Another month, another record for concessions in the outer boroughs.
Brooklyn and Northwest Queens both hit records yet again for the amount of new rental transactions with concessions in March, with the share hitting nearly 48 percent in Brooklyn and 63 percent in Queens, according to the latest report from Douglas Elliman. In Brooklyn, the size of the concession year-over-year remained stable at 1.5 months, while in Queens, it rose from 0.9 months to 1.8 months.
Jonathan Miller, CEO of the appraisal firm Miller Samuel and author of the report, said that concessions were unlikely to keep hitting new records indefinitely, but he did not see them leaving the marketplace anytime soon.
“They’re not keeping up with softening conditions as it is,” he said of developers, “and we have more product coming in, so I think concessions—the use of concessions—are going to be embedded in the market.”
The median net effective rent in Queens dropped to $2,559 in March, a 6.4 percent decrease and the fourth consecutive month that it went down. However, the rental price per square foot in the borough actually rose 2.6 percent to $49.91, according to the report.
Brooklyn saw the fourth consecutive decline in year-over-year net effective median rent as well, as it dropped by 6.3 percent to hit $2,629. Rental price per square foot also dropped to $45.95, a 3.9 percent decline.
Without factoring in concessions, median rent in Brooklyn dropped 3.4 percent to $2,750, and median rent in Queens dropped 1.8 percent to $2,750.
Listing discounts fell in Brooklyn, dropping from 1.8 to 1.4 percent, and rose in Queens, increasing from 0.5 to 0.8 percent. The number of new leases dropped in both boroughs, falling 21.9 percent to 946 in Brooklyn and 5.5 percent to 259 in Queens. In Brooklyn, listing inventory fell as well to 1,926—a 25.3 percent drop—but in Queens, it rose to 528, an 8.3 percent increase.
Properties in both boroughs spent less time on the market: 28 days in Brooklyn, down from 52, and 31 days in Queens, down from 41 last year.
“The terms that explain the condition of the market is oversupply skewed to the higher end,” Miller said, “so heavy use of concessions is likely to continue for the foreseeable future.”