There are two things New Yorkers accept as part of life in the Big Apple: rats and rising rents. Which is why when rents throughout the city declined ever so slightly over the last few months, most people didn't think it'd stick. They were right—that was a fluke. The Elliman rental market reports are out for April and rents have, sadly, resumed their ascent into the unknown. At least it was nice while it lasted.
Although dipping rents is something to celebrate, they didn’t really go down that much; and they haven’t really gone up that much, either. In March, the median rent in Manhattan decreased one percent from February, and in April, rents increased three-and-a-half percent from March. The median Manhattan rent is now $3,415.
Elliman data compiler Jonathan Miller thinks that the fluctuation in the market has been caused by a "high plateau" wherein a rebounding job market coupled with the city's growing population will cause rents to fluctuate for the next year as they figure out where to go.
Although rents are on the rise, other signs of how the market is doing are pretty weak. The use of concessions in Manhattan, like free rent or brokerage commissions paid by landlords, jumped from just under three percent last year to thirteen percent this year. Citi Habitats data found that vacancies in Manhattan are up to 1.81 percent caused by increases in price. "Tenants have hit some sort of affordability threshold," Miller says. The apartments are there, but they’re asking more than people can reasonably afford (which we’ve seen time and time again.)
Just like in Manhattan, prices are gaining in the non-luxury end of the market in Brooklyn while developers continue to dish out a supply of luxury properties. The result is a supply that isn’t matching renter demands. As a result, the use of concessions in Brooklyn is also on the rise, and has doubled since this time last year.
In Brooklyn, the median rent rose just .2 percent from March to $2,780, marking the fourth month in a row the median Brooklyn rent has increased. Brooklyn’s median rent is now $653 less than Manhattan’s, but just $27 more than the median rent in Queens.
Meanwhile, the median rent in Queens slipped for the fourth month in the past five months on a year-over-year basis—it’s now $2,753. The culprit? Supply isn’t matching renter demand. Nineteen percent of the apartments that came to market in northwest Queens in April were in new developments, meaning that they tended to the higher end of the market, where demand is the weakest.
The big takeaway here? According to the stats, renters are clamoring for more affordable rentals yet developers keep building higher-end. Rents in the coming year probably won’t spike or dip dramatically, but rather fluctuate as the market figures out where to go.