Landlords in Brooklyn and Queens are still obsessed with concessions.
In Brooklyn, the market share of rental concessions hit a record for a third consecutive month in February, tying its number from the prior month at 47.5 percent, according to a report from Douglas Elliman. Median rent in the borough slipped by 0.3 percent to $2,743 year over year, and when concessions were included, the decline hit 3.1 percent for a median rent of $2,632.
In northwestern Queens, the market share of rental concessions hit its third highest point at 48.8 percent, up from 39.5 percent last February. However, the median rental price increased by 1.8 percent to $2,850. With concessions included, that number dropped by 1.2 percent to $2,714.
The length of free rent concessions in Brooklyn remained unchanged year over year at 1.4 months, but in Queens, it doubled, reaching 1.6 months.
“The concessions being offered are at or near record levels, depending on the borough, but we’re also seeing face rents decline across the borough for most of the indicators,” he said. “So it’s still an issue of excess supply.”
This was the third consecutive month of year-over-year decline of net effective rent in Queens and the ninth time in 10 months that net effective median rent fell in Brooklyn. Price per square foot fell in both boroughs as well, dropping by 2.4 percent to $44.42 in Brooklyn and by 1.2 percent to $46.77 in Queens.
However, the number of new leases signed continued to surge in both boroughs. In Brooklyn, the number rose by 15.1 percent year over to year to 1,091, and in Queens, it jumped 35 percent to 301. The market share of studio and one-bedroom apartments increased in Brooklyn, while the market share of two- and three-bedroom apartments shrunk.
Listing discounts actually dropped to 1.7 percent from 2.3 percent in Brooklyn and to 0.6 percent from 1.7 percent in Queens. Apartments in both boroughs stayed on the market for shorter periods of time as well, falling from 53 days to 31 in Brooklyn and from 38 to 29 in Queens.
Miller said New York City will likely continue to see a high supply of new rentals going forward, so he expects landlords to continue offering concessions for the next few years.
New developments are being “too aggressive” with their base rents, he said, “and so they’re offering concessions to keep the base rent high.”