Market Shows Consistency with Higher Rents and Declining Concessions; New Rent Records Set in Brooklyn & Queens

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 February 2020 Rental Market Report for Manhattan, Brooklyn and Queens. The report’s results were consistent with previous months’ trends – showing rising rents and high but continually falling concessions.

In Manhattan, rental prices pressed higher, with all three overall price trend indicators up for the ninth straight month. However, the luxury median rent fell for the first time in nearly a year. Concessions and new leases were both down, indicating that landlords have continued to be more successful at the time of lease renewals.

“This month we’re seeing a steady continuation of the trends we’ve observed over the last several months in the rental market, with robust pricing and a decline in the use of concessions, though they remain elevated,” said Hal Gavzie, Executive Manager of Leasing for Douglas Elliman Real Estate. “Overall, the market is strong, with new rent records set in both Brooklyn and Queens. “

In Brooklyn, the median rental price reached a new high, up 7.1% from the same period last year. Concession market share declined and new leases fell sharply. In Queens, the average rental price rose to a new record, up 11.8%, despite the expansion of landlord concessions. The borough saw the highest free rent equivalent in more than four years.

“The city’s rental market has been very sturdy over the past year and into the beginning months of2020, with rents consistently on the rise,” saidJonathan Miller, President and CEO of Miller Samuel Inc. and the author of the report. “Although we are in the midst of a charged news cycle, in the context of the rental market, we’re not seeing any tangible impact at this time.”

MANHATTAN RENTAL MARKET HIGHLIGHTS
Overview

“Rental prices pressed higher as the use of concessions declined but remained elevated.”

- Despite the eleventh year over year decline in concession market share, free rent reached its highest level in nearly two years.

- The ninth straight month where all three overall price trend indicators rose year over year

- The number of new leases fell year over year for the seventh straight month as landlords were more successful at the time of renewal

- The new development median rental price fell year over year for the first time in ten months

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

- Luxury median rent declined annually for the first time in eleven months

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price rose by 2.9% to $3,500

- Rental price per square foot rose by 7.9% to $71.44
- Average rental price increased by 3.9% to $4,385

(Net Effective Rent – includes concessions)
- Median rental price 2.8% to $3,390

- Share of new rental transactions with OP or rent concessions was 36.7%, down from 41.6%
- Size of the concession was 1.5 months of free rent or equivalent, up from 1.2

- Manhattan vacancy rate was 2.01% up from 1.81%
- Number of new leases fell 10.3% to 3,089

- Listing inventory fell 19% to 781
- Days on market was 31, up from 32
- Listing discount was 1.6%, down from 2.2%

BROOKLYN RENTAL MARKET HIGHLIGHTS

Overview

“Median rental price reached a new high as concession market share declined.”

- New leases have fallen sharply year over year for the fifth straight month as landlords improved tenant retention at renewal

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

- The luxury median rose year over year for the sixteenth straight month

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price was $3,100 up 7.1% [record]
- Rental price per square foot rose by 7.3% to $48.99

- Average rental price rose by 7.9% to $3,442

(Net Effective Rent – includes concessions)
- Median rental price rose by 8.3% to $3,015
- Share of new rental transactions with OP or rent concessions was 28.8%, down from 44.7%
- Size of the concession was 1.6 months of free rent or equivalent, up from 1.4

- Number of new leases fell 25% to 788

- Listing inventory fell 23.1% to 1,375
- Days on market was 24, down from 28
- Listing discount was 0.4%, down from 1%

QUEENS RENTAL MARKET HIGHLIGHTS

Overview
[Northwest Region]

“Average rental price rose to a new record despite the expansion of landlord concession market share.”

- The market share of landlord concessions rose year over year for the second time in three months

- All three overall price trend indicators rose year over year for the second straight month

- The highest free rent equivalent in more than four years

Key Trend Metrics (from same period last year)

(Face Rent)
- Median rental price rose by 3.6% to $2,900
- Rental price per square foot increased by 12.2% to $55.07

- Average rental price increased by 11.8% to $3,235 [record]

(Net Effective Rent – includes concessions)
- Median rental price increased by 0.7% to $2,705
- Share of new rental transactions with OP or rent concessions was 60.5%, up from 49.3%
- Size of the concession was 1.9 months, up from 1.4 months

- Number of new leases fell by 20.4% to 223

- Listing inventory declined by 22.9% to 341
- Days on market was 21, down from 28
- Listing discount was 0.8%, unchanged

- New development market share was 32.3%, down from 43.6%

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.