Despite reaching all-time highs, New York City rents grew at the slowest annual pace on record in Brooklyn and Queens, and among the slowest rates ever seen by StreetEasy in Manhattan, according to the Q3 2017 StreetEasy® Market Reportsi.
Rents in all three boroughs grew less than half as quickly as in Q3 2016. Median rents in Brooklyn rose just 0.6% year-over-year to $2,460, and median rents in Queens rose 0.7%, to $1,991 — both the slowest growth rates ever observed by StreetEasy. Manhattan’s median rents rose 0.7% to $2,989, showing some of the slowest annual growth on record since the Great Recession — apart from the first two quarters of 2017, when rents were essentially stagnant.
“While rents remain high, they’re growing at a snail’s pace. Part of this can be attributed to the onslaught of new construction driving up competition among landlords, but ultimately there is a limit to what renters are willing to pay,” said StreetEasy Senior Economist Grant Long. “After years of growth, rents in the city may have reached the peak of what New Yorkers can afford, and high-end rents in particular are stagnating or even beginning to drop in Brooklyn and Queens. If current patterns continue, rents across the board will likely fall as new units coming onto the market are forced to compete with leftover summer inventory during one of the slowest times of the year.”
Q3 2017 Key Findings – Manhattan
· Rents grew at one of the slowest paces on record. Median rents rose 0.7% from Q3 2016 to $2,989iii, less than half the rate of growth seen in Q3 of last year (1.5%).
· Upper Manhattan rents grew the least. Median rents in the Upper Manhattan submarket failed to lead the borough for the first time in six years, growing just 0.6% to $2,202.
· Manhattan price growth slowed; prices fell in Midtown. Manhattan’s median resale price rose slightly by 0.9% to $1,168,557iv. Midtown prices fell 1.5% from last year to $1,200,884, making it the only submarket where prices fell.
· Luxury home prices fell; sellers offered 2% more price cuts. Prices for the most expensive homes fell by 3.9% since last year, more than double the annual price decrease seen in Q3 2016 (-1.6%).
Q3 2017 Key Findings – Brooklyn
· Brooklyn rents grew at their slowest pace on record. Median rents rose 0.6% to $2,460, marking the slowest growth rate since 2011. At this time last year, rents grew nearly three times faster (1.6%).
· North Brooklyn rents dropped, offered the most discounts. North Brooklyn was the only submarket to see rents decline, dropping 0.5% since last year to $3,067. It also offered the most listing discounts and was the only submarket where the share of discounts rose: 31% of rental listings saw a price cut during the quarter, up 2% since Q3 2016.
· Resale prices rose, particularly in South Brooklyn. The median resale price in Brooklyn rose 3.6% since last year to $754,094. South Brooklyn resale prices grew the most in the borough, up 7.4% year-over-year to $706,840.
Q3 2017 Key Findings – Queens
· Queens saw record-low rent growth. After outpacing the other boroughs since the beginning of 2016, annual rent growth in Queens slowed to 0.7%, falling in line with Brooklyn and Manhattan and reaching a median rent of $1,991.
· More than a quarter of all rentals in Clearview, Corona and Ridgewood offered discounts. Clearview rentals had the highest share of price cuts in Queens (30%), followed by Corona and Ridgewood (both 27%).
· Queens resale prices rose faster than Manhattan and Brooklyn. The median resale price in Queens rose 9.3% year-over-year to $513,731.
