Pick a New York City borough: rents are falling, and fast
Here's some good news for New York City apartment hunters: Manhattan rents dropped 3.8% in March from a year earlier, the most since 2011.
The news is even better for tenants looking in Brooklyn and northwest Queens. Rents dropped 6.3% and 6.4%, respectively, and landlords offered so many move-in incentives that they set records for giveaways, according to reports Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
"For the renter, it's a pretty good time to jump in," said Hal Gavzie, Douglas Elliman's executive manager of leasing. "For the landlords, it's a little stressful."
Property owners across the three boroughs are contending with an avalanche of new apartment supply, giving them no choice but to cut prices. They're stepping up discounts in the name of attracting renters, who are hunting as much for the best deal as they are for a place to live.
And that's not a bad thing for the market, Gavzie said.
"This is what has to happen," he said. "It will help absorb quite a bit and will do the adjustment and reset that’s needed."
Here's what the rental market looked like across the three boroughs last month:
The number of newly signed leases plunged 27% from a year earlier, to 3,489. Net effective rent, or what tenants paid after incentives are subtracted, fell 3.8% to a median of $3,168. It was the biggest annual decline since October 2011. Forty-two percent of all new leases came with a landlord concession, such as rent-free months or payment of broker’s fees. The combined neighborhoods of Soho and Tribeca had the biggest rent decline — 12%, to a median of $5,300, brokerage Citi Habitats said it its own report.
Sweeteners were offered in 48% of new leases — a record share. In March 2017, the portion was just 16%, Miller Samuel and Douglas Elliman said. Net effective rents fell 6.3% to a median of $2,629. It was the fourth consecutive month of year-over-year declines. The biggest rent drop was in Dumbo, where the median slid 9.6% to $4,700, Citi Habitats said.
In the borough's northwest section — Long Island City, Astoria, Sunnyside and Woodside — a record 63% of new leases included concessions, Miller Samuel and Douglas Elliman said. The rate was 91% for deals at new developments, said Jonathan Miller, president of Miller Samuel. The value of the incentives doubled from a year earlier, to the equivalent of 1.8 months of free rent on average. The net effective rent fell 6.4% to a median of $2,559.