Competition for Rentals Heats Up in Manhattan, Brooklyn, Queens

(Illustration by Kevin Rebong for The Real Deal)

Lease signings for New York City apartments hit record highs in June, leaving far fewer available than is customary at this time of year.

With vaccinations underway, leasing activity has continued to rise and inventory can’t keep up, according to the latest report by Douglas Elliman, compiled by appraiser Miller Samuel.

For the third month in a row, Manhattan broke records with 9,642 new leases signed in June — the most since Miller Samuel began tracking in 2008.

Brooklyn’ 2,141 represented its second highest on record. In northwest Queens — Long Island City, Astoria, Sunnyside and Woodside — 475 new leases were signed, the most ever in June and the third-highest of any month since 2011.

Such leasing volume is affecting other metrics, such as inventory and concessions, said Jonathan Miller, who authored the report.

“We would expect inventory to rise from January to June as anticipation of greater leasing activity rises during the spring, completing transactions by the summer,” Miller said. Instead, inventory fell across the board.

The number of homes available for rent in Manhattan is down 54 percent since January and 38 percent just since May. In Brooklyn, it has dropped by 42 percent since January and 12 percent since May. In Northwest Queens, it is half of what it was in January and 14 percent lower than in May.

With fewer homes available for rent, competition among prospective tenants is heating up and landlords are withdrawing concessions: Concessions worth about 1.9 months of free rent were offered in June in Manhattan, the lowest it’s been since August.

In Brooklyn, 1.6 months of free rent was offered in June, down from January’s record high of 2.1 months. In Northwest Queens that number was 2.5 months, down from January’s record of 3.4 months.

“The window of opportunity has just about closed on significant discounts of rent,” Miller said. As a result, renters continue to sign longer leases to lock in deals.

In January, the market share of 1-year leases in Manhattan was 77.6 percent, while the market share of 2-year leases was 16.3 percent. Fast forward to June, and those numbers had flipped: 33.8 percent for 1-year leases and 61.8 percent for 2-year deals.