Brooklyn and Manhattan prices have finally come down enough to pull renters back. It could be an early indicator for the rest of the city.
New lease signings had been down in Manhattan year-over-year for the previous 14 months, but last month was the busiest October in 12 years.
The market share of landlord concessions and new concessions set new records, too — and the net median rent fell to its lowest level in nearly a decade, according to the latest Douglas Elliman rental report from appraiser Jonathan Miller.
Would-be Manhattan renters received the message.
“In the context of what’s happening, this is a marker of the gutting of rental prices as measured by the record vacancy rate, record market share concessions, and the record amount of concessions,” said Miller. “We’re hitting the point where it’s pulling people into the city.”
The year-over-year declines in net effective median rents for studios, one-bedrooms and two-bedrooms in Manhattan were the largest recorded.
Overall, concessions in non-luxury apartments in the borough were much higher than for luxury properties. Also, the rental price is still declining at a larger annual rate in less expensive apartments.
The Manhattan vacancy rate has remained high, however, increasing from 5.75 percent in September to 6.14 percent in October. The share of vacant apartments is highest in downtown Manhattan, where 7.74 percent are empty, while in northern Manhattan, only 1.68 percent are vacant.
In Brooklyn, new leases surged as well, reaching their second-highest level in 12 years. As in Manhattan, concessions accompanied the new lease signings, with the market share of sweeteners reaching an all-time record. Net effective median rents also declined year-over-year for the fourth consecutive month.
According to the report, the northwest Queens market, which includes Astoria and Long Island City, lagged Manhattan and Brooklyn. The net effective median rent declined more sharply than it has in the past four years and apartment inventory increased to the second-highest in six years. New leases were down again year-over-year, as they have been for the past 15 months.
The good news for Manhattan and Brooklyn rental markets could be an early indicator for larger economic trends, Miller noted.
Renters fled the city in the spring, amid lockdowns and a dearth of the amenities and activities city dwellers are accustomed to. Those same renters, Miller said, may be the first to return — but rent prices could still come down more before the market stabilizes.
“In northwest Queens, continued declines in new leasing activity, high inventory and high concessions all suggest that pricing still has more room to slide,” said Miller. “We’re not flipping a switch. Just because we have one month of uptick doesn’t mean there isn’t more price weakness ahead.”