NYC real estate firm Douglas Elliman published a report this morning, showing that the development boom in New York City has had a significant impact on the real estate market. According to the report, the available housing stock has increased dramatically over the last year: the listing inventory for rentals in Brooklyn went up by 29.6 and just slightly more in Manhattan that saw a 30.3 percent increase in the last year.
The apparent reason for this, at least according to the report’s author Jonathan Miller, is that New York is starting to see the fruit of the five-year development boom that we’ve been living under—you know, the reason that scaffolding covers every sidewalk and everything gets turned into condos all the time.
What’s the upshot of this dramatic increase in housing stock? Well, according to the report, the uptick has created a surplus of housing, which in turn made the median rental price for apartments in Brooklyn fall for the first time ever this year. Wait, seriously? That’s great news! In fact, it fell by a whole 0.8 percent. Wow, this is huge, if true. And sure, Manhattan rental prices continue to increase—by 0.9 percent this month—and, as Miller told Curbed, pricing is “unlikely to weaken significantly from here.” But hey, if real estate works the way I think it does (read: it does not), then that means we’re all getting 0.8 percent of our rent back!
At that rate, I’m going to be paying, statistically speaking, $5.60 less a month for rent. That’s almost enough to buy a hoagie! Every month!
The report also highlighted several other changes in the market: for example, the median prices for luxury rentals—which account for the bulk of new developments anyway—dropped by .4 percent in Manhattan and rose 2.1 percent in Brooklyn. The surplus of new luxury units also led to a massive increase in vacancies, especially in Manhattan, where it hit a nine-year high of 2.49 percent.
Miller also deduced that the reason the median rental price has not moved much, despite the influx of new inventory, is that landlords, instead of lowering prices, have been offering more concessions, like covering broker’s fees or providing a free month’s rent. In other words, they’ve been doing everything but lowering prices to attract people to occupy the ever-growing number of vacancies.