Manhattan Landlords Had a Happy Holiday as Rents Reach Records for a December

Manhattan residential landlords had a happy holiday as median rents rose to an all-time high for a December. Three-bedroom apartments and larger had the biggest year-on-year gains.

The median Manhattan rent in December rose 16.5% from a year earlier to $4,048. Though that was a record for December, there were some signs the market may be easing in Manhattan, Queens and Brooklyn after steady gains through much of last year, according to a report by Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

In Manhattan, the median rent fell for four of the past five months since reaching a record in July, while the vacancy rate rose for an eighth straight month. Demand for rentals, however, isn't likely to ease much while sales prices and financing costs remain high.

"The market is still robust on the rental side, especially in Manhattan," said Hal D. Gavzie, executive vice president for residential leasing at Douglas Elliman. ``We are seeing more people enter the rental market, with the high mortgage rates making it more expensive to buy."

In Brooklyn, median rent in December was $3,300, unchanged from November and up 18% from December 2021. New lease signings in Brooklyn fell for a third straight month, while landlords offered the most concessions in 14 months -- amounting to 1.4 months' free rent.

The bargains for now are in Queens, where the median rent in December fell below $3,000 for the first time since May, to $2,809, down 12% from November and 0.6% from a year earlier, while the market share of landlord concessions rose to the highest level since May.

"In Queens, you’re definitely seeing landlords are a bit more flexible with their rents," Gavzie said. "A lot of these landlords are coming back from the peak of the pandemic and they need to get their apartments leased. At the end of the day, renters want to enjoy the New York City nightlife and if they can't afford Manhattan, then parts of Queens and Brooklyn are the next best alternatives."

In Manhattan, median rents for three-bedroom apartments and bigger rose 20% year on year to $7,191, while one-bedrooms rose 18% to $4,000 and two-bedrooms rose 17% to $5,500.

In Brooklyn, two-bedrooms had the biggest gains, rising 29% to $3,900. One-bedrooms rose 28% to $3,200 and three-bedrooms rose 18% to $4,000.

In Queens, three-bedroom apartments rose 1.4% to $3,500 year on year; studios fell 4.5% to $2,650 and two-bedrooms fell 4.1% to $3,600.