Manhattan and Brooklyn renters caught a bit of a break in May as the rental market became slightly less competitive compared to this time last year.

Rental units spent more time on the market in May 2016 compared to May 2015, despite summer being the start of the busy rental season. Median time on market increased from 21 days to 24 days in Manhattan and from 19 days to 22 days in Brooklyn in May. Tribeca peaked with the highest time on market since 2010, jumping up from 31 days last May to 64 days this May, followed by Greenwood (45 days), which more the doubled since last year. The fastest moving rentals were in East Village (18 days), Carnegie Hill (19 days) and Chinatown (19 days). Rental units in Gowanus only stayed on market for a median of 9 days.

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Rent Discounts and Concessions on the Rise

Additionally, a greater share of apartments offered rent discounts and concessions this month, a key indicator that the rental market is softening. This May, 1 out of 3 rental units (34.1 percent) were discounted in Brooklyn, up from 1 out of 4 (26.3 percent) in May 2015. This was nearly the same in Manhattan, where rental units with a discount increased from 28.6 percent over the last year to 32.4 percent in May.

In another sign that competition is easing for renters this summer, rent prices are growing at a much slower pace than they were last year, mirroring the slowdown that’s been tracked in the sales market over the past several months. In Manhattan, the median rent increased 2.3 percent since last year from $3,206 to $3,280, according to the StreetEasy Rent Index. This is a substantial drop (more than half) compared to the 6.1 percent rent increase observed from 2014 to 2015. Rents increased the most in Upper Manhattan submarket, with a 2.9 percent annual jump to $2,380. On the other end of the spectrum, median rents in the Upper East Side submarket remained flat for the second consecutive month.

In Brooklyn, median rent increased 1.2 percent since last May to $2,873, compared to a 4.4 percent increase from May 2014 to May 2015. Slowing rent price growth in the borough is chiefly driven by declining rents in the South Brooklyn submarket, where median rent fell 8.3 percent from $1,786 to $1,638 compared over the past year. Already the least expensive submarket in Brooklyn, this steep drop in price seems to be making South Brooklyn more appealing to renters seeking value.

The Northwest Brooklyn and Prospect Park submarkets showed strong growth, with prices rising 4.6 percent and 2.7 percent year-over-year, respectively. Increased rental prices in the Prospect Park submarket seem to be fueled by a significant drop in rental inventory since last year (-16.4 percent), driving competition in the area.

Sales Prices Grow in Brooklyn and Manhattan Continues to Slow

As for the sales market, Manhattan and Brooklyn home prices continued to rise in May, even as growth was slower than last year. The median resale price in Manhattan grew by 2.8 percent from last year to $987,271, according to the StreetEasy Price Indices, continuing a long trend of decelerating annual growth in the borough. Price growth was the highest in the Upper Manhattan submarket, where the median resale price grew by 10.6 percent. All other submarkets grew at a rate of less than five percent. In Brooklyn, the median resale price grew by 7.8 percent to $562,256. The borough was led by remarkable growth in the East Brooklyn submarket, where the median resale price grew by 19.3 percent. South Brooklyn also saw double-digit annual growth in May (11.4 percent) while growth in all other submarkets was below 10 percent.

12-Month Outlook

The steady deceleration of price growth will continue through the next year. The median resale price is expected to rise 1.2 percent in Manhattan over the next 12 months (down from 2.8 percent growth over the last 12 months), and rise 5.9 percent in Brooklyn (down from 7.8 percent over the last 12 months), according to the StreetEasy Price Forecast. Price growth in East Brooklyn will continue to eclipse all other submarkets: the 12-month growth forecast is 10.9 percent in East Brooklyn, followed by North Brooklyn (9.7 percent) and Upper Manhattan (7.6 percent). Prices are expected to decline in Downtown Manhattan over the next year.