Yes, you read that headline right—according to the latest batch of rental market reports, Manhattan rents dropped ever-so-slightly for the first time since 2014. And we say ever-so-slightly, we mean it: According to the Elliman market reports, the average rent decreased one percent from February, and three percent from the same time last year; meanwhile, the median rent dropped about two percent from February, and nearly three percent from the same time last year. "The rate of growth has been falling since August," explains Jonathan Miller, who prepares the Elliman market reports.
The stability is also backed up by the Citi Habitats report, which states that "average rents in March 2016 remained largely unchanged from February." But Citi Habitats notes that year-over-year, "rents for one-bedroom apartments increased the most, with a 4.5% rise. Meanwhile, rents for studio units rose 2.6%, while pricing was up 2.1% and 2.4% for two- and three-bedroom homes respectively."
Additionally, both real-estate groups found that the number of concessions landlords are offering in Manhattan has risen—according to Citi Habitats, to the highest level since 2010. But since landlords are offering more perks like a month of free rent, that means fewer people are leaving their apartments; the vacancy rate also dropped from the same time last month.
So there's some good news, but it's maybe not time to get too excited. "I’m skeptical it will continue since the market sits in a robust local economy," Miller says. "I see it moving sideways for a little while—bumping up and down a bit but showing stability overall." Plus, per Miller, "rent growth remains strongest in lower half of the market and softest at the top"—so apartments that are nominally affordable aren't getting any cheaper.
Especially if you're looking in Brooklyn, where rental prices actually rose both month-over-month and year-over-year. The gap between Manhattan and Brooklyn median rents is officially only $525, and the median rent in Brooklyn rose to about $2,775. And in northwest Queens (which is the only area Elliman tracks in the borough), prices also decreased—median rents by about five percent, and average rents by about three percent. Landlord concessions are also up in both boroughs.
And still, this doesn't mean that things are affordable by any means—the average and median rents are still well above $2,500 in all three boroughs. But the terrifying ascent of the past few years may finally be over.
- March - 2016 Manhattan, Brooklyn and Queens Rentals [Elliman]
- Market Reports [Citi Habitats]
- New York City Rents May Finally Let Up On Their Terrifying Ascent [Curbed]