July proved to be another strong link in the chain for the Manhattan, Brooklyn, and Queens rental markets according to reports from Douglas Elliman.
There is an obvious catalyst for the markets strong price points and rising demand.
“There’s a supply issue,” said Luciane Serifovic, Elliman’s Director of Rentals. “That’s pushing rents higher than before.”
But the shrinking surplus of land in the boroughs is hardly a new development.
Serifovic believes that another factor is contributing to the healthy rental market as well, pointing to “improving economic conditions” as a main contributor.
Serifovic suggests that the promising numbers are an earmark of a still healing economy.
“When the economy improves, it improves in so many factors slowly,” Serifovic told Real Estate Weekly. “But I think In Manhattan is where the biggest relief happens.”
As they have since February, prices continued to climb in Manhattan, reaching the highest July price point in six years and a median rental price of over $3,200. Vacancy in the borough dipped, with listing discounts hovering at a six year low.
The number of new rentals forged upwards by 7.2 percent to reach 4,938 while the vacancy rate fell to 1.82 percent as opposed to last summer’s 1.94.
Tenants are paying about $51 per square foot for units on Manhattan.
According to Elliman, the wealth was spread throughout the city.
For the 14th consecutive month, median prices in Brooklyn rose. The going rate for smaller apartments climbed and landlords have not found themselves offering concessions often. Compared to July 2013, Brooklyn saw a 127 percent jump in new rentals with 892, and an average price sit 2.5 percent higher at $3,111.
The story is similar in Queens with the price per square foot of space rising by 20.3 percent from July 2013 to $42.42. The median rental prices for apartments in the borough tapped $2,646, a 10.5 percent increase from the previous year. Approximately 1 out of 4 new rentals were of units in recently developed buildings.
Serifovic believes that as the economy continues to strengthen we may see slightly more modest rental numbers and higher home purchases, but for now the current trends make perfect sense.
“To obtain a mortgage is not at easy as it used to be,” said Serifovic. With higher qualification standards following the housing bubble, New Yorkers find themselves needing to provide more money down than perhaps they would have in 2007 or 2008 when purchasing a home.