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New York City’s residential rental market has been gradually cooling and adding more inventory, as the rental vacancy rate in Manhattan last month crept up to 3.4 percent, its highest level since July 2021.
The median rental price of rental housing in Manhattan remained effectively flat on a year-over-year basis at $4,050 per month, according to the December market report prepared by Miller Samuel for Douglas Elliman. Meanwhile, Brooklyn’s median rent was up 5 percent in that time, to $3,469, even as it remained down from a record high in July.
Jonathan Miller, an appraiser who writes the reports for Elliman, noted that the higher vacancy rate in Manhattan signals that rents are likely to fall further across the five boroughs in 2024.
“The vacancy rate in Manhattan has been stuck in the mid to upper 2 [percent] and this quarter it jumped above 3 percent,” said Miller. “That means landlords are having less success keeping a tenant from leaving. The higher vacancy suggests there’s going to be some weakness in front of us. We’re going to see more of this. We’re starting to see concessions start to rise again.”
He added that the overall economic climate is pointing that way, as the Federal Reserve has promised interest rate cuts next year.
“We’re probably going to see weaker rents in front of us because the general economy is weakening,” said Miller.
Listing inventory has grown over the past year in both Brooklyn and Manhattan, leading to declining average rents over the past few months and significant spikes in new leases signed for December, according to the report. Manhattan average asking rent slid 3.8 percent from November to December, from $5,150 to $4,952, and dipped 5.6 percent from a year prior. Median asking rent increased slightly, 1.3 percent, from $4,000 in November to $4,050 in December, even as it hit the same price as it did in December 2022.
The number of new residential leases signed in Manhattan was also up nearly 8 percent last month, to 3,632, and up 14 percent year-over-year from 3,179 leases signed in December 2022. Listing inventory in Manhattan declined 9.5 percent month-over-month, to 7,621, but remained 33 percent higher than last year’s 5,731 listings on the market.
Rental units in Brooklyn, meanwhile, saw a December average asking monthly rent of $3,754, down $14 (0.8 percent) from the month prior and $62 (1.6 percent) from December 2022. The median rental price of $3,469 was up 5 percent from December 2022’s $3,300, but down less than 1 percent from November’s $3,495, in a continued downward slide from a July peak of $3,950.
Listing inventory was up 8 percent year-over-year to 3,400 listings from 3,141 a year ago, and the number of new leases signed — 2,272 — had surged 115 percent from a year ago, when renters inked just 1,055 new leases, the report found.
Elliman and Miller Samuel track only Long Island City and Astoria in Queens, where average asking rents were up 6 percent month-over-month to $3,601 from $3,403 in November, and up nearly 10 percent on a year-over-year basis from $3,287 in December 2022. Renters signed 525 new leases in northwest Queens in December, up 26 percent from the month prior and up 58 percent from December 2022.
The Bronx, Staten Island and the rest of Queens do not get tracked in their reports.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com
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