clock menu more-arrow no yes mobile

Filed under:

NYC’s busy summer season ends with a record number of leases signed

And—surprise!—the use of concessions is still high

Via Compass

Summer is almost almost over, which means it’s time for the final market reports of the typically busy renting season. And this past month was busier than ever: At Douglas Elliman, numbers whiz Jonathan Miller found that August had the largest number of leases signed since he began tracking this data nine years ago. From a year ago, the number of new leases signed increased 12.3 percent, to 7,061.

The record number reflects new development coming into the market as well as tenant pushback to get better deals, according to Miller. "July and August are the peak months, but there is a lot of new product being leased up," Miller says. And concessions haven't disappeared; in Manhattan, the number of perks offered by landlords doubled year-over-year to 24.1 percent, with 1.3 months of free rent or the equivalent typically being offered.

But if you’re looking for a cheaper unit, you’re out of luck; many of the new units skew luxury, pushing up demand for smaller, cheaper units. “Studios and one-bedrooms are encountering pricing pressure,” Miller says.

Across the whole of Manhattan, the median rent rose 1.3 percent year-over-year to $3,442, while average rents increased 1.4 percent to $4,088. Factoring in concessions, the median rental price edged up 0.5 percent to $3,377.

In Brooklyn, concessions are high and the rent is going down—if only slightly. More than 20 percent of all leases had some kind of concession, leading the net effective median rent to drop for the fourth consecutive month. It was down 0.3 percent to $2,851. The overall median rental price increased nominally by 0.2 percent to $2,900, while the price per square foot slipped 0.1 percent to $46.68.

In Queens, the landlord concessions market share was five—yes, five!—times higher than last year, rising from 8.7 percent to 44.7 percent. Inventory was also up 12 percent over the same time last year, with year-over-year increases for the 22nd time in 24 months.

And yes, those two things are related: "Because 43 percent of all activity is new development, the crush of new supply requires significant concessions," Miller explains.

The borough also saw its first annual decline in median rent in five months—it fell 1.2 percent to $2,859. When you factor in concessions—typically around 1.2 months of free rent, or its equivalent—it fell 3.6 percent to $2,764.

Citi Habitats found that Manhattan and Brooklyn rents remained stable—and near historic highs—while the vacancy rate declined. "However, landlord-paid concessions continued to remain prevalent," the report says, "and their use increased when compared to July." According to Citi Habitats’s data, 31 percent of apartments came with free rent, no broker’s fee, or both, up from 24 percent in July.

Last month, the average monthly rental price for a Manhattan studio was $2,363. For one-bedroom homes, the average was $3,193. For two-bedrooms, $4,069. Finally, the average three-bedroom apartment rented for $5,420.

Brooklyn studio apartments (in the 14 neighborhoods studied) rented for $2,296 per month on average, with one-bedrooms renting for $2,836. Rents for two- and three-bedrooms came in at $3,733 and $5,102, respectively.

The most expensive Manhattan neighborhood for renters in August was SoHo/TriBeCa (median rent of $5,100); the cheapest was Washington Heights ($2,200). For Brooklyn, DUMBO was the most expensive neighborhood, with a median of $4,500, and Bed-Stuy, with a median of $2,500, was the cheapest of the neighborhoods tracked.