New York’s pause order was mirrored in New York City’s rental market last month.
The number of New Yorkers signing new leases plummeted in April by a stunning 71 percent in Manhattan, 67 percent in Brooklyn and 65 percent in Queens from a year ago, according to Douglas Elliman’s monthly rental report.
The report, authored by appraiser Jonathan Miller, covers Manhattan, Brooklyn and northwest Queens neighborhoods Long Island City, Astoria, Sunnyside and Woodside.
The low number of new leases indicates high renewal activity, which cannot be tracked in the report, Miller explained.
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The low supply of available rentals pushed their average prices higher because open units tended to be in more expensive buildings. Low-end units were less likely to hit the market than usual, presumably because landlords and tenants did not want to cope with filling and finding new apartments during the pandemic.
“We have this incredibly distorted market,” said Miller. “What you’re seeing now is fewer properties and they’re skewed to the higher end.”
Even as the supply of available apartments fell, landlords agreed to steeper discounts than usual, an indication of plunging demand. Meanwhile, rental markets surged in summer and weekend towns outside of the city, such as the Hamptons and Jersey Shore.
According to Miller, new leases typically represent about a third of the city’s rental market. Renewals make up the rest.
Rents also grew in March, which Miller postulated at the time might have been caused by a lag in the data. Shutdown orders had begun mid-month.
Looking at the April data, he emphasized that “what we’re seeing publicly is not representative of a normal market.” The true story of New York City’s rental market “is being dealt with on the renewal side in private,” he said.
In Manhattan, new leases signed in April dropped 71 percent from a year ago to 1,407, the lowest number recorded since April 2009.
The median Manhattan rental price last month was $3,650, a 4.9 percent increase year-over-year. Listing inventory fell 14 percent to 4,714 units available. Listing discounts — the amount by which asking rent is lowered from its original price — rose to 1.8 percent from 1.2 percent a year earlier.
Manhattan’s vacancy rate also increased to 2.4 percent from about 2 percent in April 2019, a sign that despite fewer listings, renters aren’t falling over themselves to secure a new apartment in the city.
In Brooklyn, new leases fell 67 percent to 439 — the largest drop since Miller began tracking the market in January 2009. The median rental price was $3,197, up 16 percent year-over-year, while listing inventory slid 28 percent from last year, to 1,357 apartments.
Listing discounts in the borough saw a sharp uptick to 1.8 percent from 0.7 percent in 2019.
In northwest Queens, the number of new leases signed declined 65 percent to 100. It was the biggest drop since at least December 2012, when Miller began tracking that market. He noted that the number of leases in new development buildings was the lowest in four and a half years.
The median rental price in Queens was $2,812, a 3 percent increase year-over-year. The number of for-rent apartments fell 29 percent to a total of 336 and listing discounts rose to 1.2 percent from 0.5 percent the prior year.
Write to Erin Hudson at ekh@therealdeal.com