The Real Deal New York

Rents in every segment of the Manhattan rental market fell in February: report

It’s the first time in nearly 5 years the borough has seen widespread declines
By Miriam Hall | March 09, 2017 08:30AM

666 West End Avenue on the Upper West Side

Dipping rents — a trend that has affected Manhattan’s high-end rental market for months now — is starting to seep into other segments of the market.

The median rent for every home-size category in Manhattan declined in February, according to the monthly rental report from Douglas Elliman. It’s the first time in almost five years that declines have been widespread across the borough.

The median rental price in Manhattan was $3,260 last month after concessions, a year-over-year decline of 1.7 percent, the report showed.

“I think part of this is just rent fatigue,” said Jonathan Miller.“The general trend is coming from record high rents to something that’s more in-sync with what consumers can afford.”

The median rental price for Manhattan studios was $2,500 in February, a year-over-year drop of nearly 7 percent. For one-bedrooms, the median price fell 1.3 percent to $3,350. Two-bedrooms hit $4,500, a drop of more than 5 percent, while the median rent for three-bedroom homes was $6,031 — a drop of nearly 4 percent when compared to this time last year.

Brooklyn, which has experienced an abundance of luxury rental product, also saw widespread declines last month. However, median rent decreases across all sectors of the Brooklyn market is much more common than in Manhattan.

“Brooklyn was later to see declines, but then fell faster,” said Miller of the rental prices in the borough.

The median rental price in the borough was $2,715 in February, a year-over-year decline of just over 1 percent. For studios it was $2,363, while the median rent for one-bedrooms was $2,600. The median rent for two bedrooms dropped more than 5 percent to $3,000, while median rent for three-bedrooms and above was $3,488 — a fall of 1.2 percent.

In northwest Queens, a market that Miller has described as “choppy,” the median rent was $2,800, a fall of 5 percent.

For months, landlords in the city have relied on renters’ incentives to keep vacancies at bay. The report showed concessions still made up significant share of new leases signed in Brooklyn, Manhattan and Queens, but not quite at levels seen in previous months.

A separate report from Citi Habitats found 31 percent of new Manhattan leases included a move-in incentive during February — down from 37 percent in January.

“[Landlords] may have been emboldened by the declining vacancy rate from December to January — as a result, they pulled back their use of concessions slightly last month,” said Gary Malin, president of Citi Habitats. “There is simply a lot of inventory available.”