For the first time in nearly a decade, the median asking rents for a Manhattan apartment has fallen below $ 3,000 a month as vacancies rise and tenants re-prioritize in the midst of the coronavirus.
The third quarter also marked the first time Manhattan, Brooklyn, and Queens saw year-over-year rents since 2010, according to a new report from listing website StreetEasy. The median monthly rent in Manhattan fell to $ 2,990, a decrease of 7.8 percent. $ 2,599 in Brooklyn, down 2.5 percent; and $ 2,200 in Queens, down 2.2 percent.
"This is the first of many milestones being turned on its head in relation to Manhattan's rental market," said Nancy Wu, a StreetEasy economist, of the declines, noting that prices are likely to continue falling due to rising inventory levels. if not fundamental changes in tenant habits.
Of all the boroughs, Manhattan has the highest proportion of wealthy, mobile tenants, many of whom have chosen not to renew leases during the pandemic, and the once reliable stream of newcomers who have paid a premium for being close to the Midtown offices slows down. Ms. Wu said.
Nearly 16,000 listings were available for rent in Manhattan last month, a 14-year record and more than triple the inventory level for the same period last year, according to a recent report by real estate agent Douglas Elliman.
StreetEasy saw a similar increase in new vehicle registrations this quarter, helping to increase the median discount on rentals in Manhattan to 9.1 percent from the original asking price, up from 3.9 percent last year. This equates to a monthly discount averaging $ 272.
It's likely that the actual price drops will be even deeper as landlords hardly ever disclose the final negotiated rent, said Bill Kowalczuk, a Warburg Realty-affiliated broker. In the absence of treatment or a vaccine for the virus, these cuts are likely to deepen despite landlords' reluctance.
"I don't think you can believe this is actually happening," he said. "How could I have got $ 5,000 two years ago and now nobody wants it for $ 3,500?"
While inventory levels have also increased significantly in Brooklyn and Queens, prices have not fallen as dramatically there – and in some cases prices are flat or rising due to a lack of affordable options elsewhere in the city.
In the third quarter, rents in Brooklyn fell year after year for the first time in a decade. The 2.5 percent drop in prices, however, was modest, due to discounts in expensive northwest neighborhoods like Williamsburg, while rents remained constant in less affluent parts of the borough like East New York.
Even with significant price cuts, discounting means less for the tenants who need it most. Mr. Kowalczuk warns that joint concessions, like two or three months of free rent on a one-year lease, are a temporary benefit, and new tenants should carefully consider whether they can afford the unlimited rent the following year.
And the coronavirus has made it clear that the rent relief is not proportional to the need. In a StreetEasy analysis of the neighborhoods with the fewest Covid 19 cases, rents in affluent neighborhoods like SoHo in Manhattan fell by 4.3 percent from February to September. In the hardest hit districts such as Corona in Queens and Pelham Parkway in the Bronx, rents even rose 0.2 percent.
Despite the significant discounts in Manhattan that are likely to last for months or more, crossing the $ 3,000 threshold remains largely symbolic as the median rent is citywide According to the Furman Center at New York University, the monthly price was $ 1,467.
Sign up here for weekly email updates on residential property news. Follow us on Twitter: @nytrealestate.