Douglas Elliman Releases October 2019 Rental Market Report for Manhattan, Brooklyn and Queens

11/14/19

In Tight Market, Rental Prices Are Up and Concessions Down Across the Board

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 October 2019 Rental Market Report for Manhattan, Brooklyn and Queens. The report indicates a tight rental market in New York City, with rising rents and falling concessions across all three boroughs.

In Manhattan, rental price trends pressed higher across all apartment sizes, particularly in new developments, and concessions declined for the seventh consecutive month. Results were similar in Brooklyn where rising demand resulted in the largest year-over-year drop in concessions so far this year. Net effective median rent in the borough also rose for the eleventh straight month.

“The rental market continues to show strength, with report results exhibiting high demand and high prices again this month,” said Hal Gavzie, Executive Manager of Leasing for Douglas Elliman Real Estate. “Soft sales conditions in the city are certainly helping to make the rental market tighter, and a drop in the signing of new leases also suggests that landlords are successfully retaining tenants upon lease renewal. Since rents are high market-wide and concessions becoming less compelling, tenants are motivated to re-sign their existing leases.”

A bit of an outlier in recent months, Queens trends aligned with those of Manhattan and Brooklyn in October. The borough saw an increase in net effective median rent for the first time in four months as well as a drop in the market share of landlord concessions for the third straight month—the most significant decline in six months.

“Trends in the New York City rental market have been very consistent throughout much of this year, but with Queens sometimes bucking those trends,” said Jonathan Miller, President and CEO of Miller Samuel Inc. and the author of the report. “Since potential buyers are still sitting out of the soft sales market, it’s not surprising that Queens finally succumbed to the market tightness we’ve been seeing in the other boroughs.”

MANHATTAN RENTAL MARKET HIGHLIGHTS
Overview

“Rental price trends pressed higher across all apartment sizes.”

- The vacancy rate has increased year over year for three straight months

- Median net effective median rent year over year growth appeared to have peaked in July

- The seven consecutive month with year over year declines in concession market share

- New development median rent continued to rise faster than the existing median rent

- Share of new leases at or above $10,000 expanded for the fourth straight month

- The luxury entry threshold hasn’t seen a year over year decline in 2019

- Median rental price moved higher year over year at all price strata

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price edged up 0.1% to $3,500

- Rental price per square foot rose 5.8% to $69.45
- Average rental price increased 4.5% to $4,287

(Net Effective Rent – includes concessions)
- Median rental price rose 0.7% to $3,409

- Share of new rental transactions with OP or rent concessions was 36.9%, down from 41%
- Size of concession was 1.2 months of free rent or equivalent, down from 1.3 months

- Manhattan vacancy rate was 2.03% up from 1.49%
- Number of new leases fell 12.5% to 4,236

- Listing inventory slipped 2.8% to 5,070
- Days on market was 26, down from 29
- Listing discount was 2.1%, unchanged

BROOKLYN RENTAL MARKET HIGHLIGHTS

Overview

“Rising demand resulted in the largest year over year drop in concessions for 2019.”

- Net effective median rent increased annually for eleven consecutive months

- Most significant year over year decline in concession market share for 2019

- The average size of a rental apartment rose across all bedroom categories

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price was $2,995 up 2.5%
- Rental price per square foot rose 1.7% to $48.30

- Average rental price rose 6.3% to $3,404

(Net Effective Rent – includes concessions)
- Median rental price rose 4.2% to $2,906
- Share of new rental transactions with OP or rent concessions was 34.6%, down from 43.1%
- Size of concession was 1.3 months of free rent or equivalent, down from 1.5

- Number of new leases fell 20% to 1,152

- Listing inventory fell 21.3% to 1,419
- Days on market was 25, down from 37
- Listing discount was 1.6%, up from 1.5%

QUEENS RENTAL MARKET HIGHLIGHTS

Overview
[Northwest Region]

“Net effective median rent rose annually for the first time in four months.”

- The market share of landlord concessions fell year over year for the third straight month

- Net effective median rent rose year over year for the first time in four months

- The most significant decline of concession market share in six months

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price rose 0.5% to $2,945
- Rental price per square foot declined 2% to $50.82

- Average rental price increased 3.1% to $3,165

(Net Effective Rent – includes concessions)
- Median rental price 2.4% to $2,853
- Share of new rental transactions with OP or rent concessions was 44.4%, down 58.2%
- Size of concession was 1.2 months, down from 1.4 months

- Number of new leases slipped 0.9% to 315

- Listing inventory declined 11.3% to 400
- Days on market was 21, down from 24
- Listing discount was 1.1%, up nominally from 0.7%

- New development market share was 40.3%, down from 42.8%

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 120 offices in New York City, Long Island, The Hamptons, Westchester, Connecticut, New Jersey, Florida, California, Colorado, Massachusetts and Texas. 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.

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