The average rental price in Manhattan rose sharply last month, according to newly released data from Douglas Elliman. Net rents in the district rose 8.8% from April, while prices in Brooklyn rose a comparatively modest 1.1%. The prices in both districts are still reduced by the order of 10% compared to the previous year.
Driven by returning college students and office workers, rental activity continues to pick up in New York City, setting a potential record number of leases this summer. More leases were signed in Brooklyn and Manhattan last month than in any May since Douglas Elliman started the chase in 2008.
“Overall, the landlords are not that aggressive [with discounting] as they once were, but it didn’t work [rental] Speed, ”says Gary Malin, Corcoran Group’s Chief Operating Officer. “We started the summer of 2021 with more choices for apartment hunters, who sometimes had to pay more to secure a new home.”
Despite the gains, property owners continue to plague an oversupply of inventory who are beginning to re-offer apartments that they had held back from the market due to low prices. In the short term and in selected areas, the tenants still have the upper hand. “With over 20,000 offers available in the 5 boroughs, tenants still have great bargaining power,” says Allia Mohamed, co-founder and CEO of openigloo, a startup that helps tenants find buildings and landlords.
Currently, the highest vacancy rates in Manhattan are in Midtown East (5.9%) and the East Village and Lower East Side (5.4%), according to Corcoran Group data. The Financial District and Battery Park City are the lowest (2.61%), along with Greenwich Village and West Village (2.79%).
In some hotspots, like the Village and SoHo, the extreme competitiveness has given landlords back the advantage. Brokerage fees are experiencing a comeback, and real estate agents sometimes receive more than 100 inquiries on the first day an apartment comes on the market. “New offers coming to market in high-demand NYC neighborhoods like Tribeca, SoHo, the Village, and coveted Brooklyn neighborhoods are getting rents before – or close to – COVID,” said Hal Gavzie, executive director of leasing at Douglas Ellimann .
The latest report from Elliman shows that Manhattan has the biggest discounts in studios and one-bedroom apartments, where average rents have fallen by 14.8% and 11%, respectively. Larger units are discounted by less than 8% in total.
It’s the opposite trend in Brooklyn. Prices for smaller apartments are within reach of prices from 12 months ago, but units with at least two bedrooms are discounted by more than 12%. The hottest parts of Brooklyn, like Boerum Hill and Cobble Hill, have become hugely competitive, and it’s common for home owners to receive five or more listings on one listing.
Queens, for its part, remains sharply reduced across the board, with median prices falling between 12.9% and 22.9% depending on the size of the apartment. The community hopes for a recovery in summer and autumn.
Sales activity is also booming for those who do not participate in the leasing market. Corcoran reports that 1,600 contracts were signed last month, the highest number in May since 2007. And similar to rentals, it’s a seller’s market in the hippest neighborhoods.