The residential rental market in New York City has been gradually cooling, with an increase in inventory and a rise in the rental vacancy rate in Manhattan to 3.4 percent, the highest level since July 2021. According to the December market report by Miller Samuel for Douglas Elliman, the median rental price in Manhattan remained flat at $4,050 per month on a year-over-year basis. In contrast, Brooklyn’s median rent increased by 5 percent to $3,469, although it was still down from its record high in July.
The higher vacancy rate in Manhattan suggests that rents are likely to decrease further across the five boroughs in 2024. This shift is attributed to landlords facing challenges in retaining tenants, leading to an anticipation of weakness in the market. The overall economic climate, coupled with the Federal Reserve’s promise of interest rate cuts next year, supports this trend. Listing inventory has grown in both Brooklyn and Manhattan over the past year, resulting in declining average rents and significant increases in new leases signed in December. Manhattan’s average asking rent decreased by 3.8 percent from November to December, reaching $4,952, and dipped 5.6 percent from the previous year. Meanwhile, new residential leases in Manhattan increased by nearly 8 percent to 3,632, a 14 percent year-over-year growth. Brooklyn experienced a decrease in the average monthly rent to $3,754 in December, down 0.8 percent from the previous month and 1.6 percent from December 2022.
However, the median rental price rose by 5 percent year-over-year to $3,469. The listing inventory in Brooklyn increased by 8 percent compared to the previous year, with a 115 percent surge in the number of new leases signed. In Queens, Elliman and Miller Samuel tracked only Long Island City and Astoria. Average asking rents in these areas rose by 6 percent month-over-month to $3,601, and nearly 10 percent on a year-over-year basis. The number of new leases signed in northwest Queens increased by 26 percent from the previous month and 58 percent from December 2022.