Photo: Steve Parker/Flickr
Douglas Elliman Real Estate recently released its October 2015 Market Report, and its findings confirm the strength of the New York City real estate market. Elliman partners with Miller Samuel, an independent appraisal firm, to provide analysis of residential price and sales trends and offer what they consider one of the most comprehensive and neutral market insights available.
Here are 5 key takeaways from the report:
1. Rental Prices are rising.
The median New York City rental price increased year-over-year for the 21st consecutive month. Manhattan rents increased for the 20th consecutive month, and Brooklyn median rent increased to the second highest level on record. Queens rents saw a modest decrease, except in the luxury markets, which showed the most price gains of all boroughs.
Compared to a year ago, in Manhattan, median face rent increased 4.5 percent to $3,391, and the average rental price rose 2.6 percent to $4,096. Premium-priced outliers skew the average higher. In Brooklyn, median face rent rose 4.3 percent to $2,981, and the average rental price rose 5.9 percent to $3,375.
2. Credit conditions and rising prices keep renters renting.
Significant rent increases were seen at the lower end of the market as the economy drove prices higher. This, paired with less-than-favorable interest rates, meant that first time buyers could not qualify for mortgages to move into the sales market.
This concern is also echoed in the Real Estate Board of New York’s recent Broker Confidence Survey, which documented a slight dip in broker confidence. Brokers remain mostly optimistic, but are concerned that rising interest rates may lead to decreased future sales.
3. Non-doorman rentals are preferred to doorman rentals.
In Manhattan, the median doorman rental price was up 1.3 percent year-over-year, compared to 5.3 percent for non-doorman buildings. This demand for non-doorman rentals is likely explained by the general rent increases at the lower end of the market. Young buyers are competing for limited inventory.
The rental price for new development in Manhattan decreased 4.7 percent since last year, and the rental price for lofts decreased two percent.
4. The luxury market posted the smallest price gains.
The average rental price for the luxury tier of the market (the top 10 percent) was $10,536/month, up 3.2 percent since September. Meanwhile the entry tier (bottom 30 percent) of the market decreased 3.8 percent since last month, with a median rental price of $2,260/month.
5. Vacancy rates are up overall.
Elliman noted a drop in the use of concessions by landlords (such as free rent, shorter lease periods, reduced fees, Higher Tenant Improvement Allowances, move-in allowances, and consent to sublease), but vacancy rates still edged higher. This is likely related to the 8.3 percent increase in listing inventory over the past year, as well as rising prices. The West Side and Uptown showed marked increased vacancy, but Downtown and the East Side showed a modest vacancy decline.
Check out BuzzBuzzHome’s Market Snapshot tool for the more data on new construction in New York.