NEW YORK, April 2, 2019 /PRNewswire/ -- Stribling & Associates, a leading New York residential brokerage, today releases their inaugural rental report: The Winter Rental Report, covering rental activity in Manhattan and Brooklyn during Q4 2018 and Q1 2019, compared to the same period a year prior.
"The Manhattan rental market saw slightly less transactions than the same period a year prior," said Garrett Derderian, Chief Data Officer at Stribling & Associates. "However, it is when this decline took place that is most interesting. Each month in Q4 saw an increase in yearly rental activity. It was only in each month of Q1 that transactions declined."
The shift in rental activity can be attributed to the uncertainty surrounding economic policy and interest rates, and the new approach the Federal Reserve took in early 2019. Late last year, mortgage rates were rising, and peaked in November. At that time, the Fed anticipated several more rate hikes in 2019. This could have led to more people, especially at the high end, renting as they waited for the market to balance. The Fed has since revised their outlook, which has resulted in decreasing mortgage rates, currently at a 14-month low. With more favorable rates, potential buyers who would have otherwise rented may have opted to purchase.
The report highlighted the greatest rental price increases were for larger doorman apartments, containing 4 bedrooms or more. On the Upper West Side, a 4+ bedroom doorman apartment saw its median price increase 22% to $13,361/month. Its average price jumped 31% to $15,869. The Downtown market reported a similar trend, with a 4+ bedroom doorman rental recording a median price of $17,498/month, a 43% increase. Likewise, its average price was up 28% to $17,554.
Still, not all markets reported yearly rental rate increases. In Lower Manhattan, the Financial District/Battery Park City market saw declines across most doorman rentals, which make up the overwhelming majority of rental stock. Here, the median rent for a doorman 1 bedroom dropped 4% to $3,662/month, while its average price dipped 2% to $3,854. Two-bedroom doorman homes reported a similar decline, with the median price down 5% to $5,067 and the average down 4% to $5,484.
Non-doorman rentals saw the most consistent appreciation across bedroom types in the Downtown market. Approximately two-thirds of all units rented there do not have a doorman. Studios reported a median price rise of 8% to $2,395 and an average increase of 3% to $2,585. One-bedroom rentals saw their median rise 6% to $2,850 and average rise 3% to $3,087. Rentals with 4 bedrooms or more had a median price increase of 4% to $7,495 and an average increase of 30% to $12,124.
Still, the overall market remained relatively unchanged from the year prior. The market-wide median price stood at $3,195, up 1% year-over-year, while the average dropped 1% to $3,901. The average time a property spent on the market was down 16%, spread evenly between non-doorman and doorman rentals, to 36 days.
In summing up the Manhattan winter rental season, Derderian revealed, "Perhaps the most interesting note is that rental rates in Manhattan do not fluctuate seasonally as much as they are perceived to shift. While rental activity in the summer months is certainly heightened, prices generally remain the same. They seem to be baked-in at these levels."
The report shows a 38% increase in rental transactions this past winter from the year prior. In total, there were 19,386 units rented. Of those, 13,710 were non-doorman rentals, while 5,676 had a doorman. Prices were also up, with the median rental rate borough-wide at $2,549, a 4% increase from last year. The average price was also up 2% to $2,711. The time these properties spent on the market dropped significantly, down 26% to 21 days.
"If you look at the rental rates for Brooklyn, they tend to be slightly more seasonal than Manhattan," Derderian stated. "The heightened activity in the summer months drives rents higher, while the winter months, which tend to be slower, put downward pressure on prices."
This particular winter season saw more fluctuations than years past, largely due to the North Brooklyn market and L-train shutdown. In Q4 the L-train shutdown was still pending, and landlords in North Brooklyn were cutting prices or offering incentives normally not seen in that market. The sharp decreases in pricing, especially for doorman properties, caused the median and average prices of all bedroom types to decline from the year prior.
The report showed that while all doorman bedroom types in North Brooklyn saw rental rate decreases, 3-bedroom units saw the greatest cuts: their median rate dropped 10% to $2,975 and their average rate dropped 17% to $3,258. 1-bedrooms noted a similar pattern, with the median price down 9% to $2,800 and the average price down 6% to $2,850. Smaller non-doorman rentals did not fare as badly, but larger non-doorman rentals saw deep cuts. A 4+ bedroom non-doorman rental had a median rental price of $3,560, down 11%, and an average price of $3,777, down 9%.
In nearby Northwest Brooklyn, the market was stronger. Here, non-doorman 4+ bedroom rentals saw their median price increase 12% to $5,600 and their average price increase 7% to $7,006. For doorman rentals in this market, 1-bedroom homes recorded the greatest increases. Their median price was up 4% to $3,145 and their average was up 4% to $3,182.
As to a look ahead for Brooklyn, Derderian pointed to specific neighborhoods that will likely show substantial price increases. "If you look at the Downtown market in Northwest Brooklyn, there has been a considerable amount of luxury construction, much of which will enter the rental market. In 2014, the premium for a Downtown rental compared to the borough-wide average price was just 4%. Today, that premium is 27%. Based on construction patterns, that figure is likely to increase. In Williamsburg too, now that the L-train shutdown was averted, those prices will rebound. These two neighborhoods will have a ripple effect on surrounding areas, causing prices to climb borough-wide."
Highlights from Stribling & Associates Winter Rental Report:
- Total properties rented: 17,277, down 3% year-over-year
- Median price: $3,195, up 1% year-over-year
- Average price: $3,901, down 1% year-over-year
- Average size: 920 square feet
- Average days on market: 36, down 16% year-over-year
- Total properties rented: 19,386, up 38% year-over-year
- Median price: $2,549, up 4% year-over-year
- Average price: $2,711, up 2% year-over-year
- Average size: 912 square feet
- Average days on market: 21, down 36% year-over-year
About Stribling & Associates
Stribling & Associates, Ltd. is a premier residential real estate firm with over 300 agents throughout five locations across Manhattan, Brooklyn, and Long Island City. As one of the most renowned brokerages in New York, Stribling uses its respected expertise in the current market to provide individualized services to both buyer and sellers. Stribling agents specialize in the sale of luxury townhouses and cooperative and condominium apartments. The company's philosophy is based on professional, personalized services coupled with exceptional knowledge of key residential market trends. Stribling Private Brokerage specializes in the discreet marketing of properties over $5 million and commands a prominent market share in that sector of Manhattan residential real estate. Through strategic partnerships with Miami's Cervera and international estate services firm Savills, Stribling's global reach extends to more than 700 offices worldwide.
Ashley Murphy, Director of Public Relations
SOURCE Stribling & Associates