The days where you could easily score a Manhattan apartment for under $3,000 may be almost over, but tenants have a plan: Sign longer leases.
As concessions fade and rents creep up in Manhattan, Brooklyn and Northwest Queens, tenants are signing longer leases to lock bargains in, according to the latest rental market report from Douglas Elliman.
In Manhattan, 9,491 new leases were signed in May, while Brooklyn saw 2,506 new leases. It was the highest number of new lease signings either borough had seen since 2008, and a strong sign that the pummeling the city’s rental market took during the pandemic is coming to an end.
In Northwest Queens — which includes Long Island City, Astoria and Woodside — 510 leases were signed. It’s the second-highest number of new leases signed in the borough, after last month’s record.
This surge in activity has pushed rents up. Median net effective rent, or rent that factors in concessions, was $3,037 in Manhattan in May, the first time the number crossed $3,000 since falling under that threshold in September.
In Brooklyn, net effective rent was $2,644 in May, and in Northwest Queens it was $2,304.
Tenants are signing longer leases to lock in the current rents while they still can. In December, 77.6 percent of leases being signed were for one year. In May, that number fell to 37.6 percent, according to Jonathan Miller, who authored the Elliman report. The average lease term in Manhattan was 15.6 months in May, compared to 13.3 months in February.
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“Tenants are showing through action that they don’t anticipate a sharp drop in rental prices in the near term,” Miller said. “They’re signing longer leases to lock in the savings.”
The same trend is playing out in Brooklyn, which had an average lease length of 15.1 months in May, compared to 13.6 months in February. In Queens, tenants signed an average lease length of 16.2 months in May, compared to 13 months in February.
That’s not to say that concessions have completely disappeared. The two months of free rent that landlords gave tenants in Manhattan was the third-highest it’s ever been. Though that’s 33 percent higher than it was a year ago, it’s a decrease from the 2.3 free months the borough saw in January.
In Brooklyn, the amount of free rent fell by 5.3 percent to 1.8 months in May. In Northwest Queens, that number fell 7.7 percent to 2.4 months.