Renters in Manhattan and Brooklyn have it rough: Rents continue to rise and concessions continue to fall.
That’s the upshot of Douglas Elliman's July rental market report for Manhattan, Brooklyn and Queens, which shows the same trends that marked previous months are largely continuing.
There was one surprise, however: Prices slipped in Queens for the first time in five months, and concessions were on the rise, a situation that Jonathan Miller, president and CEO of appraisal firm Miller Samuel and the author of the report, calls an “outlier.”
Hal Gavzie, executive manager of leasing for Douglas Elliman Real Estate, attributes the trends to ongoing uncertainty in the sales market, which keeps potential buyers parked in rentals for the moment.
“Prices keep going up, setting a record in Brooklyn [in July], and concessions are elevated but falling, so it certainly seems like this market strength will continue,” says Gavzie.
In Manhattan, the median net effective rent, meaning the rent with concessions factored in, rose the most year over year in 47 straight months. The median rent increased 5.7 percent to $3,595.
Also in Manhattan: Luxury rents above $10,000 remain flat. For new development, the rent increased more than twice as much as existing median rent, according to the report. The number of new leases rose 5.1 percent to 6,460.
In Brooklyn, there were similar trends: The net effective median rent rose year over year for the eighth straight month and the median rent hit a new record high of $3,000, rising up 1.7 percent.
The market share of concessions has fallen year-over-year in the borough for every month so far in 2019.
The percentage of new rental transactions with concessions was 34.4 percent, down from 41.4 percent. The number of new leases rose 13 percent to 1,759.
Queens showed some signs of weakness, with the net effective median rent decreasing 3.9 percent to $2,837 and the median rent falling for all apartment sizes. The share of new leases with concessions increased, though notably the market share of new development concessions declined.
New development market share was 33.3 percent, up from 26.5 percent and the number of new leases rose 13.3 percent to 268.
“It’s too early to call that weakness a trend,” said Miller. “The market share of concessions decreased across all three boroughs, and I anticipate that the overall strength of the rental market will be maintained in the coming months.”
Other market reports
Citi Habitats found the vacancy rate reversed course, and climbed—after falling steadily for six consecutive months.
“Rents in Manhattan and Brooklyn climbed to new heights in July. However, this higher pricing caused an uptick in the vacancy rate, which is unusual for summer,” says Gary Malin, president of Citi Habitats. “In the interest of affordability, many renters became more flexible in terms of neighborhood, or postponed their search to when conditions will be more tenant-friendly. With tenants’ budgets stretched to the limit, even the smallest rent increases can have a big impact.”
MNS looks at the July rental market in Manhattan, Brooklyn, Queens, and the Bronx. It found the largest monthly rent increases for non-doorman studios in the Financial District, which are up 22 percent, from $3,290 to $4,035.
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