Average rental prices in Manhattan and Queens fell in January, and prices in Brooklyn rose modestly, as New York City landlords aggressively pushed a record number of concessions in the face of a citywide inventory glut, according to a new report.
In Manhattan, where average rent for a two-bedroom apartment fell 5.3 percent—from $5,040 in December to $4,771 in January—as many as 49.3 percent of all new leases signed included hefty owner-paid concessions, up from 36.2 percent a month earlier, according to the report by Douglas Elliman.
In Northwest Queens, where new development continues to sprout across trendy Long Island City, the average rental price of a two-bedroom apartment fell 4.5 percent, from $3,608 in December to $3,447 in January, according to the report. More than half of all new leases — 50.8 percent—included concessions, driving median rental prices down to $2,507 for all units.
“The concessions, for the past year they’ve been there and I think they’re just increasing now,” said Hal Gavzie, executive manager of leasing at Douglas Elliman. “You have landlords who need their apartments to be rented as quickly as possible, and they’re putting these concessions there and they’re adjusting the rents, knowing it’s the softest part of the market. And this is what most of the competition is doing, so they’re pretty much just falling in line.”
Among the boroughs included in the report, Brooklyn stood as an exception, tallying a modest 1.5 percent, month-over-month increase for two-bedroom apartment, to $3,307, according to the report.
Concessions, however, continued to rise nonetheless, from 46.1 percent of all leases signed in January, to 47.5 percent. The uptick in concessions marked the fourth-consecutive month of increases in the borough. New data for the Bronx and Staten Island were not included in the monthly rental report.
The citywide discounts, in the form of price adjustments and owner-paid concessions—sometimes by as much as two or more free months of rent—was largely the result of soaring inventory in Manhattan, Brooklyn and Queens.
In January, Manhattan had 5,688 unoccupied units, Brooklyn had 1,933 and Queens had 576, according to data provided by Elliman.
Among Douglas Elliman projects, The Lewis at 411 West 35th St. in Manhattan now advertises two months free rent as well as one month paid by the owner. Elsewhere, a building at 915 West End Ave., and another at 180 Water Street near the South Street Seaport, offer similarly deep discounts.
“It’s something these landlords have to do,” Gavzi told Inman News on Tuesday, ahead of the report. “I’ve been speaking with my agents, to kind of push their landlords to really adjust these prices aggressively to move, because the concessions aren’t enough. There’s so much inventory out there.”
As a result of the large inventory and fierce competition, the number of days unoccupied units stayed on the market in January declined from 55 to 36 in Manhattan, an indication that landlords have been more willing to negotiate rates and deeper concessions, Gavzi said.
“I don’t like to be the doom-and-gloom guy, but I just think it’s the climate we’re in right now,” added Gavzi. “But what can I say: I just think it’s a great time if you’re a renter.”
Email Jotham Sederstrom