The days when you could easily get a Manhattan apartment for less than $ 3,000 may be over, but renters have a plan: sign longer leases.
As concessions fade and rents rise in Manhattan, Brooklyn and northwest Queens, tenants are signing longer leases to close out bargains, according to the latest rental market report from Douglas Elliman.
In Manhattan, 9,491 new leases were signed in May, while Brooklyn recorded 2,506 new leases. It was the highest number of new lease signings either county had seen since 2008, and a strong sign that the beating the city’s rental market took during the pandemic is coming to an end.
In Northwest Queens, which includes Long Island City, Astoria and Woodside, 510 leases were signed. It is the second highest number of new leases signed in the municipality, after last month’s record.
This increase in activity has raised incomes. Median net effective rent, or rent that is included in concessions, was $ 3,037 in Manhattan in May, the first time the figure has exceeded $ 3,000 since falling below that threshold in September.
In Brooklyn, the net effective rent was $ 2,644 in May, and in Northwest Queens it was $ 2,304.
Tenants are signing longer leases to secure current rentals while they can. In December, 77.6 percent of the leases that were signed were for one year. In May, that number fell to 37.6 percent, according to Jonathan Miller, author of the Elliman report. The median lease term in Manhattan was 15.6 months in May, compared with 13.3 months in February.
“Tenants are showing through action that they do not anticipate a sharp drop in rental prices anytime soon,” Miller said. “They are signing longer leases to secure the savings.”
The same trend is happening in Brooklyn, which had an average lease length of 15.1 months in May, compared with 13.6 months in February. In Queens, renters signed an average 16.2-month lease in May, compared to 13 months in February.
That is not to say that concessions have completely disappeared. The two months of free rent that landlords gave to renters in Manhattan were the third highest they have ever had. Although that is 33 percent higher than a year ago, it is a decrease from the 2.3 months off that the municipality saw in January.
In Brooklyn, the amount of free rent fell 5.3 percent to 1.8 months in May. In Northwest Queens, that number fell 7.7 percent to 2.4 months.