The October market reports are out, and as Douglas Elliman’s Jonathan Miller says, "the key metric in the report is that concessions in Manhattan have hit record levels." Miller has tracked rental concessions from landlords for the past six years and last month those hit an all-time high, with 23.9 percent of all market-rate Manhattan rentals coming with concessions from eager landlords—up from 10.4 percent one year ago.
Basically, Miller says, "The higher the price of the rental, the higher the concessions." Although the low end of the market is much tighter and more competitive for renters, "there are still concessions... it’s not all or nothing," Miller says. Breaking it down, 23.9 percent of doorman buildings came with concessions, while 16.6 percent of non doorman buildings did.
The reasons for all these concessions is a matter of increased rental supply, particularly from new, high-end developments—a trend New York has seen throughout the year. It doesn’t look like monthly rents took a big hit last month, though. "Every month now, medial rent over a year-to-year basis has been up a little or down a little," Miller says. The median rent for Manhattan rentals was $3,400, compared to $3,391 a year ago, while the average price came in at $4,223, compared to $4,096 last year.
In Brooklyn, concessions came in for 12.1 percent of rental apartments—the second highest number that Miller has tracked since this February, when concessions came with 12.9 percent of rentals. Miller says that "the rental market is tighter than Manhattan’s, but you still see more concessions." Brooklyn’s median rent for October was $2,875, just a slight change from $2,883 one year ago. (The median price has slipped year over year for the third time in four months.) The average came in at $3,139, as compared to $3,189 last year.
Last month in Queens it was a "new development market," Miller says, with those units making up more than half of the market share. That’s skewed prices higher, but Miller called the Queens market "essentially flat" due to a surging listing inventory that outpaced growth in new leases. This year he’s tracked five months of year-over-year increases in the median rent, and five months of year-over-year decreases. "It’s consistently up and down," Miller says. "The rents are elevated but generally aren’t rising this year."
One thing of note: the median rental price was $2,900, up from $2,568 last year and $25 higher than Brooklyn’s median rent. The average was $2,986, compared to $2,939 in 2015.
Citi Habitats also released its October rental report and found that "concessions held steady - and were found in a substantial 26 percent of new leases—compared to just 8 percent last October." (There hasn’t been that many concessions during the month of October since 2009.) According to their stats, 26 percent of rental transactions offered a free month’s rent and/or payment of the broker fee to entice new tenants, down slightly from 28 percent in September. But it’s a huge leap from October 2015, when only eight percent of leases offered a move-in incentive.
Gary Malin, president of Citi Habitats, noticed increased renter traffic from New Yorkers hoping to find bargains. He says, "As a result, landlords attempted to raise pricing—albeit very slightly—in some cases." Landlords at this point still prefer offering incentives, rather than price drops, in the softening market, but the market hasn’t yet shifted in the landlords favor.
Citi Habitats found that the average Manhattan pad rented for $3,498 this October, $11 more than it did in September, when the average was $3,487. Looking year-over-year, average rents are also up slightly. The average came in at $3,5491 during October 2015, $7 less than it did last month.
The average monthly rental price for a Manhattan studio was $2,396, for one bedrooms it was $3,089 and two bedrooms were $4,159. In comparison, Brooklyn studio apartments (in 14 neighborhoods studied) rented for $2,296/month on average, while one bedrooms averaged at $2,820. Rents for two- and three-bedrooms clocked in at $3,605 and $4,991.
Citi Habitats tracked the most expensive rents last month in the neighborhoods of SoHo/TriBeCa (median rent of $5,995) and Gramercy/Flatiron (median rent of $4,500). In Brooklyn, DUMBO was the most expensive neighborhood with a median rent of $4,284, followed by Williamsburg, where the median rent was $3,350.
Manhattan rents were lowest in October in Washington Heights, with a median price of $2,398. Below 96th Street, the Lower East Side was the least expensive neighborhood for renters with a median rent of $3,299. And in Brooklyn, Crown Heights was the least expensive neighborhood tracked with a median rent of $2,415.
- Citi Habitats October Report [Citi Habitats]
- October - 2016 Manhattan, Brooklyn and Queens Rentals [Douglas Elliman]