The rental market in Manhattan and Brooklyn is on the upswing, particularly when compared to where things were a year ago, when the coronavirus pandemic was first raging through the city.
The number of new leases signed in Manhattan dropped by 24 percent month-over-month, but was up by 89 percent from the same time last year, according to Douglas Elliman’s most recent rental market report. Thirty-four percent of those leases came with some sort of concession from the landlord.
The month-over-month change in net effective median rent — or the median rent that factors in concessions — has risen in Manhattan for the fourth straight month, according to appraiser Jonathan Miller, who authors the Elliman report. This usually happens closer to summertime, offering an early sign that things are getting back on track, he said.
“The market is beginning to pivot, but I wouldn’t pronounce that prices are going to come back up yet,” Miller said.
All of the other metrics the report tracks are still relatively weak, though not as weak as they were a few months ago. The borough’s median rent was $3,098, 13.7% lower than it was last March. If you include concessions, it was $2,975. The average concession is roughly 2 months of free rent, down from January’s all-time high of 2.3 months. And while inventory has dropped slightly from last month, there are still close to 20,000 apartments on the market.
“Numbers are coming off the high water marks, but [the market is] still soft,” Miller said.
The story was similar in Brooklyn, where the median net effective rent is $2,612, or 3.5 percent higher than it was in February. New leases signed in the borough were up 76 percent year-over-year, according to the report. Listing inventory increased dramatically from the same time last year, from 1,216 available units to 17,558.
The high leasing numbers are fueled by people finding new apartments where they can get more bang for their buck around the city. People moving back to New York also plays a role, but it’s a “wild card,” Miller said.
“It’s really determined by how safe people feel,” Miller said. As more Covid-19 vaccines are administered, more people will likely return to the region. But the biggest indicator will be when corporate America calls workers back to their offices.
“That will be a key driver in accelerating inbound migration into the city and the rental market,” Miller said.
Northwest Queens saw 18.5 percent fewer new leases signed in March compared to last year. It also saw a decline in concessions offered, down to 2.1 months of free rent from February’s 2.3 months. The median rent is $2,400, a nearly 17 percent decrease from this time last year.
One reason for the dip could be because neighborhoods like Long Island City and Astoria have lost their competitive edge. Their proximity to Manhattan was once a selling point, but that borough’s discounts may be luring renters away from Queens.