While the use of concessions remains high within the rental markets of Manhattan, Brooklyn and Queens, recent market data shows that rents remain high in all three of them and that concessions may soon become a thing of the past. Therefore, for anyone who is hoping to find a more affordable apartment in the area, chances are slim to none in finding one. Furthermore, the lack of affordable apartments coming to the market in certain areas, particularly in Manhattan, continues to put pressure on lower-priced inventory resulting in additional increases in median prices.
A Growing Trend in Queens
According to recent data, the median rent in the northwest section of Queens increased to $2,998 in July, representing an 8.3 percent increase when compared to the same time the previous year. This isn’t too surprising considering that more than one-third of the apartments coming onto the market tend to skew more toward the luxury end. The housing itself is also higher quality, which brings higher prices with it.
The use of concessions has also increased significantly over the past year. In fact, the rental market saw a five-fold increase in the use of concessions when comparing this July to last July. In Queens alone, nearly 41 percent of new leases in July included a concession such as free rent.
Lowering Rents in Brooklyn
The picture is somewhat different in Brooklyn where the median rent when excluding concessions dropped over one percent to $2,795 when comparing year-over-year data. As a result, the median cost of rent in Brooklyn is lower than in northwest Queens, though studios did see an increase in median rent from $2,181 to $2,493. The fact that the median cost of rents in Brooklyn are lower than those in Queens can be largely attributed to the fact that many of Brooklyn’s rentals are not new.
On the other hand, the use of concessions did set a record high for July in Brooklyn. Overall, rental properties are offering an average of 1.4 months of free rent or the equivalent as concessions. Concessions are not likely to match the highs of Manhattan, which was offering about 1.5 months of free rent or the equivalent in 2015 when the use of concessions first kicked in, as the borough’s market is showing signs of softening.
A Mixed Bag in Manhattan
For the month of July, the median rent for entry-tier apartments in Manhattan increased to $2,400 from $2,344 the same time the year before. During this same period of time, the median rent for doorman buildings fell to $3,837 as the median rent for non-doorman building rental costs rose to $3,000. The median rent for Manhattan luxury tier apartments also fell from $7,889 to $7,875.
Concessions also appear to be topping out in Manhattan, with tenants showing a decreased interest in renting an apartment that they can’t afford without the help of concessions. In fact, recent data shows that while concessions did increase from 19 percent of leases to 24 percent when comparing year-over-year data, they fell from 28 percent in June to 24 percent in July this year.