Were you hoping for some good news about New York City's rental markets to kick off your weekend? Well, too bad: The latest batch of rental reports are out, and the news is not great. According to Jonathan Miller, the numbers whiz who prepares Elliman's reports, it's the same old story: rents keep rising in Manhattan, Queens, and Brooklyn, with no signs of slowing anytime soon. In Manhattan, the average monthly rent is now just slightly above $4,000—to be precise, it's $4,096, a 2.6 percent increase from the same time last year. And the median rental price, which is now $3,391—a 4.5 percent increase over last October—has jumped for the 21st consecutive month, a feat that Miller says isn't quite a record, but it's getting close.
Even worse, the price gains are all at what Miller calls the lower end of the market—studios and one-bedrooms, a.k.a. the apartments that many single people or not-insanely-high-earners might be looking for. The average price for a Manhattan studio, for example, is now $2,738—a 7 percent increase over October 2014. For one-bedrooms, the jump is slightly smaller: the average price is now $3,499, a 3 percent increase over last year. And non-doorman buildings are seeing bigger price jumps than doorman buildings, which also points to more demand for lower-end apartments.
Paradoxically, the smallest gains were in the luxury rental market, where the average price for an apartment—a whopping $10,536 per month—actually dropped from the same time last year. (The median price increased by 2.9 percent, and is now $8,750.) What's up with that? According to Miller, "consumers at high end tend to have less credit challenges," meaning they can actually afford to buy rather than rent. Miller also notes that "luxury is the only segment where supply has actually grown," so there isn't the same demand pushing prices higher than we see at the lower end. Basically: If you're looking for an apartment in a non-luxury building, expect higher prices and fierce competition. (Great!)
Now, on to Brooklyn, where the news is similarly depressing. The average rent in Kings County has jumped nearly 6 percent from last year, to $3,375 per month. And according to Miller, there are some record-breaking numbers in this month's report: The median Brooklyn rent, which increased about 4 percent to $2,981, is the second-highest on record since Elliman started tracking data for the borough in 2008; the prices for one-bedrooms ($2,898, a whopping 7 percent jump from last year), is actually the highest it's ever been. Like Manhattan, "luxury rents are weaker than the overall market," according to Miller, and the biggest gains are in the low end. There was, however, an 18 percent increase in the number of rentals on the market, so maybe all is not lost for Brooklyn apartment-seekers.
The biggest increases were in Queens, where the average rental price leapt 8.1 percent from this time last year to $2,939 (though, weirdly, the median rental price is down by 6.4 percent from this time last year). "The price indicators were mixed year over year—I'd call the market fairly stable, but high," says Miller. Elliman tracks the rental market in northwest Queens—Astoria, Long Island City, Woodside, and Sunnyside—so unsurprisingly, much of the growth was in new developments. In fact, 32.7 percent of the apartments that came on the market were considered "new" developments, which Miller says can cause "a lot of volatility month to month."
MNS also released its rental market reports (warning: PDFs!) for Manhattan, Brooklyn, and Queens this week, and the numbers there tell a similar tale: Rents keep going up, up, up over the same time last year. In Manhattan, prices for all types of apartments—non-doorman and doorman, studios to two-bedrooms—saw increases year-over-year, with the biggest jump happening for doorman two-bedrooms, which are now $6,274. MNS's data puts the average monthly rent in Manhattan at $3,896, only slightly less than Elliman's numbers. And the gains were reported across nearly all Manhattan neighborhoods, with one outlier: the Financial District, where the average monthly rent dropped by 2 percent. The most expensive neighborhood is Tribeca (duh), and the least expensive is Harlem.
Similarly, in Brooklyn, MNS reports that rents have increased year-over-year, but only slightly—by about 1 percent, to $2,719. According to its data, the biggest gain—both in rent increases and in number of apartments on the market—was in Williamsburg, where the average monthly rent jumped by 10.5 percent year-over-year to $3,499. The neighborhood also made up more than 20 percent of all apartments on the market in October 2015. Even still, Dumbo is consistently the most expensive neighborhood in Brooklyn, with rents well above $3,000 across all types of apartments. The least expensive? Bay Ridge, where the average price for a studio is still only $1,335, and a two-bedroom is only $2,246. Prices are also up in Queens, with Ridgewood seeing the biggest year-over-year increase—rents in that Brooklyn-straddling neighborhood have gone up 7 percent. Even still, it remains one of the least expensive parts of the borough, particularly if you're looking for a studio or a two-bedroom. Unsurprisingly, Long Island City is the most expensive neighborhood.
So what's the takeaway here? It's harder to rent in the low end, because that's what everyone is looking for. "Studio and one-bedroom tenants that want to become purchasers before interest rates rise are being bumped back into the rental market," explains Miller. "The problem there is that the only new supply coming on is skewed towards luxury where rent growth is the weakest." TL;DR, if you want a one-bedroom or a studio, be prepared to go to the outer boroughs—unless you happen to have lots of extra cash to throw around.
· October 2015 Manhattan, Brooklyn and Queens Rentals [Elliman]
· All Rental Market Reports [Curbed]