As home sales remain rocky, owners of rental properties are continuing to cash in on all the buyers who are waiting out the market. This is being seen by rents that have steadily climbed throughout August, according to two new residential market reports.
A report by Citi Habitats and another by Douglas Elliman showed that rents rose across the board in Brooklyn and Manhattan and move-in incentives declined compared to July.
Conversely, the vacancy rate went up, albeit slightly for the second month in a row, after falling for the past six months, Citi Habitats found. In August, the Manhattan vacancy rate was 1.17 percent, up from July’s rate of 1.11 percent, which is unusual for the busy summer season.
Meanwhile in Queens, the median rental price declined for the second straight month and for the third time this year. With concessions down, the number of new leases also fell in the borough.
Median rental price decreased 1.9 percent to $2,866. Thirty-six percent of leases had concessions, which was down from 38.6 percent, but the size of concessions went up to 1.5 months up from 1.1 months. Days on market was 29, up from 22.
“Queens continues to separate itself a bit from the more consistent growth trends in the Manhattan and Brooklyn markets,” said Jonathan Miller, president and CEO of Miller Samuel Inc. and the author of the Douglas Elliman report. “It will be interesting to see if the Queens market syncs up with the other boroughs as we close out 2019.”
For Manhattan, studio, two and three-bedroom apartments all increased by 1 percent from July to August, while pricing for one-bedrooms rose 3 percent.
In Brooklyn, pricing rose one percent for studio and one-bedroom homes. Two and three-bedroom units saw average rents rise by two and three percent, respectively.
Breaking down rents by apartment size Citi Habitats found that in August, the average monthly rental price for a Manhattan studio was $2,632. For one-bedroom homes, the average was $3,534. For two-bedrooms, the average rent was $4,462. The average three-bedroom apartment rented for $5,985. Brooklyn studio apartments (in 14 neighborhoods studied) rented for $2,559 per month on average.
For Brooklyn one-bedrooms, the average rent was $3,166 while rents for two and three-bedrooms were $4,223 and $5,528 respectively.
While both reports said this was obviously good news for owners, their authors differed on whether or not this trend would last.
Hal Gavzie, executive manager of leasing for Douglas Elliman Real Estate, was more bullish.
“This has been a great year for the rental market, and this month was no exception,” he said. “While landlord concessions are still relatively high, they have been steadily falling over the past few months as rentals in New York City continue to be buoyed by the weaker sales markets in the region. It looks like the trend of rising price growth in Manhattan and Brooklyn will continue through the end of the year and beyond.”
But Gary Malin, president of Citi Habitats, said it’s important to remember the cyclic nature of residential real estate, as leasing always slows down after Labor Day.
“Overall, landlords continued to have the upper hand in the city’s rental market during the August ‘busy season,’” Malin said. “While the vacancy rate is still comparatively low, the resulting uptick in inventory shows just how fragile the market is for renters. If they can wait it out, apartment-seekers may face less daunting conditions in the coming months. In fall, there is traditionally less demand – and more value to be had for tenants.”