While rents in New York remain, on the whole, too damn high, the market for rentals continues to show some small signs of relief compared to last year. Douglas Elliman has released its October rental report, and the numbers reveal that the median rent has fallen from year-ago periods in Manhattan, Brooklyn and Queens.
In Manhattan, the median net effective rent slipped year-over-year for the 10th month of the past 12; it's down 0.2 percent to $3,330. In Brooklyn, the net effective median rent declined annually for the sixth consecutive month; it fell 2.9 percent to $2,760. Finally, in Queens, the net effective median rent declined year-over-year for the third consecutive month; it dropped 0.5 percent to $2,817. (And yes, we know: those numbers are still ridiculously high.)
Focusing in on Manhattan, for the first time in approximately 27 months, the “doorman” median rent grew faster than the “non-doorman” median rent. Doorman rent came in at $3,900 for October, a 1.3 percent boost from last year, while non-doorman rent came in at $2,840, a 1.9 percent decline.
According to Jonathan Miller, the man behind the numbers, though the median rents are down, prices on the luxury side of things are up. "It's not because the prices are truly rising," he says—instead, it’s caused by new, high-end developments that have come to market recently. Much of those new apartments are more "lower end" luxury than higher end—the so-called “affordable luxury” apartments.
But could there be some signs of relief for renters who don’t want those high-end apartments? Possibly: Perks like a month of free rent are still being used quite a bit to lure renters: In Manhattan, the share of new rental transactions with concessions was 28 percent last month, up from 23.9 percent.
The number of new leases fell year-over-year for the first time since February, and vacancy rose for the second consecutive month—it's the highest October tracked for vacancy levels in 11 years. Plus, throughout 2017, we've seen concessions flatlining as the vacancy rises.
"The question is, what happens with concessions? Will they start to rise?" Miller asks. "I don't expect them to rise—I think face rents [rents without concessions] will have to actually fall to keep vacancy down."
Over in Brooklyn, the number of leases signed is actually up—that number rose for the seventh time in eight months, due to new rentals hitting the market and tenant's resistance to rent increases. Concessions are still heavily in use, with 19.3 percent of leases signed having some sort of perk for renters.
Finally, in Queens, leases signed with some kind of concession hit a new high—48.3 percent of units came with ‘em, as opposed to 18.1 percent a year ago. Concessions offered specifically on new developments in Northwest Queens came in a whopping 86.8 percent.
Citi Habitats also released its October report, highlighting the Manhattan vacancy on the rise. The report says it's above two percent for the first time in 2017. Gary Malin, President of Citi Habitats, says it's partly due to the seasonal decrease in demand. But he added that "to combat rising inventory, [landlords] will likely ratchet up their use of incentives—and potentially lower rents on select units—as we move through fall. For apartment seekers, the coming months are likely good ones to make a move."
Citi tracked the average monthly rent for a Manhattan studio at $2,422; a one-bedroom averaged at $3,219; two-bedrooms averaged at $4,021; and finally, three-bedrooms averaged at $5,461. The most expensive neighborhood to rent in last month was SoHo/TriBeCa, with a median rent of $4,995. Washington Heights was cheapest, with a median rent of $2,299.
As for Brooklyn, studio apartments—in the 14 neighborhoods studied—rented for $2,284/month on average, six percent less than Manhattan. For one-bedrooms, the average rent was $2,761, while rents for two- and three-bedrooms clocked in at $3,598 and $4,899, respectively. DUMBO was the most expensive neighborhood in October, with a median of $4,700, and Crown Heights was cheapest with a median October rent of $2,450.
- October - 2017 Manhattan, Brooklyn and Queens Rentals [Douglas Elliman]
- October 2017 Rental Market Report [Citi Habitats]