NYC rent prices to drop as inventory rises, experts say

Battery Park City had the fifth-highest median rent in Manhattan in July at $4,773, according to StreetEasy.
Battery Park City had the fifth-highest median rent in Manhattan in July at $4,773, according to StreetEasy. Photo Credit: Linda Rosier

This fall is expected to provide some relief for New Yorkers in the rental market, according to experts.

The colder months are typically easier seasons for those looking to rent apartments in the five boroughs, and this year will be no different, with industry professionals predicting drops in prices, more concession offerings and a rise in inventory.

According to Krishna Rao, an economist at the real estate listings site StreetEasy, this year has already been a little easier on renters.

“Price growth is a little bit slower but also units aren’t getting snapped up quite as quickly, so there’s more of them available,” he said. “You have a little more breathing room than you would have had a year ago.”

While the median rent in Brooklyn went up 6% between July 2014 and July 2015, it rose just 1.5% through July 2016, according to StreetEasy. The median rent in July 2016 was $2,899 in Brooklyn, up .4% from June.

In Manhattan, the median rent rose 4.7% from July 2014 to July 2015, and then increased 2.6% through July 2016, StreetEasy found. Manhattan’s median rent in July 2016 was $3,315, up .6% from June.

One neighborhood Rao recommended to look in is Williamsburg, where there’s been a boom in new rental developments.

For example, Fifth & Wythe, a seven-story, 164-unit rental at 55 N. Fifth St., is being built this year and had 14 available listings on StreetEasy as of press time.

The Berkley, a seven-story, 95-unit rental at 223 N. Eighth St., was also going up this year, and had six available apartments as of press time.

“If you look in one of these buildings that has a lot of availability, you’re likely to receive a concession,” Rao said.

In Manhattan, the vacancy rate was high across the board this summer, as was the number of units that came with concessions, such as a free month’s rent or a waived broker fee, according to Gary Malin, president of the real estate firm Citi Habitats.

The brokerage found that 20% of new Manhattan rental leases in August came with concessions.

The borough’s vacancy rate fell to 1.73% in August from 1.92% in July, according to Citi Habitats — but it’s still historically high. Last month’s rate was the highest it’s been in August since the brokerage began tracking the number in 2002, Malin said.

And as vacancies rise in the fall, concessions are likely to become more prevalent as landlords clamor to get them filled, leading Malin to believe that the winter will be the best time to find a new rental, if it’s possible to wait.

“My assumption is it’s going to be a more tenant-friendly market over the next few months,” he said.

Lawrence Zhou, co-owner of the rental listings site RentHop, predicted that prices for one-bedrooms across the city could fall 2-4% by the winter, which could equate to about $100 less a month.

However, he noted that renters can use recent market information to negotiate out of rent hikes if their leases are up this fall.

Landlords will typically try to raise rents by 5-10% a year, “and if that happens, definitely do not be afraid this time around to say, ‘I’ve been looking around and prices have been pretty stable, can you not raise the rent this year?’“ Zhou said.

However, he added, “if you’re OK with dealing with the hassle of moving, you can move out and get a cheaper apartment elsewhere or take advantage of concessions.”

Median rent per borough in July 2016, according to StreetEasy:

— Manhattan: $3,315

— Brooklyn: $2,899

— Bronx: $1,700

— Queens: $2,300

— Staten Island: $2,050

Here are the five Manhattan nabes with the highest median asking rents in July 2016, according to StreetEasy:

TriBeCa: $8,400

Central Park South: $7,488

Flatiron: $5,195

SoHo: $4,850

Battery Park City: $4,773

Here are the five Manhattan nabes with the lowest median asking rents in July 2016, according to StreetEasy:

Inwood: $1,885

Washington Heights: $2,195

Hamilton Heights: $2,300

East Harlem: $2,408

Central Harlem: $2,500