Douglas Elliman has released its rental report for the final month of 2016, showing that the rental market did not end the year with a bang. “There’s stress in both Manhattan and Brooklyn rentals,” says Jonathan Miller, the man behind the numbers.
December marked a record amount of leases signed with concessions, 26.4 percent. That’s double the amount from the same time last year, which saw 13.1 percent of leases with concessions. Despite all that, the median rent in Manhattan is still higher than it was last year: $3,388/month as compared to $3,350. (The December median changes to $3,291 when you factor in concessions.) The median price for a studio was $2,575/month, a one bedroom came in at $3,395, a two bedroom at $4,588 and a three+ bedroom at $5,998.
December marked a big surge in new leases, Miller points out, with a 40.7 percent jump from last year to 3,553 leases signed. The reason? A lot of new development coming to market and tenants’ unwillingness to renew existing leases when they come with rent increases.
“This huge uptick comes from an increase of people moving on,” Miller says. He also tracked a rental trend we’ve seen all year: “pricing is softer as you move up [to the luxury market] and tighter as you move down.” For December, doorman rents slipped as non-doorman rents saw strong gains.
The numbers in Brooklyn tell a similar story: landlord concessions more than doubled from one year ago (from 6.5 percent with concessions to 13.7 percent), as brokers saw a surge of new leases (52.5 percent higher than last year), due to new development and tenants pushing back on rents. But the borough actually saw its median rent slide year-over-year for the fifth time in six months, from $2,807/month a year ago to $2,700 this December.
The median rent declined in all bedroom categories, with larger declines for larger units. The median for a one bedroom was $2,656/month, a two bedroom was $2,950 and a three+ bedroom was $3,498. But in Brooklyn, the luxury median rent edged higher, to $5,300, which is inconsistent with the general trend of softer prices at the top of the market.
Finally, in Queens—which has shown inconsistent pricing all year—rents increased for the sixth time in 12 months. In fact, all price indicators moved higher, as more new developments entered the market. The overall median rent was $2,850, up 11.7 percent from last December. The one bedroom median was $2,862, a two bedroom was $4,137 and a three bedroom+ was $3,365. The number of new leases signed this month—348 total—was a whopping 167.7 percent increase from last year. That increase corresponded with a 25.3 percent rise in the new development market share.
Citi Habitats released its December rental report and found that “overall rents in Manhattan and Brooklyn continued to trend downward.” The average rents for one- and two-bedroom units in Manhattan experienced a mere one percent drop, while average pricing for three-bedroom homes increased by a minimal amount.
In Brooklyn, rents for studio and three-bedroom apartments fell two percent since November, and declined one percent for one- and two-bedroom units. Still, Manhattan renters were paying more than they were last year: studios rented for seven percent more on average in December 2016 than one year ago, while rents for one and two bedrooms increased by two percent.
A surge of concessions pushed along the typically slow month of December, according to Citi Habitats. The firm found the percentage of leases that included a concession hit 35 percent, the highest since April 2010. But vacancy levels are still high, with Manhattan’s reaching 2.13 percent in December. According to Citi Habitats, the last time this much inventory was available was in April of 2009, when 2.28 percent of apartments were up for grabs.
- The Elliman Report: Manhattan, Brooklyn & Queens Rentals [Douglas Elliman]
- Citi Habitats December and Q4 2016 Report [Citi Habitats]