Queens

New York’s Sky-High Rents Show Signs of Leveling Off, But Don’t Celebrate Just Yet

By Columbus International,13 August 202413 August 2024

In a city renowned for its stratospheric living costs, a glimmer of hope emerges for New York’s beleaguered renters. Recent data suggests that the Big Apple‘s notoriously high apartment rents may have finally reached their zenith, offering a potential respite in one of the world’s most competitive housing markets.

According to the latest monthly leasing report from Douglas Elliman, compiled by appraisal firm Miller Samuel, Manhattan’s median rental price in July dipped to $4,300, marking a 2.3% decrease from the previous year. This $100 drop, while modest, signals a potential shift in the market’s trajectory. Similar trends were observed in Brooklyn and Northwest Queens, with median rents falling to $3,600 and $3,450 respectively.

Jonathan Miller, president and CEO of Miller Samuel, confirms this turning point: “Rents have peaked,” he stated in an email to CoStar News. This assertion is backed by several key indicators, most notably the declining average size of rented apartments across the three boroughs.

In Manhattan, the average square footage rented in July shrank by 9.5% year-over-year to 945 square feet, marking the 11th consecutive monthly decline. Brooklyn and Northwest Queens experienced similar contractions, with average sizes decreasing by 7.3% and 14.5% respectively. Miller attributes this trend to a post-pandemic normalization of space preferences and tenants’ efforts to reduce costs.

The rental market’s cooling may also be influenced by shifting dynamics in the homebuyers’ market. With the Federal Reserve expected to cut interest rates, potentially lowering mortgage rates, some renters are revisiting the prospect of homeownership. This reversal of the previous trend, where prospective buyers flooded the rental market, could help ease rental demand.

Furthermore, the supply side of the equation is showing signs of expansion. Manhattan’s listing inventory surged by 44% year-over-year to 10,634 units in July, while the vacancy rate inched up to 2.87% from 2.63% a year earlier.

However, industry experts caution against expectations of a dramatic market correction. “It’s still a landlords’ market,” Miller emphasized, noting that one in five renters continue to pay above asking price. In Manhattan, listing discounts remain at near-record lows, often representing premiums above asking prices.

The resilience of New York’s rental market is underpinned by the city’s robust economy. With 54,000 jobs added over the past year and a diverse economic landscape, renter demand remains strong despite the eye-watering costs.

As the New York housing market enters this new phase, both renters and investors will be watching closely. While the days of relentless rent hikes may be waning, the road to truly affordable housing in America’s largest city remains long and winding. For now, New Yorkers can take solace in the fact that, at least for the moment, the upward spiral of rental costs seems to have found its limit.

Source: CoStar News

Manhattan Rents Soar to Dizzying New Heights

By Columbus International,13 May 2024

New York City’s rental market is reaching dizzying new heights, shattering previous records and exacerbating the city’s affordability crisis. According to a report released by Douglas Elliman and Miller Samuel, median rents in Manhattan and Brooklyn soared to unprecedented levels in April 2024, with no signs of abating as the peak leasing season approaches.

The data paints a grim picture for renters struggling to keep up with the relentless rise in housing costs. In Manhattan, the median rent climbed to a staggering $4,250 last month, a 3.7% increase from March and a 0.2% annual hike. This figure represents a staggering 26.7% surge compared to the pre-pandemic average in April 2019. Brooklyn followed a similar trajectory, with the median rent reaching $3,599, a 3% monthly increase and a 26.7% jump from April 2019 levels.

The report’s author, Jonathan Miller, warns that these eye-watering numbers could be just the beginning. “This is the third time in the four months of 2024 that we’ve seen rental prices rise year-over-year,” Miller said. “And this is increasing the odds — because rents don’t peak until the summer — that we could actually see last year’s July/August record broken.” The rental frenzy extends beyond Manhattan and Brooklyn, with northwest Queens also experiencing a sharp spike. The median rent in the area reached $3,244, the second-highest April figure on record, marking a 1.4% increase from March and a 15.1% jump from April 2019. The escalating rents are compounding New York City’s affordability crisis, which has reached alarming proportions. A recent report from the city comptroller revealed a worsening food insecurity crisis, with one in nine households unable to access adequate nutrition.

Moreover, a StreetEasy/Zillow analysis found that New York City has the largest gap between wage and rent growth in the country, with rents growing over seven times faster than wages did last year. As summer approaches and leasing activity typically peaks, the city’s renters brace for further strain on their already stretched budgets. The affordability crisis threatens to deepen, leaving many struggling to keep a roof over their heads in the city they call home.

New York City Rental Market Shows Signs of Cooling with Increased Vacancy Rates

By Columbus International,17 January 2024

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.

Top 50 Priciest New York Neighborhoods in Q3 2023: Brooklyn Breaks into the Top 3 for the Second Time This Year

By Columbus International,8 November 2023

In the third quarter of 2023, residential property sales in New York City continued to experience a gradual decline, with both sales numbers and median prices dropping compared to the same period the previous year. By the end of September, the median sale price in NYC stood at $750,000, which was a 1% decrease from the third quarter of 2022. However, the most significant decline was seen in the number of sales, as there were 24% fewer residential transactions in the city compared to the previous year, resulting in approximately 2,400 fewer closed deals in the third quarter of this year.

On a positive note, quarter-over-quarter sales numbers showed an increase of 418 transactions, indicating a seasonal trend similar to 2022 and 2021, where third-quarter sales surpassed those of the second quarter. During the same period, the median sale price remained relatively stable. Nevertheless, the year-to-date data through September revealed a 28% decrease in the number of closed residential deals in NYC compared to the same timeframe in the previous year, with a total of 20,833 sales recorded. Notably, among the top 50 neighborhoods (which included 56 neighborhoods due to some ties), 24 were from Manhattan, 23 from Brooklyn, and nine from Queens. Notably, none of the Bronx neighborhoods made it to the list this quarter, despite the Bronx’s historic appearance in the top 50 during the first quarter of the year. The median sale price in the Bronx was $362,000, marking a 6% decrease from the previous year, which was the most significant year-over-year decline in median sale price among the four boroughs. Across all four boroughs, median sale prices experienced slight declines compared to the previous year, with Queens following the Bronx with a 2% drop, and Brooklyn and Manhattan both seeing 1% decreases. Similarly, overall sales activity decreased in each borough, with Brooklyn experiencing a 26% drop, Manhattan and Queens both recording 24% decreases, and the Bronx seeing a 22% decrease compared to the third quarter of 2022.

Unsurprisingly, Manhattan continued to host some of the most expensive neighborhoods in New York City, with seven out of the top 10 spots. Brooklyn also made its presence felt in the top three, securing two spots. Among the top 10 neighborhoods, seven saw an increase in the median sale price, while sales activity decreased in seven of them. Hudson Yards remained the most expensive neighborhood in NYC with a median sale price of $8,150,000, marking a substantial 39% increase from the previous year. This increase can be attributed to the larger average square footage of properties sold in the third quarter of 2023 compared to the previous year. However, Hudson Yards saw an 8% year-over-year decline in the number of residential deals during the quarter. SoHo secured the second spot with a median sale price of $4.2 million, surpassing TriBeCa in the second quarter of 2023. The median sale price in SoHo was 77% higher than in the third quarter of 2022, although the number of sales decreased significantly by 48% during the same period. Brooklyn’s DUMBO took the third position, with a 60% year-over-year increase in its median sale price, rising from $1,775,000 in the third quarter of 2022 to $2,833,000 in the third quarter of 2023. Hudson Square, TriBeCa, Flatiron District, Red Hook, Little Italy, Theatre District-Times Square, and Greenwood Heights completed the top 10. Manhattan’s median sale price was $1,125,000, while Brooklyn’s median reached $805,000 by the end of the third quarter, with more than half of Brooklyn’s neighborhoods experiencing a drop in median sale prices compared to the previous year.

Notably, DUMBO’s 60% increase in median sale price made it one of the top three neighborhoods, marking the second time a Brooklyn neighborhood achieved this since the first quarter of 2023 when Vinegar Hill held the position. DUMBO’s success can be attributed to 15 of its 33 sales taking place at Olympia, a condo building that significantly influenced the median sale price, with condos at Olympia selling for a median price of $4.95 million. Red Hook returned to the rankings after a year, recording nine residential sales above the $2 million median price threshold. Its median sale price also increased by 30% on a quarter-over-quarter basis. Greenwood Heights, previously ranked #23, climbed to the 10th position this year, experiencing the fourth-highest increase in median sale price year-over-year in the third quarter among the top 50 neighborhoods.

The neighborhood also saw a 6% increase in sales activity. In addition to these three neighborhoods, nine more neighborhoods had medians above $1 million, including Cobble Hill and Gowanus, which ranked 11th and 12th, respectively. Both neighborhoods experienced declines in medians and sales activity. Cobble Hill recorded the second-largest decline in year-over-year sales activity, falling by 58%, while Gowanus saw a 35% decrease in sales compared to the previous year. The most significant increase in sales activity was recorded in Manhattan Beach, up 25% year-over-year. Despite the increase in the number of transactions, the median sale price in Manhattan Beach dropped by 5% from the third quarter of 2022 to the third quarter of 2023, standing just below $1 million. Queens saw the sharpest increase in median sale price, with Little Neck experiencing a remarkable 121% year-over-year surge in the third quarter. Little Neck’s median sale price rose from $370,000 in the third quarter of 2022 to $818,000 in the third quarter of 2023, securing its place among the top 50 priciest neighborhoods in NYC. This increase occurred despite a notable drop in sales activity. Among the 50 most expensive neighborhoods, Queens also recorded the most significant decline in sales activity, with Queensboro Hill seeing a 61% decrease in the number of transactions. The most expensive neighborhood in Queens was Hunters Point, with a median sale price of $1,205,000, which was a 14% increase compared to the previous year, although sales activity fell by 21%. Auburndale was the next-priciest neighborhood, with a median sale price of $958,000, marking a 9% year-over-year increase.

Source: Property Shark