Concessions are still the name of the game in the outer boroughs.
Offering tenants a period of free rent remains extremely popular in Brooklyn and Queens, according to Douglas Elliman’s November rental market report for the boroughs. In Brooklyn, concessions rose year-over-year for the 22nd consecutive month, and in Queens, their market share reached its highest level since the beginning of 2016.
The share of new Brooklyn leases with concessions in November was 18.6 percent, up from 15.4 percent last November, but their length actually dropped slightly from 1.6 months to 1.3 months. Median rent in the borough dropped by $40 once concessions were factored in, falling from $2,795 to $2,755, according to the report.
In Queens, the share of new leases with concessions shot up from about 36 percent in November 2016 to 44.5 percent this November, and their length increased as well, going up from 0.8 months to 1.2 months. Median rent in the borough was $2,600 but dropped to $2,517 once concessions were included, according to the report.
Real estate experts have voiced skepticism about the popularity of concessions before, noting that many tenants will not be able to afford their apartments once the lease with concessions expires. They’ve predicted that base rents will eventually have to come down. Jonathan Miller of appraisal firm Miller Samuel, the author of the report, said that despite their continued popularity, concessions have started stabilizing overall.
“It’s more of a continuation of what we’ve been seeing for the last three or four months,” he said, “which has been concessions continue to be flirting with historical highs, but they’re not rising.”
However, net effective median rent in Brooklyn actually went up slightly in November year-over-year for the first time in six months, ticking up from $2,738 last November to $2,755 this year. It went up in Queens year-over-year as well, but only nominally, rising from $2,511 to $2,517.
Year-over-year leasing activity went in the opposite direction in the two boroughs. In Brooklyn, the overall number of new leases dropped from 1,047 to 996 and declined for every type of apartment except three-bedrooms—and even those barely increased at all, rising from 127 last November to 129 this November.
Overall leasing in Queens went up year-over-year from 195 to 247 with increases in every type of apartment ranging from studios to three-bedrooms.
Inventory was down in both markets year-over-year, falling from 2,606 to 2,194 in Brooklyn and from 616 to 587 in Queens, according to the report. The 15.8 percent drop in Brooklyn was even larger than October’s year-over-year comparison, when inventory dropped by 11.9 percent.