Rents are up in Manhattan and Brooklyn (again), thanks to reluctant buyers
The median sales price rose 10.5 percent to $1,215,000, a new record.
iStock
Landlords may be crying foul over the changes to the rent laws that limit security deposits, but New York City renters are also feeling pinched—again.
Manhattan and Brooklyn renters are seeing a continuation of the same story they’ve been seeing all year: Rising rents and fewer freebies, like free months or owner-paid broker fees, according to Douglas Elliman’s September rental market report for Manhattan, Brooklyn, and Queens.
Concessions fell in Queens for the sixth time in seven months, but the median rent went in the other direction: It declined 1.7 percent to $2,875.
Rents in Manhattan have been rising year over year throughout 2019, with the median rental price edging up 0.1 percent to $3,500 in September. In Brooklyn, the median rent was $3,000, up 5.3 percent, and the net effective median rent (the rent with concessions factored in) increased for the 10th straight month. The number of new leases with concessions slid in both boroughs, a trend that has been happening all year.
Strong demand for rentals is in large part due to the weak sales market—would-be buyers are putting off purchases and are continuing to “camp out” or rent for the time being. The weak sales market has been driving the strong rental market for about 10 months now. And New York State's recent rent reforms are also contributing to higher rents, as landlords look to offset their losses now that they can no longer ask for multiple months of rent upfront.
“The strength of the rental market has allowed landlords to keep raising the price this year, with the September numbers reconfirming this again,” says Hal Gavzie, executive manager of leasing for Douglas Elliman.
“We’ve seen concessions inching lower and lower over the past several months, but they are still significant enough to be compelling to renters and drive strong leasing activity—especially in Brooklyn. And as long as the sales market in the region remains soft, demand in the rental market should remain strong,” he says.
New renters were paying less in Queens as a result of a drop-off in new development leasing activity, which skewed the overall market lower over the past several months. Leases in new development—where rents tend to be higher—represented 31.8 percent of the total market, down from 39.3 percent.
“Queens continues to be an outlier in the New York City rental market, but the Manhattan and Brooklyn markets are still thriving,” says Jonathan Miller, president of appraisal firm Miller Samuel and author of the report.
“It’s worth noting that in addition to the lower new development rental activity in Queens, the sales market is also much stronger than in the other boroughs which may also be contributing to this standalone effect,” he says.
Other market reports
Citi Habitats September and third quarter 2019 rental market report suggests apartment-seekers are beginning to see some relief as the market begins its fall season slowdown, thanks to a small uptick in inventory.
“The city’s rental market remains strong, but cooled slightly as we entered fall,” says Gary Malin, president of Citi Habitats. “Inventory crept up in September and some great incentives are still in play, especially in new buildings," he says.
You Might Also Like
