The median rent in Manhattan rose sharply last month, according to newly released data from Douglas Elliman. Net rents in the neighborhood increased by 8.8% compared to April, while prices in Brooklyn rose by a relatively modest 1.1%. Prices in both boroughs are still discounted compared to a year ago, in the range of 10%.
Driven by returning students and office workers, rental activity in New York City continues to soar, leading to a potential record number of leases signed this summer. More leases were signed in Brooklyn and Manhattan last month than in any May since Douglas Elliman began tracking in 2008.
“In general, landlords are not that aggressive [with discounting] as they once were, but it didn’t affect [rental] speed,” said Gary Malin, chief operating officer of the Corcoran Group. “We entered the summer of 2021 with more choice for apartment seekers, who sometimes also had to pay more to get a new home.”
Despite the gains, an abundance of inventory continues to plague property owners, who are again starting to sell apartments they had kept off the market due to low prices. In the short term, and in select areas, that still gives tenants the upper hand. “With more than 20,000 ads available in the 5 boroughs, tenants still have a lot of bargaining power,” said Allia Mohamed, co-founder and CEO of openigloo, a startup that helps tenants research buildings and landlords.
Currently, the highest vacancy rates in Manhattan are in Midtown East (5.9%) and the East Village and Lower East Side (5.4%), according to data from Corcoran Group. The Financial District and Battery Park City are lowest (2.61%), along with Greenwich Village and the West Village (2.79%).
In some hotspots, such as the Village and SoHo, the extreme competition has returned the advantage to landlords. Real estate fees are making a comeback and in some cases, real estate agents receive more than 100 applications within the first day an apartment goes on the market. “New listings hitting the market in high-demand NYC neighborhoods like Tribeca, SoHo, the Village, and coveted Brooklyn neighborhoods are hitting on — or near — pre-COVID rents,” said Hal Gavzie, executive director of leasing at Douglas Elliman.
The latest Elliman report shows that Manhattan has the biggest discounts on studios and one-bedroom apartments, where average rents have fallen by 14.8% and 11%, respectively. Larger units are discounted by less than 8% in total.
In Brooklyn, it’s the opposite trend. Prices for smaller apartments are strikingly far from the rates of 12 months ago, but units with a minimum of two bedrooms are more than 12% off. The most popular areas of Brooklyn, such as Boerum Hill and Cobble Hill, have become extremely competitive, and it is common for hosts to receive five or more offers for an ad.
Queens, for its part, remains highly discounted across the board, with median prices ranging between 12.9% and 22.9% depending on apartment size. The municipality hopes for a recovery later in the summer and fall.
For those not participating in the leasing market, sales activity is also booming. Corcoran reports that 1,600 contracts were signed last month, the highest number for May since 2007. And as with rentals, it’s a seller’s market in the trendiest areas.