Last Thursday, Elliman released their monthly rentals report, and as expected, rents increased across the board. Manhattan, Brooklyn, and Queens are seeing greater market competition for studios, one-, and two-bedrooms, which pushed rents higher.
Brooklyn’s median rent in particular increased by 5.6 percent year-over-year to $2,961 – a record high. Meanwhile, Manhattan’s median rent increased by 3.5 percent year-over-year to $3,361. The Citi Habitats report placed Manhattan’s average a bit higher at $3,459, and was nicely summarized, “Rents rose, the vacancy rate fell, and the prevalence of move-in incentives declined...” To be sure, with strong demand, landlords were less inclined to give listing discounts over the previous quarter. Notably, the difference in median rent between the two boroughs has been as low as $210 (February 2014).
Interestingly, the buying side of New York’s housing market is showing a historic low in condo and co-op inventories, particularly in the resale market. While this is primarily associated with current owners’ hesitance to sell for fear of inability to find a new home because of the extant inventory shortages, it’s reasonable to think that many would-be first-time homebuyers are still in the rental market.
Nationwide, it seems that rents actually increased as a whole by 3.7 percent, and according to Don Lawby, President of Property Management Business Solutions, “There are a lot of economic indicator supporting that viewpoint, not the least of which is America’s continual shift toward renting.” But as we’ve previously pointed out, millennials are leaning into it. According to a survey of 1,000 millennials (18–34 years old), Rent.com reported that 57 percent of respondents indicated that affordability was the most important factor when deciding to rent, with still others citing mobility, maintenance, location, college life, location commitment, and mortgage eligibility as other primary reasons.
