The August 2015 rental reports are out and, just as you may have suspected, rental prices in Manhattan, Brooklyn and Queens remain at near record levels. But we shouldn't all plan mass exoduses from the city just yet, especially not in the next few months.
"I think things are going to turn a bit," says Gary Malin, president of Citi Habitats, which released their Manhattan rentals report today. "According to our data, the vacancy rate was around 1.4 percent, which for the busiest rental month of the year, is a little high. He thinks locals may feel they're "being pushed too far," rent-wise, just as we enter what's historically been months that have been proven more favorable for tenants. "Either landlords will make slight price adjustments or they're going to be willing to offer more concessions," he says. Translation: don't expect rents to plummet beyond their usual winter slowdown, but sharp-eyed renters can be prepared to take advantage of the seasonal cool-off—and maybe even finagle some concessions.
That said, you may still feel the pinch, especially if you're searching for a one-bedroom. According to the Citi Habitats report, that segment saw the largest increase in price year over year, rising by 7 percent. Studios are a close second, seeing rents surge by 6 percent. On the flip side, pricing for two-bedrooms rose by just 3 percent and three-bedrooms by just 1 percent.
The reason, according to Jonathan Miller, author of the Douglas Elliman rental report for Manhattan, Brooklyn and Queens, which is also out today, has to do with supply and demand. "The new developments coming on the market are skewed toward luxury, larger units. There's more pressure on smaller apartments because there's less inventory," he explains.
Also, according to Miller, the fact that credit is tight and banks are stricter about lending means that a lot of first-time buyers are unable to buy and are staying in one-bedrooms instead.
Malin says that given record pricing across the board, more couples and families who might be in the market for two-bedrooms are opting to make one-bedrooms work instead.
Meanwhile, the price gap between Brooklyn and Manhattan is continuing to narrow. "The spread between Manhattan and Brooklyn has been $200 to $500, and in August, Brooklyn's median rent was $288 less than Manhattan," Miller says. While he doesn't expect Brooklyn's median rents to surpass Manhattan's anytime soon, the trend is increasingly cementing. "Five years ago, that difference was $1,100."
Queens' median price was $362 less than Brooklyn's.
Below, a look at some of the facts and figures from the reports, and an apartment to match the area median.
Manhattan rental market (per Douglas Elliman):
Median rental price: $3,400 (up 7.1 percent from the same time last year, and the 18th consecutive quarterly increase)
Vacancy rate: 2.3 percent (up from 1.87 percent)
Manhattan rental market (per Citi Habitats):
Average rental price: $3,507 (up $57 over August 2015)
Vacancy rate: 1.4 percent (up from 1.27 percent in August 2015)
Brooklyn rental market (per Douglas Elliman):
Median rental price: $3,112 (up 10.8 percent from the same time last year, representing a record for the third consecutive month)
Listing inventory: 1,753 (down 2.4 percent from August 2014)
Queens rental market (per Douglas Elliman):
Median rental price: $2,750 (down 1.4 percent)
Listing inventory: 298 (down 6 percent since August 2014)