the housing market cools down so they can buy a home.
Credit: nypost.com /