The Manhattan and Brooklyn rental markets may have turned a corner in November—it was the second straight month to see a spike in new leases, and owners are probably breathing a little easier now. But the gains were not without some significant pain for them.
Landlords had to drop rents and dole out significant concessions to get to this point. But it seems to be working. Renters came back to the Manhattan and Brooklyn markets and signed new leases last month as a result of new affordability, according to the most recent Elliman Report for Manhattan, Brooklyn, and Queens.
Manhattan had the most new leases signed for November in more than a dozen years. There were 4,015 leases signed, a 29.7 percent increase over the number of leases signed in November 2019.
And last month, new leases in Manhattan hit the highest October total in 12 years, an increase of 33.2 percent over October 2019. Manhattan leasing activity had not seen any gains for the previous 14 months and had just started to perk up in September.
Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report, previously cautioned it was premature to call October’s leasing activity a new trend, but with November’s numbers there’s more evidence a shift could be underway.
The number of available Manhattan rentals (15,130) saw the first month-over-month decline since March—which is significant since the vacancy rate remains stuck at 6.14 percent for the second month in a row. Listings are up 180.3 percent over November 2019.
With so many apartments, and not enough renters, Manhattan rents are down as well. November’s median rent, $2,957, was down 17.9 percent over the November 2019. Net effective rent—meaning rent that reflects landlord concessions like free months, saw the largest year-over-year decline in more than nine years, the report says, and the year-over-year declines in net effective median rent for all bedroom sizes were the largest on record. Manhattan luxury rentals saw the lower annual rent declines than the rest of the market.
In Brooklyn, November also brought the highest number of new leases in more than a dozen years, increasing 27.8 percent over November 2019. The share of leases with concessions reached a record high: 55.1 percent of leases came with a concession that averaged 1.8 months of free rent.
The number of available Brooklyn rentals surged to 169.3 percent to the third-highest level in 12 years. Median rent dropped 5.6 percent for the year to $2,786.
The Queens rental market saw the number of new lease signings decline for the 16th straight month, while landlords offered more concessions—66.1 percent of new leases came with some kind of concession.
Median rent dropped 16.4 percent to $2,500 and the net effective median rent feel year over year at the highest rate in more than four years, the report says.
Other market reports
MNS released its November rental market reports for Manhattan, Brooklyn, Queens, and the Bronx. The reports drill down to look at rents by apartment size and neighborhood—and compare doorman to non-doorman buildings in Manhattan. Findings include: The largest rent drops were seen in non-doorman, two-bedroom apartments in the Financial District; doorman, two-bedroom apartments in the East Village, and non-doorman, one-bedroom apartment on the Upper West Side.
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