The number of rentals on the market in Manhattan surged last month, but prices in the borough continue to basically flatline.
Median residential rents hit $3,400 in May, up just 0.6 percent year-over-year and down 0.4 percent decrease from April, according to a new report released by Douglas Elliman. Meanwhile, listing inventory shot up to 6,718, a year-over-year increase of 21.2 percent.
For the past two years, rents in Manhattan have steadily grown. But that upward climb came to a halt in March, when median rents fell 2.8 percent to $3,300. Prices bounced back slightly in April, continuing what Jonathan Miller, author of the Elliman report, termed the borough’s “sideways” trajectory. The price growth in the borough can be primarily attributed to the entry-level to mid-tier rentals (whose median rents were $2,360 and $3,249, respectively), since supply of these properties is limited, Miller said.
The influx of new development is primarily made up of upper-tier and ultra-luxury rentals, markets that are softening. While in previous months the price jumps in the lower tiers and the decline in luxury prices yielded an overall rental increase, that is no longer the case.
“They don’t offset each other equally anymore,” Miller said. “The upper end of the market is soft and there’s more price growth in the balance, in the bottom 60 percent. That’s been the pattern.”
In Brooklyn, however, the tale was quite different. Median residential rents increased for the fifth month in a row, jumping to $2,874. This represented a 4.5 percent year-over-year increase and a 3.4 percent increase from April. The number of rentals on the market also saw a hefty increase. Listing inventory rose to 2,016, a 20.6 percent year-over-year increase. Most of the price growth is in the luxury rental sector, which saw a 2.1 percent year-over-year increase. The median rental price for new development, however, dropped 1.3 percent from last year, according to the report.
Over in Queens, more than half of the rental units are now in new developments, Miller said, and that change helped drive median rents up 5 percent year-over-year, to $2,727.