Manhattan rents jumped and lease signings soared in Brooklyn and Queens last month.
Renters signed more November leases in the two outer boroughs than they have in more than a decade, according to a report by appraisal firm Miller Samuel for Douglas Elliman.
Brooklyn renters inked 1,361 leases, up 21 percent from last year and 55 percent from November 2019. In Northwest Queens, 369 leases were signed, up 102 percent from last year and 58 percent up from the year prior.
In Brooklyn, net effective median rent, which factors in concessions, was 4.5 percent higher than last year at $2,737. In Northwest Queens, it was 10 percent higher at $2,504.
Leasing activity fell by 18 percent in Manhattan, but rents rose at the fastest rate on record. Net effective median rent was 23 percent higher than it was last year — $3,369.
The price surge brought Manhattan rents to within 4 percent of its pre-pandemic level. Higher-priced apartments are now above where they were before Covid.
rnrn“The metrics are improving for landlords faster than anyone on the planet expected.”rnrn
Net effective median rent for Manhattan units with a doorman was up 27 percent year-over-year, a record growth rate. The net effective median rent of $4,108 exceeded pre-pandemic levels by 2.3 percent.
Units without a doorman, which skew to the lower end of the market, had a median net effective rent of $2,584. That’s 11 percent higher than a year ago, but 12 percent lower than in 2019.
“The high end of the rental market, like the purchase market, is outperforming the balance of the market,” said report author Jonathan Miller. “That’s an inversion from pre-pandemic patterns.”
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Concessions in Manhattan have disappeared at record rates for the past four months. New leases with concessions made up just 25.8 percent of the market in November. A year ago 56.6 percent of leases included concessions.
And concessions themselves are not as sweet as they were. They averaged 1.5 months of free rent last month, down from 2.1 free months in November 2020. They still exceed the pre-pandemic average of 1.2 months in November 2019, but the gap is narrowing.
“All the metrics in the rental market are tightening and improving for landlords faster than anyone on the planet expected,” Miller said, adding that it isn’t a total surprise given that employees were expected to return to the office in September, though variant concerns have pushed the timeline back.
The vacancy rate in Manhattan was just over 2 percent, as it was in October, but it has plummeted by two-thirds in the past year, the largest annual drop on record, Miller said. The borough had only 6,187 rentals available in November, a 59 percent drop from last year and a 76 percent drop since January, when listings peaked at 25,883.
Things were different in Brooklyn and Northwest Queens: Brooklyn had 3,864 units available, a modest 6.5 percent drop from a year ago, whereas Northwest Queens had 793, an uptick of 32 percent.
The market shift has resulted in a return to normalcy in terms of lease length, as tenants gained confidence in the city’s recovery and the price hikes it would bring. In Brooklyn, 24 percent of leases signed were for one year and 73 percent were for two years. That’s a reversal from last year, when 70 percent of leases were for one year and 25 percent were for two years.
In Northwest Queens, 15 percent of leases were for one year and 83 percent were for two. Last year, 85 percent of leases were for one year and 15 percent were for two.
“Tenants out there have a clear understanding that rents are rising and will continue to rise, so they’re locking in the longer term to enjoy the savings, whereas early on, they would [sign] shorter leases because they thought rents would continue to fall,” Miller said.