Most New York City office workers were supposed to head back to their desks in September, but just the delta variant derailed those plans, it may have also hampered the city’s rental market.
August, like July before it, saw a decline in new lease activity compared to April, May and June, according to the latest report from Douglas Elliman compiled by Miller Samuel. It’s an inauspicious sign for landlords, as July and August typically see the highest levels of leasing activity in a given year, regardless of the strength of the market, noted Jonathan Miller, who authored the report.
“That suggests to me not that the rental market is slow, but the rental market did not maintain the same upward demand that it enjoyed in the early spring,” Miller said.
Still, Manhattan saw 8,201 new leases signed in August, a record for the month that beat last year’s total by 64 percent and 2019’s by 25 percent.
Such robust activity has soaked up listings: The number of available units has fallen to 8,364, down 68 percent from a January peak of 25,883.
Back then, it would’ve taken 2.3 months to sell all the units available. Now, it would take 1.9 months, still higher than the ten-year August average of 1.3 months.
In Brooklyn, 2,071 new leases were signed, also the most ever signed in August. In January, 20,492 listings were available, but that has since dropped 73 percent to 5,608. The average rent concession offered has also fallen to 1.5 months, inching closer to the 10-year August average of 1.3 months.
In the smaller market of northwest Queens, which is made up of Long Island City, Astoria, Sunnyside and Woodside, 549 new leases were signed, the second-highest in any month since December 2011. The record was set in April when 570 new leases were signed.
In January, a record of 3.4 months of concessions were offered in northwest Queens, on average. Now, it’s down to two months.
The busy rental market continued to dry up Covid discounts, but it still has a ways to go, Miller said.
Net effective median rent, or rent that factors in concessions, was $3,118 in Manhattan, an 8.9 percent decrease from August 2019. In Brooklyn, it fell 6.7 percent from two years ago to $2,722, and in Queens it fell 10.3 percent to $2,571.
“From a landlord’s perspective, the market is returning,” Miller said. “How quickly, we don’t know yet.”