Tenants sign leases in record numbers but rents stay down

Renters were out in force in Manhattan and Brooklyn again last month, as rents continued to slide and concessions from landlords rose.

In Manhattan, tenants inked new leases in numbers not seen in 12 years, according to Douglas Elliman’s monthly rental report. More than 4,000 new leases were signed in the borough in November, a 30 percent year-over-year jump from about 3,100 the year before.

The borough’s rental inventory is the third-highest on record with 15,130 apartments on the market. The median net effective rent was down nearly 22 percent year-over-year to $2,743, compared to $3,502 last year. Real estate appraiser Jonathan Miller, who authors the report, said that was the highest rate of decline he has ever tracked in Manhattan.

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The share of new leases signed last month with concessions was almost 57 percent, compared to about 39 percent a year ago. Vacancy in the borough was flat at 6.14 percent.

In Brooklyn, new leases signed last month were up nearly 28 percent, with 1,122 deals compared to last year’s 878. LIke Manhattan, it was the busiest November for leasing activity in the borough in 12 years.

The median net effective rent in Brooklyn was $2,619, down 8 percent from $2,855 a year ago. Inventory also remained elevated with more than 4,130 apartments on the market, a nearly 170 percent jump from the prior year’s inventory of 1,535 units.

Miller acknowledged that the uptick in leasing activity, in combination with a drop in both boroughs’ inventory compared to October, “begs the question: Does this mean that rents are going to level off soon?”

The appraiser said November’s report represents a “turn” for Manhattan and Brooklyn, but he stressed that “it’s relatively nominal.”

In Northwest Queens, new leases fell off last month, with just 183 deals, down 21.5 percent compared to a year ago. Like the other boroughs, the median net effective rent also dropped to $2,275, down 21 percent from $2,878.

Inventory in the area was up more than 50 percent from a year ago with 603 apartments on the market, compared to the 399 units listed in November of last year.

Miller maintained his position that the city’s rental market would recover when vaccines against the novel coronavirus are widely available.

“This is a V-shaped recovery — as in V for vaccine,” he said.