Are NYC landlords finally paying attention to all our collective complaining about astronomical rents? Maybe. A bevy of November rental market reports dropped today, and while prices won't be plummeting anytime soon (sorry), all signs point to rental prices gently easing away from their insane, unstoppable surge of recent years.
While prices edged slightly up year-over-year in Manhattan—three percent, according to Douglas Elliman's report— and more or less held steady in Brooklyn, the rise in landlord concessions as well as vacancy rates indicates that renters are less willing to pay sky-high rents.
"In the last three or four months, we've seen this expansion of discounting or concessions," explains Jonathan Miller, author of the Elliman report. "It doesn’t mean rents are going to fall tomorrow, but if this continues it means we’re not going to see the same growth that we were seeing before."
Another bellwether (besides landlords offering extras and discounts lately): Per the Citi Habitats report, the Manhattan vacancy rate is up to 2.02 percent (it was 1.81 percent back in October), the highest it's been since 2009. This might seem small, but it's a solid indicator that landlords are having more trouble finding takers for their ultra-pricey units.
"The fact that Manhattan’s vacancy rate has been on an upward trend since May of this year is evidence that we are dealing with something greater than the standard winter-season slowdown. A vacancy rate over 2 percent is very unusual," explains Citi Habitats President Gary Malin. "The current market conditions reflect the time of year, but also a fundamental disconnect between landlords’ pricing and tenants’ ability to pay." And since landlords hate nothing more than an empty apartment, they've started offering more concessions like a free month's rent, and may have to start adjusting prices, too.
Still, much of the so-called "softening" of prices is at the top of the market, with the glut mostly comprised of large, luxury, and super-expensive rentals now available. If you look closely at the Elliman numbers, median prices dropped from last year for apartments in the top 10 percent of the rental market by 1.4 percent, but still grew at the middle tier (up 4 percent) and lower tier (up one percent).
"Look at what we’re building: it's all skewed towards luxury," says Miller, who adds that high demand in other markets will likely keep prices from dropping much. "Instead of rising briskly, prices might rise more modestly or stay level, but I wouldn’t expect much in the way of declines," he says.
Median Manhattan rental price: $3,361, up 3.9 percent from 2014
Median Brooklyn rental price: $2,935, down 0.4 percent from 2014
Median Queens rental price: $2,735, up 8.3 percent from 2014
Percent of rental transactions with concessions: 13 percent
Manhattan vacancy rate: 2.02 percent
Most expensive neighborhood for Manhattan renters: Soho/Tribeca, median rent $4,795
Least expensive neighborhood for Manhattan renters: Washington Heights, median rent $2,000