When the pandemic took hold early in 2020, rents plummeted in New York City as many students and workers fled upstate and to the surrounding suburban areas. By the end of the year, the median rent in Manhattan had fallen to its lowest level in 10 years. But as the vaccine became widely available in 2021, people began pouring back in and the housing market recovered remarkably well, with rents approaching or even surpassing pre-pandemic levels.

It was a similar story for the sales market. Covid canceled the 2020 spring selling season but returned with a bang in 2021. Buyers who emerged from the pandemic with income fully intact (or even better off) were aggressively looking to upgrade their property. Over the summer, with remote workers tracking bigger spaces and low interest rates, properties across the city sold at a brisk pace. The competition was intense, and Manhattan and Brooklyn both set records for the number of signed contracts in a year. Annual median sale price also reached an all-time high in both boroughs.

The rental concessions offered by landlords for the past two years are gone, and rents increased steadily throughout 2021. In anticipation of further increases, many tenants opt to secure better deals with longer leases if they can, a pattern seen across the city—and something to consider if you're signing a new lease.

With the return of seasonal market patterns, tenants are finding slight value on the rental market this winter compared to last year. Because New York City has already regained three-quarters of its population that left during the lockdown, it’s a little less competitive out there. However, with inventory quite low at the moment, it remains difficult for renters to find the ideal property at a good price.

If companies delay fully reopening offices until late spring or summer, as Covid declines and warmer weather sets in—there could be a repeat of last year's hustle back to the city, ramping up competition even further. With that in mind, if you're hoping to find a new rental in 2022, sign a new lease before competition is likely to pick up during the summer and fall months.

The sales market is poised for further gains in 2022, as momentum shifts further away from the suburbs and international travel ramps up, ushering back the foreign investors who largely remained on the sidelines since Covid began. Buyers will hopefully have more inventory to pick from as the market settles back into typical spring and fall selling seasons.

If you're preparing to sell this year, expect to encounter a brisk market, but one not yet likely to generate pre-pandemic prices for all categories. Some analysts believe it could take another year for a full recovery, but the resilient New York City real estate market has already made a major comeback.