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New York City rents are rose toward the end of the summer, and the chances of getting a concession, such as a free month’s rent or a waived broker fee, dwindled, according to August market reports.
StreetEasy reported that average rents in Manhattan, Brooklyn Queens reached record highs for the listings site. Average rents rose 3% year-over to $3,309 in Manhattan, 3.5% to $2,198 in Queens, and 3.5% to $2,695 in Brooklyn.
The rise in prices were particularly steep in several submarkets, the site found. Downtown Manhattan, for example, saw a 2.8% hike to a new high of $3,809. Northwest Queens, which boasts the hot neighborhood of Long Island City, saw a 2.9% jump to $2,318.
The share of rentals offering concessions, meanwhile, dropped 1.3% to 13.6% in Manhattan, 2.4% to 11.7% in Brooklyn, and .6% to 12.2% in Queens, StreetEasy reported.
New York City’s soaring rental prices are in stark contrast to its sales market, which weakened throughout the summer. The average sales price fell 4.9% year-over-year to $1,098,104 in Manhattan and 2.4% to $691,224 in Brooklyn, according to the site. Prices in Queens remained stagnant at $514,233.
“As a dark cloud continues to hang over the sales market, we’re increasingly seeing those who have the money to buy finding better value in the luxury rental market while they wait and see what happens to home prices,” StreetEasy senior economist Grant Long explained. However, “if rents and home prices continue to move in opposite directions, we may see more investors test their luck in the rental market in the hope of cashing in on the current demand for high-end rentals, bringing some much-needed support to the sales market,” he added.
Brokerage Douglas Elliman released similar findings in its August rental market report. Its average rent prices increased 4.1% year-over-year to $4,206 in Manhattan, 8.4% to a record high of $3,507 in Brooklyn, and .4% to $3,089 in Queens. Its share of new leases that came with concessions was down to 31.9% from 34.7% in Manhattan, 38% from 42.1% in Brooklyn, and 36% from 38.6% in Queens.
“This has been a great year for the rental market, and this month was no exception,” said Hal Gavzie, executive manager of leasing at Douglas Elliman. “While landlord concessions are still relatively high, they have been steadily falling over the past few months as rentals in New York City continue to be buoyed by the weaker sales markets in the region.”
The New York City rental market reflects a national trend of increasing prices across the country, according to a report from RENTCafe. This is due to a slow-down in new construction, causing competition for the inventory that is available. The site found that the average rents from the 260 largest U.S. cities rose 3.3% year-over-year to $1,472 in August.