Money & The Economy

Strong Demand Pushes Up New York City Rents Ahead of Peak Rental Season

Ahead of peak rental season, apartment shoppers can expect to see slightly higher rent prices than last year, particularly in areas with lower-priced homes, according to StreetEasy’s April 2018 Market Reportsi. However, those searching for rentals at higher price points and in areas of the city with large quantities of new development are likely to have greater negotiating power.

In Manhattan, rents increased in all submarkets, and rose 0.9 percent borough-wide to $3,159 per month, according to the StreetEasy Manhattan Rent Indexii. In Upper Manhattan, where rents are the lowest of any submarket in the borough, rents increased the most: up 3.0 percent to an all-time high of $2,313.

The StreetEasy Rent Index in Brooklyn also rose year-over-year and is up 1.3 percent (or $33) to $2,559North Brooklyn was the only submarket where rents did not increase; prices there remained unchanged since last year. In Queens, rents declined for the seventh straight month and are down one percent (or $18) since last year to $2,109, driven in large part by large volumes of new construction in Long Island City and Flushing.

“With the city’s economic growth continuing to outpace national growth, demand for affordable homes is pushing up rents at a time when many New Yorkers are thinking about whether to sign new leases or renew their current ones,” said StreetEasy Senior Economist Grant Long. “Even with large amounts of new rental construction, renters should expect rising rents in some of the most affordable pockets of the city, though will still be in a better position amid a generally weak market relative to recent years. Moreover, landlords in parts of the city like Downtown BrooklynLong Island City, and Midtown are open to negotiation and willing to offer concessions and free perks.”

See below for additional sales and rental market trends across ManhattanBrooklyn and Queens.

April 2018 Key Findings  Manhattan

  • Rental discounts rose the most in Midtown. Eighteen percent of apartments in Midtown are offering discounts, an increase of 3.0 percent year-over-year. Rent cuts fell in three submarkets: dropping 1.8 percent in the Upper West Side, 0.4 percent in the Upper East Side and 1.6 percent in Downtown Manhattan.
  • Manhattan home prices rose. The StreetEasy Manhattan Price Indexiii increased 1.0 percent to $1,173,435. After a period of falling prices, the Upper East Side StreetEasy Price Index increased 3.8 percent since last year to $1,059,064.
  • Manhattan homes offered the most price cuts. In the borough15.5 percent of homes had their prices cut, a 4.6 percent increase over last year.
  • Sales inventory rose by double digits. Inventory grew 12.4 percent since last year. The Upper East Side saw the biggest increase: up 14 percent year-over-year.
  • Manhattan homes spent longer on the market. The median days on market increased to 61 days in Manhattan – up three days since last year. Homes in Downtown Manhattan spent 67 days on the market – up 12 days since last year. Homes in the Upper West Side spent three less days on the market, as buyers took advantage of previously falling prices and discounts.

April 2018 Key Findings  Brooklyn

  • Rents stagnated and discounts rose in North BrooklynNorth Brooklyn was the only submarket that didn’t see a change in rent prices since last year. The StreetEasy North Brooklyn Rent Index remained unchanged since last year at $3,041. Twenty-two percent of rentals in North Brooklynwere discounted, a 4.1 percent increase over last year.  
  • Prospect Park rentals offered the fewest discounts and tightest inventoryRents in Prospect Park grew by 1.3 percent since last year to $2,635. Just 12 percent of rentals in Prospect Park had their prices cut – a 2.6 percent annual decrease. Rental inventory dropped the most of any submarket: down 25.7 percent year-over-year.
  • Sales prices stagnated. The StreetEasy Brooklyn Price Index remained unchanged since last year at $741,705.
  • Sales inventory at an all-time high. Inventory increased 22 percent since last year to a new high.
  • Price cuts are up. Compared to last year, 10.8 percent of homes in Brooklyn had their price cut, which is a three percent increase year-over-year. Northwest Brooklyn saw the highest share of price cuts at 13.3 percent.
  • Prices rose in North Brooklyn, despite L train shutdown. Prices rose 12.4 percent in North Brooklyn, reaching $1,139,559 and making it the borough’s most expensive submarket. Prices in Northwest Brooklyn fell the most in the borough: down 9.1 percent to $1,097,873.

April 2018 Key Findings  Queens

  • Rents dropped across Queens but rose in Central Queens. Rents in Queens dropped 1.0 percent year-over-year to $2,109. In Central Queens, rents rose 2.0 percent over last year to $2,082.
  • Sales prices rose across Queens. The StreetEasy Queens Price Index reached $526,113, a 7.0 percent increase over last year. Prices grew the most in Central Queens: up 8.4 percent to $520,353.
  • Sales inventory rose across the borough, reaching a new high in Northwest QueensThe amount of homes on the market increased in Queens by 49 percent year-over-year. Central Queens inventory rose by 45.2 percent, while Northwest Queens inventory rose 33.5 percent – reaching a new high.
  • The number of homes offering price cuts rose ahead of home shopping season. Nine percent of homes for sale in Queens offered price cuts – a 3.0 percent increase over last year. All submarkets experienced an increase in discounts, with Northwest Queens homes offering the most at 16.2 percent, a 7.3 percent increase year-over-year.

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Carl Fox

Carl Fox is the senior money and finance writer for Conservative Daily News. Follow him in the "Money & The Economy" section at CDN and see his posts on the "Junior Economists" Facebook page.

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