BY LYNN EDMONDS
The average rental price in Northwest Queens is over 10 percent lower than it was a year ago, a June 2015 report by Douglas Elliman Real Estate said.
But Queens renters shouldn’t get too excited.
The data is not indicative of a true downward trend in rental prices in the neighborhoods of Astoria, Long Island City, Woodside and Sunnyside, Jonathan Miller, the real estate expert whose company prepared the report for Eliman, said.
The president of Miller Samuel Inc. said that while the rental market in northwest queens has been “volatile” over the past year, at times dropping or jumping in response to changes in inventory, there decrease seen in June is by no means part of a long term trend.
Every month the flood of new units that enter the market can sway rental prices; higher if they are luxury or large apartments, or lower if they are studios and one bedrooms.
In some months, 50 percent of the rental stock has been new units, making it a real challenge to compare the true cost of rent from month to month.
Miller said that in the month of June about one quarter of the properties were new, and they happened to be smaller ones. That pulled down the median rental price as compared to last year.
Though rents in Northwest Queens are not falling, it remains true that the Queens rents have stayed relatively stable, while Manhattan and Brooklyn continue to break records almost every month.
That makes Queens an attractive borough for renters and buyers.
“Queens is the new Brooklyn” Miller said. “That’s really a reference to housing prices.”
“People initially were going to Brooklyn because it was more affordable than Manhattan, then it became a sort of destination. And now those people that went directly to Brooklyn are now going to Queens.”
But Northwest Queens’ relative affordability is not likely to last for long.
All the new units that flood the housing market each month and indicative of one thing – “explosive” development, Miller said.
Once there’s no more land left to develop, rents have nowhere to go but up.
Additionally, as developers snag properties, land prices have shot up, causing developers to start preferring to build condominiums over rentals. When land prices are high “the math doesn’t work” for developers to build rentals, Miller said. Instead, they turn to condos where they can pass on the high price of land to the consumer, and make back their investment.
“When the rate of development for rental begins to cool and transition to condo, you have less rental product out there,” Miller said. That combined with a strong economy and tight credit would mean higher rents for northwest Queens.
So despite some deceptively good news in June, Miller concluded that any drop in rents was just a “temporary transition period.”
“I don’t see what’s in the future that’s going to make rental prices, as a general trend, be reduced,” he said.