search

The Real Deal Logo

Trending

Glossier founder is buyer of $22M Brooklyn townhouseGlossier founder is buyer of $22M Brooklyn townhouseHousing deal finally passes; here are the detailsHousing deal finally passes; here are the detailsBushburg buying Rudin’s half-empty FiDi office building for $160MBushburg buying Rudin’s half-empty FiDi office building for $160MDevelopers have a new tax break. Now they must figure it outDevelopers have a new tax break. Now they must figure it out
Residential
New York

Winter is coming for luxury: Flood of supply will likely end apartment boom in 2017

Rent growth is slowing and concessions are on the rise

Jon Snow (credit: HBO) and a vacant luxury home
Jon Snow (credit: HBO) and a vacant luxury home

After years of tremendous rent growth, an incoming glut of luxury apartments will likely force more landlords to cut prices and offer concessions this year.

In 2016, rents in the U.S. climbed 3.8 percent, a modest increase compared to the 5.6 percent jump seen in the third quarter of 2015, according to a new report by MPF Research. This lackluster increase follows the more than 26 percent increase in U.S. apartment rents seen since early 2010, the Wall Street Journal reported.

Sign Up for the undefined Newsletter

The reason for the slowdown, MPF Vice President Jay Parsons told the Journal, is the deluge of high-end apartments that are coming onto the market.

The number of new luxury apartments seems to be outpacing the number of prospective renters. The New York area will see roughly 30,000 new apartments this year — double the historical average. About 85 percent of the apartments will be luxury units. Across the country, more than 378,000 apartments are expected to be completed in 2017. Developers in New York are already offering three months of free rent in some new projects and are expected to continue offering significant concessions.  [WSJ] — Kathryn Brenzel