Prices Up, Landlord Concessions Down as Demand for Rentals Increases
Douglas Elliman Real Estate, the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume, today releases its April 2019 Rental Market Report for Manhattan, Brooklyn and Queens.
The report showed that rental price trends continued to rise in Manhattan and Brooklyn. In Manhattan, trends in the entry tier pressed higher, overpowering the high-end market. Concessions fell sharply, and net-effective median rent rose year-over-year for the fourth consecutive month. Concessions were also down in Brooklyn, where new leases rose for the fourth time in five months.
“With prices trends climbing and concessions continuing to decline, we’re seeing a strong demand for rentals as we head into the summer months,” said Hal Gavzie, Executive Manager of Leasing for Douglas Elliman Real Estate. “The weaker sales market is powering the rental market, as potential buyers are still camping out.”
In Queens, the median rent increased year-over-year for the fifth time in six months, and the number of new leases was also up. Market share of landlord concessions fell year-over-year for the second time in eight months, though the size of concession was unchanged. Listing inventory declined.
“We’ve been seeing a lot of consistency in rental market trends so far this year, and this month was no exception,” said Jonathan Miller, President and CEO of Miller Samuel Inc. and the author of the report. “As long as the sales market in New York City remains soft, rents will continue to rise with the increased leasing demand.”
MANHATTAN RENTAL MARKET HIGHLIGHTS
Overview
“Rental price trends in the entry tier pressed higher, overpowering the high-end market.”
- The net effective median rent rose year over year for the fourth consecutive month
- Landlord concession market share fell sharply, the third year over year decline in four months
- The vacancy rate edged higher year over year for the first time in eleven months
- Market share of leases above $10 thousand per month moved higher
- All luxury price trend indicators moved higher than year-ago levels
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price increased 3.7% to $3,479
- Rental price per square foot rose 2% to $68.09
- Average rental price increased 4.6% to $4,191
(Net Effective Rent – includes concessions)
- Median rental price rose 4.4% to $3,379
- Share of new rental transactions with OP or rent concessions was 36.9%, down from 44.3%
- Size of concession was 1.3 months of free rent or equivalent, unchanged
- Manhattan vacancy rate rose from 2.03% from 1.99%
- Number of new leases slipped 1.6% to 4,831
- Listing inventory fell 10.3% to 5,507
- Days on market was 29, down from 32
- Listing discount was 1.2% down from 1.4%
BROOKLYN RENTAL MARKET HIGHLIGHTS
Overview
“The decline in market share of rentals with concessions continued to accelerate.”
- The year over year change in the market share of concessions continued to decline
- New leases rose year over year for the fourth time in five months
- Net effective median rent increased annually for the fifth straight month
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price was $2,850 up 0.3%
- Rental price per square foot rose 1.1% to $45.95
- Average rental price rose 2.7% to $3,22
(Net Effective Rent – includes concessions)
- Median rental price rose 2.8% to $2,762
- Share of new rental transactions with OP or rent concessions was 38.1%, down from 51%
- Size of concession was 1.4 months of free rent or equivalent, down from 1.8
- Number of new leases rose 7.2% to 1,327
- Listing inventory declined 1.6% to 1,323
- Days on market was 23, down from 29
- Listing discount was 0.7%, down from 1.2%
QUEENS RENTAL MARKET HIGHLIGHTS
Overview
[Northwest Region]
“Landlord concession market share fell sharply from the year-ago record.”
- Market share of landlord concessions fell year over year for the second time in eight months
- Net effective median rent expanded year over year for the fifth time in six months
- Studio and 1-bedroom rental leasing grew as 2-bedroom rental leasing fell
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price was $2,850, up 1.1%
- Rental price per square foot slipped 2.8% to $49.90
- Average rental price increased 0.1% to $2,995
(Net Effective Rent – includes concessions)
- Median rental price increased 3.2% to $2,731
- Share of new rental transactions with OP or rent concessions was 45.3%, down from 65.1%
- Size of concession was 1.6 months, unchanged
- Number of new leases increased 4.8% to 285
- Listing inventory declined 8.9% to 471
- Days on market was 30, up from 25
- Listing discount was 0.5%, down from 0.9%
- New development market share was 32.6%, down from 47.4%
About Douglas Elliman Real Estate
Established in 1911, Douglas Elliman Real Estate is the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume. With more than 7,000 agents, the company operates approximately 118 offices in New York City, Long Island, The Hamptons, Westchester, Connecticut, New Jersey, Florida, California, Colorado and Massachusetts. Moreover, Douglas Elliman has a strategic global alliance with London-based Knight Frank Residential for business in the worldwide luxury markets spanning 60 countries and six continents. The company also controls a portfolio of real estate services including Douglas Elliman Development Marketing, Douglas Elliman Property Management and Douglas Elliman Commercial. For more information on Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, please visit elliman.com.
