Photo: Robert Clark
Over the last quarter, rents in three NYC boroughs grew less than half as quickly as they did last year.
This was likely due in equal parts to a plethora of new developments coming to market and prices, in general, hitting the ceiling of what New Yorkers can actually afford.
In Queens and Brooklyn, rents grew at their slowest annual rate on record, while in Manhattan rents grew at the “slowest rate ever seen” in the red-hot borough, according to a quarterly report released today by the listing site StreetEasy.
Median rents in Brooklyn grew 0.6 percent to $2,460 annually and rose 0.7 percent annually to $1,991 in Queens in the the third quarter, both the lowest growth rates “ever observed” by StreetEasy.
Rents in Brooklyn grew nearly three times slower compared to the same last year, while Queens’ rate of growth hit a record low level. The borough had been outpacing Manhattan and Brooklyn since the start of 2016, says StreetEasy.
Despite stable prices, listing prices still saw extensive cuts. In Queens, Clearview, Corona and Ridgewood had the highest share of listings that received a discount, at 30 percent 27 percent and 27 percent, respectively. Meanwhile in Brooklyn, the North Brooklyn submarket saw 31 percent of listings get a discount, the highest share in the borough.
And, in Manhattan, rents increased 0.7 percent year-over-year to $2,989, the slowest annual growth on record since the Great Recession, save for the first two quarters of this year when rents were more or less stagnant, says StreetEasy in the report.
For the first time in six years, rents in Upper Manhattan saw the lowest increases of all the borough’s neighborhoods. Meantime, rents in the Upper East Side market spiked 1.6 percent year-over-year in the third quarter, thanks to an increase in transportation options provided by the Second Avenue subway.
“After years of growth, rents in the city may have reached the peak of what New Yorkers can afford, and high-end rents in particular are stagnating or even beginning to drop in Brooklyn and Queens,” StreetEasy Senior Economist Grant Long says in the report.
If the current trend continues, rents will likely fall city-wide as new units come onto the market and are forced to compete with summer’s leftover inventory during one of the slowest times of the year.
“This is consistent with what we see each year as we head into the slow winter season. Last year, we saw rents across the city drop to their lowest levels in January and February,” Long tells BuzzBuzzNews.
And as rent growth slows, landlord incentives have risen. Landlords will often offer incentives to attract new tenants and keep units filled. Incentives tend to be a period of free rent, but recently more landlords have also included more “modern” incentives like Amazon gift cards or Netflix subscriptions.
Landlords are more likely to increase incentives rather than cut rents.
“Permanent cuts to the legal rent tend to be a last resort for most landlords, who prefer to offer prospective tenants a period of free rent or other incentives,” Long tells BuzzBuzzNews.
Click here to read the entire report.