While rents continue to rise in the city, there's finally a smidgen of hope in the latest set of rental market reports. While median rental prices climbed for the 21st consecutive month, the vacancy rate is the highest it's been in nine years, which means landlords are being forced to offer tenants more concessions on rentals, explains data whiz Jonathan Miller, the author of the Elliman Report. "Rents are still rising but we are starting to see signs of weakness in the underpinnings," Miller told Curbed. "In other words, landlords are having to work harder to keep vacancy from rising too much—but tenants are feeling the squeeze."
In Manhattan, the median rent was $3,361 for the month of November, an increase of 3.9 percent from the same time last year. However, the rate of concessions in the borough—where landlords offer pay off some of the tenants' burden like the broker's fee—skyrocketed, with landlords offering concessions on 13.5 percent of all rental transactions that took place in the borough in November. That's almost three times the amount from the same time frame last year when the rate of concession was at 4.8 percent.
Some of the other key findings from the Manhattan rental report: Average rent in the borough went up to $4,071, an increase of two percent from the same time last year; but rental price per square foot dipped to $52.45. The number of new rentals on the market also rose—7.7 percent to be exact, bringing the new offerings to 3,082.
In Brooklyn, the overall median rent went down slightly (by 0.4 percent)—or, as MIller says, "remained flat." This is reflective of an ongoing trend: median rents in Brooklyn have been gradually declining since they peaked in August. However when breaking down apartments by size (studio, one-bedroom, two-bedroom, and so on), each one saw an increase in median rent from the previous year. For example, studio apartments in Brooklyn saw rent go up from $2,354 to $2,571, a substantial increase of 9.2 percent. Median rent in Brooklyn overall is still $426 cheaper than Manhattan and stands at $2,935 per month.
Additionally, the number of smaller units like studio and one-bedrooms decreased due to a greater demand for them. Developers have focussed their attention on building larger luxury apartments and as a result this has put more pressure on the smaller unit with the demand not necessarily matching up to the supply, according to Miller.
Among the three boroughs measured by the report, Queens still had the lowest median rent at $2,735. But it had the highest percentage increase in median rent at 8.3 percent, compared to a 3.9 percent in Manhattan and a 0.4 decrease in Brooklyn. Queens saw a staggering 94.6 percent increase in new rentals, compared with a 7.7 percent increase in Manhattan and a 10.2 percent increase in Brooklyn. As a result of the massive scale of new development, Queens also had the highest percentage of concessions by landlords, with more than 50 percent of new rental transactions in Queens including them, according to Miller.
Moving along to the MNS market report for the month of November, the real estate group solely focused on rental trends in Manhattan. Average rent rose 1.25 percent from $3,896 in October to $3,945 in November, according to MNS, and the number of rental units on the market jumped from 8,707 in October to 8,866 in November.
Among neighborhoods, Soho saw the biggest leap in average rent—a 19.3 percent increase from October to November this year, and a 19.7 percent increase between November last year and this year. Harlem was the most improved neighborhood in a year-to-year analysis with average rent increasing 10.9 percent from $2,423 in November 2014 to $2,688 this year.
And finally, Zumper took on national approach looking at the median rent prices for one bedrooms in major cities across the country in the month of November. San Francisco once again emerged the winner with a median rent of $3,500 followed New York City, with a median rent of $3,240. However both cities have experienced marginal dips in rents from the previous month. San Francisco saw prices drop 4.6 percent, and New York saw a 1.2 percent drop.
So aside from the fact that the rent is still too damn high, what's the takeaway here? According to Miller, prospective renters can at least take solace from the fact that with the serious increase in the number of available rentals and prices landlords are being pushed to up their game to attract more people.
· Elliman Report November 2015 [Douglas Elliman]
· MNS Manhattan Rental Market Report November 2015 [MNS]
· Zumper National Rent Report: December 2015 [Zumper]