Market Remains Strong with Higher Rents and Declining Concessions Across All Boroughs

Douglas Elliman Real Estate, the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume, today releases its January 2020 Rental Market Report for Manhattan, Brooklyn and Queens. The report’s results were in keeping with previous months’ trends – robust rents and high but steadily falling concessions, with new leases down across all three boroughs.

Net effective median rental prices in Manhattan have not declined in more than a year and rose for the thirteenth straight month in January. Concessions and new leases were both down, indicating that landlords have continued to be more successful retaining their current tenants for lease renewals.

“There was a lot of strength and consistency in the rental market over the course of 2019, and this report shows many of the same trends as we start the new year,” said Hal Gavzie, Executive Manager of Leasing for Douglas Elliman Real Estate. “The past few weeks have been newsworthy concerning the New York Statewide Security and Tenant Protection Act guidance and the resulting restraining order. However that issue shakes out, it’s too soon to evaluate any potential impact on the market. But it will be something to watch in the coming months.”

Results out of Brooklyn and Queens were also in alignment with Manhattan for the month. Rents were up in both boroughs, with falling – but still historically high – concessions and a drop in new leases. It’s also worth noting that the market share of new development in Queens reached its lowest level since the summer of 2018.

“The city’s rental market has been robust for many months, and that certainly has continued into 2020 so far,” said Jonathan Miller, President and CEO of Miller Samuel Inc. and the author of the report. “Rents have been on the rise for over a year, and if the new Department of State guidance stands following litigation, I expect to see prices rise more as landlords look to offset their newfound higher costs.”

MANHATTAN RENTAL MARKET HIGHLIGHTS
Overview

“New leases continued to fall as landlords continued to be more successful at the time of lease renewal.”

- The market share of landlord concessions slipped for the twelfth time in thirteen months

- The number of new leases fell year over year for the sixth straight month

- The net effective median rent rose annually for the thirteenth consecutive month

- New development median rental price rose year over year for the ninth straight month

- Median rent for new development increased more year over year than existing rents in ten of the last twelve months

- Luxury median rent hasn’t seen a year over year decline since last March

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price rose by 5% to $3,595

- Rental price per square foot rose by 4.7% to $70.75
- Average rental price increased by 5.8% to $4,423

(Net Effective Rent – includes concessions)
- Median rental price rose 4.6% to $3,472

- Share of new rental transactions with OP or rent concessions was 40.2%, down from 44.5%
- Size of concession was 1.4 months of free rent or equivalent, up from 1.2

- Manhattan vacancy rate was 1.73% up from 1.65%
- Number of new leases fell 2.1% to 3,969

- Listing inventory fell 6.5% to 4,610
- Days on market was 38, up from 34
- Listing discount was 1.4%, down from 2.3%

BROOKLYN RENTAL MARKET HIGHLIGHTS

Overview

“The market share of landlord concessions fell year over year for the thirteenth straight months.”

- The net effective median rent rose annually for the fourteenth straight month

- Thirteen consecutive declines in the market share of landlord concessions

- The fifth time in six months the number of new leases declined as landlords were better able to retain tenants at renewal

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price was $2,987 up 5.5%
- Rental price per square foot rose by 8.4% to $47.47

- Average rental price rose by 7.7% to $3,367

(Net Effective Rent – includes concessions)
- Median rental price rose by 5.9% to $2,868
- Share of new rental transactions with OP or rent concessions was 43.2%, down from 47%
- Size of concession was 1.6 months of free rent or equivalent, unchanged

- Number of new leases fell 7.8% to 1,060

- Listing inventory fell 22.9% to 1,456
- Days on market was 40, up from 31
- Listing discount was 1.4%, down from 2.1%

QUEENS RENTAL MARKET HIGHLIGHTS

Overview
[Northwest Region]

“Six straight months of year over year declines in new lease signings.”

- The market share of new development reached its lowest level since the summer of 2018

- Net effective median rent increased annually for the third time in four months

- Concession market remained above the fifty percent market share threshold for the third straight month.

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price rose by 6.3% to $2,993
- Rental price per square foot increased by 4.9% to $51.09

- Average rental price increased by 8.2% to $3,123

(Net Effective Rent – includes concessions)
- Median rental price increased by 4.8% to $2,822
- Share of new rental transactions with OP or rent concessions was 53.9%, down from 58%
- Size of concession was 1.8 months, up from 1.2 months

- Number of new leases fell by 3.4% to 308

- Listing inventory declined by 25.3% to 346
- Days on market was 35, up from 32
- Listing discount was 1.6%, down from 2.2%

- New development market share was 23.7%, down from 33.2%

About Douglas Elliman Real Estate

Established in 1911, Douglas Elliman Real Estate is the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume. With more than 7,000 agents, the company operates approximately 120 offices in New York City, Long Island, The Hamptons, Westchester, Connecticut, New Jersey, Florida, California, Colorado, Massachusetts and Texas. Moreover, Douglas Elliman has a strategic global alliance with London-based Knight Frank Residential for business in the worldwide luxury markets spanning 60 countries and six continents. The company also controls a portfolio of real estate services including Douglas Elliman Development Marketing, Douglas Elliman Property Management and Douglas Elliman Commercial. For more information on Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, please visit elliman.com.