Rental prices for apartments in Manhattan, Brooklyn and Queens hit an all-time high in the first quarter as New Yorkers, worried about prices and higher taxes, hesitated to buy.
Rents in Manhattan rose at the fastest pace since 2016, according to StreetEasy, an online real estate aggregator. At the same time, sales prices for Manhattan apartments fell at the fastest pace since 2010, it found.
“This spring, landlords will have the upper hand,” said Grant Long, the site’s senior economist. “We’re coming out of an unusually competitive winter rental season in which many renters found themselves in a weaker negotiating position than in years past.”
New York residents have been hit by changes to the tax code made by US President Donald Trump, which set a $10,000 limit on the amount of state and local taxes that households could deduct from their federal taxes. They also capped the amount of mortgage debt for which residents could deduct interest, lowering the financial incentive for wealthy New Yorkers to buy homes.
Manhattan condominium and co-op sales have also stalled amid a glut of luxury new-build apartments that have come on the market and are slow to sell, and the growing sentiment that prices have further to fall.
Instead, many have turned to renting, turning around a years-long period when rental prices in New York had stabilised and landlords offered price cuts and free months of rent in order to entice prospective tenants.
According to Douglas Elliman, one of the real estate brokers in New York, the median rental price for apartments in Manhattan was up 3.3 per cent in the first quarter, to $3,400. The number of new leases was up 21.4 per cent, while inventory was down 10.3 per cent and both the vacancy rate and the amount of time apartments sat on the market also declined slightly.
In Brooklyn, the median rental price was up 5.5 per cent to $2,900, and in Queens, it rose 4.8 per cent to $2,800, according to the broker.
It was a different story for sales. In Manhattan, a quarter of all sellers cut their price in the first quarter, according to StreetEasy.
Sale prices fared better in the outer boroughs. They were up slightly in Brooklyn, by 0.4 per cent, and by 3 per cent in Queens. Still, the number of properties listed for sale in Queens was up by 26.1 per cent and price cuts spiked from 5 to 17 per cent, indicating that the rosy sales figures from the first quarter may not continue.